31 October 2024: The Treasury’s budget commitment to top up council’s Extended Producer Responsibility (EPR) fees should they fall short of the expected £1.1bn target is surely a tacit admission of the confusion and disarray still surrounding the scheme and a reflection of the hugely negative packaging industry reaction to the illustrative fees suggested by Defra in recent weeks.
Achieving fair and just EPR fees which reward circularity is central to the success of the EPR scheme but we are still a long way from achieving this. Concerted industry efforts, to ensure that fees reflect the role of genuinely sustainable materials, such as metal, in creating a circular economy, continue.
Get the EPR cost split between materials right and everything else will follow suit to create a virtuous circular economy where processing costs are reduced and recycling rates increase. Avoiding a taxpayer-funded bail out should be an absolute Defra priority. The MPMA has calculated that the current illustrated fees will see material switching away from the easy, economical-to-recycle materials to those that cost more to dispose of. Costs are forecast to go up while EPR fee revenue goes down creating a lose-lose for the economy and the environment, and yet another inflationary pressure.
The rise in employers’ national insurance contributions is clearly the big-ticket item in this budget and metal packaging manufacturers will inevitably be impacted. This measure has been trailed for weeks leading up to the budget so will not have come as any great surprise, but the imposition of an additional financial burden on businesses still reeling from soaring energy costs and a prolonged period of higher interest rates will be challenging.