When the UK signed the Paris Agreement in 2015, it agreed to reduce its emissions by 68% by 2030 as part of its Nationally Determined Contribution, with a commitment to become net zero by 2050. While progress is certainly being made towards these targets (demonstrated by the achievement of all three of the carbon budgets to date), the rate at which progress is being made is insufficient. According to the Climate Change Committee, most of the reductions or carbon budgets have come from the energy supply sectors. This would need to expand into other sectors to continue this path of reduction. The UK has put in place other regulations to aid to fulfil their commitments, some of which will be discussed throughout this whitepaper. These regulations aim to engage with business and industry to achieve the UK’s targets. For a business to help with this, it would need to understand where and how it can make the greatest positive impacts on the environment and society. Not every regulation will be applicable to every business due to size and turnover, but understanding your own operations and supply chain is the greatest way to see where your focuses should lie.
Below we discuss the various laws and regulations that you may have to comply with.
Plastic Packaging Tax (PPT) refers to the tax placed on packaging products and materials that contain less than 30% recycled content. This legislation was introduced in 2022 and is based on the Packaging Waste Regulations of 1997. The tax includes plastic packaging that has been manufactured in, or imported into, the UK. The aim of PPT is to create incentives for businesses to choose recycled content at the manufacturing stage, which in turn creates higher demand for these materials. If the demand for plastics containing recycled content increases, then so may recycling rates, as well as being able to redirect plastic waste from other (potentially more harmful) waste streams.
If you have manufactured or imported more than 10 tonnes of plastic packaging within the past 12 months, then you most likely need to register for the tax.
In 2023-2024, the PPT receipts collected by HM Revenue and Customs equated to £268 million. This is a decrease of 6% on the previous year. While a decrease doesn’t sound great, this shows that the tax is doing what it is supposed to and encouraging people to use materials that contain more than 30% recycled content to avoid having to pay the tax. The government also announced that 46% of plastic packaging (in weight) manufactured or imported into the UK contained 30% or more recycled plastic.
If you import or supply packaging into the UK, then you are most likely to fall under the Extended Producer Responsibility (EPR) obligations. It is an incentive for suppliers to use more recycled and simple materials when producing their packaging as well as ensuring that the recycling system is well funded. The financial responsibility for the end-of-life of a material or product falls back onto the producer of the packaging, not on the end-consumer. This means that by using recycled materials, or single material products, the EPR fees will potentially be lower than if the packaging were made of 100% virgin material or more complex mixes. This supports the move to a more circular economy and ensures that materials are being recycled and reused rather than going to landfill or incinerated.
For a business to be compliant with the UK EPR regulations, it must report on its packaging activities based on four main categories (activity, type, class, and material). The information supplied will determine who is responsible for that packaging, and how costly the EPR fees will be. Fees are yet to be determined but there are estimated fees available here. For now, producers just report on their packaging activities and data but will not incur any fees until at least 2025.
The packaging activity focuses on what your role is within the supply chain. This includes whether you supply packaging under your own brand, if the packaging is packed or filled, if it has been imported, if it is supplied empty or full, if you hire or loan the packaging, and if it is supplied through an online marketplace. Depending on the brand or trademark that is placed on the packaging (if there is one), your business or the brand owner might be responsible for the EPR fees. More guidance can be found on the government website.
This category breaks down what type of packaging you supply, and whether it will be going into household or non-household bins. Within this category, there are also options regarding whether the packaging will often end up in public bins, if it is a drinks container, if it is reusable, or if it becomes self-managed waste. You may also be asked to supply additional evidence to prove that the materials are non-household waste, which could include supplier contracts or written customer confirmation.
Primary packaging is the packaging used to contain the product or object. Secondary packaging refers to when the products are packaged in groups for selling or transport purposes. Shipment packaging is any packaging added to primary packaging for goods to be sold online or by mail and delivered directly to the purchaser or a collection point. Tertiary or transit packaging is used to group the secondary packaging units together to protect them while being transported through the supply chain.
The data is separated into a few main material categories: aluminium, fibre-based composite, glass, plastic, paper or cardboard, steel, wood, and other. Each packaging material type must be reported separately. If there are multiple materials within one packaging product, then this must either be reported as composite or multi-lateral packaging (when the materials cannot be separated by hand), or fibre-based composite (when the main material is paper or card and the material is laminated with plastic).
