Why the cost of your empty packaging is shifting from taxpayers to producers

Health · Published 18 October 2026 Swipe more like this →

In short: For decades, the financial burden of managing household waste has rested on local authorities and taxpayers. But a major UK regulatory shift is rewriting the rules, forcing large-scale manufacturers to internalize the true environmental costs of their products through a new, incentive-based system.

The original UK packaging producer responsibility scheme, introduced in 1997 to meet EU directives, was heavily criticized for its inefficiency. A 2017 House of Commons Environmental Audit Committee report found that producers covered only about 10% of packaging waste disposal costs, leaving the vast majority to be funded by taxpayers. Furthermore, the National Audit Office raised concerns in 2018 regarding fraud risks and a lack of oversight for exported waste.

Under the revised packaging extended producer responsibility (pEPR) scheme, which has been operational since April 2025, the 'polluter pays' principle is being enforced more rigorously. Large producers—defined as those with a turnover of £2 million and handling more than 50 tonnes of packaging annually—must now pay fees to PackUK. These fees are intended to fund local authorities' collection, sorting, and recycling efforts. The UK government estimates this shift will save taxpayers approximately £1.2 billion every year.

The new system uses financial levers to drive better product design. While the first year (2025 to 2026) utilizes flat base fees—such as £423 per tonne for plastic and £192 per tonne for glass—the scheme will evolve. From the 2026 to 2027 period, fees will follow a red–amber–green (RAG) rating system, where more recyclable packaging incurs lower costs. While some industry groups worry about disproportionate costs for heavier materials, the goal remains to incentivize the reduction of unnecessary packaging and the adoption of closed-loop recycling.

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