Recycling labels will be mandatory for all EPR-defined primary and shipment packaging from March 2026, excluding plastic films and flexibles. To be EPR compliant with recycling labels, a product must have either a ‘Recycle’ or ‘Do Not Recycle’ label. These labels can either be the DEFRA-designed labels, or the more commonly known On-Pack Recycling Labels (OPRL). While OPRL is not mandatory now, using this platform is a great way to raise awareness in consumers about which materials they can or cannot recycle at home.
To use the specific OPRL labels, a business must become a member of OPRL. The platform has a label-making tool which makes it simple and hassle-free to produce your own labels for a specific product or packaging. These labels help an end-consumer identify how the packaging should be properly disposed of, and whether it should be recycled or placed in general waste. By having the binary system of either ‘Recycle’ or ‘Do Not Recycle’, it reduces the guesswork needed by the end-consumer as to whether the product can go in their household recycling bin or not. While OPRL do offer a ‘Recycle With Bags At Large Supermarket’, this will not be an option for EPR disclosures.
Read more about how OPRL works and the benefits of becoming a member.
Streamlined Energy and Carbon Reporting (SECR) was introduced in the UK in 2019. It is a requirement for all large businesses to annually report on their carbon emissions and energy usage throughout the year. For SECR, a large company is any business that has two of the following: 250 employees, an annual turnover of more than £360 million, and/or an annual balance sheet of over £18 million. There is also an exemption for companies that use less than 40MWh or less, but they will have to provide evidence of this.
The SECR is a great initiative to enforce transparent carbon reporting. By having to measure and disclose this data, it means that companies can then begin working towards reduction targets. Data is gathered based on principles of accuracy, completeness, quantitative/measurable KPIs, consistency, comparability, and transparency. Energy use, carbon emissions, and energy efficiency actions must all be publicly disclosed in annual report.
The Task Force on Climate Related Financial Disclosures (TCFD) is a voluntary framework developed by the Financial Stability Board. TCFD has now been adopted into government reporting for the public sector due to it being one of the most effective frameworks to analyse, understand, and disclose climate-related financial information. After the UK government formally endorsed the framework, it has now mandated TCFD-aligned disclosures for large entities in the private sector as well. While not every company has to disclose climate-related information under this endorsement, the TCFD framework can be used by any business or entity. It can be a great way to report your commitments and progress in relation to climate topics.
Not every financial disclosure will be relevant to the reporting business, and a double materiality assessment (DMA) can determine which climate-related topics are material and should therefore be reported on. A reporting entity will then provide the key metrics needed to measure and manage climate-related risks and opportunities that are material to them, as well as metrics that are consistent across their industry. The material topics then follow a ‘comply or explain’ principle, which means the entity must either comply with the requirement or explain why they are non-compliant. This results in more transparent reporting due to the entity needing to explain why they do not comply, rather than only explain when they do.
While the government has adopted the entire TCFD framework, there are also additional risks and opportunities that have been identified that are specific to the public sector. These include things like policy leadership risk, value for money risk, and accountability risk. These must be reported on and necessary metrics disclosed to comply with the framework.
Any company with 250 employees or more on either the 31st March for public authorities, or 5th April for everyone else, will have to comply with the UK Gender Pay Gap Disclosures. The reporting is done through the gender pay gap service as well as publicly on the company website or annual reporting methods. Pay gap disclosures are a great way to track progress year-on-year regarding hourly rates, salaries, and bonuses and ensure you are being transparent about your improvements.
There are numerous regulations and laws that require a business to report certain metrics and measures. While the UK has adopted many of these in its own right, there are always heavy influences from the EU and other countries that may result in new laws coming into effect within the UK. Awareness of regulations outside of the UK will be helpful to ensure compliance and visibility of laws within the UK.
It is also important to know where your priorities lie, as well as the number of employees you have or the turnover of the business over a given period of time. This will give an indication as to whether the business will fall into scope for some of the reporting requirements. If guidance is still unclear, there are many great resources online, and the government website can help here as well. Our packaging consultants are always on-hand with helpful advice about disclosure relating to packaging activities, so give them a call today to arrange an initial meeting.
