Deadline day to submit packaging data under the Extended Producer Responsibility scheme

What is Extended Producer Responsibility?

The Extended Producer Responsibility ("the EPR") was introduced in the UK as part of the government's 25-year plan to improve the environment which includes a focus on minimising waste.

The EPR will effectively create a tax on businesses that put packaging on to the UK market and therefore contribute to the creation of packaging waste. This tax will be used to ease the cost burden of recycling which currently rests with local councils.

What is happening?

The Extended Producer Responsibility scheme is being implemented in two phases:

1. Data Collection Reporting - This phase was implemented last year by the Packaging Waste (Data Reporting) (England) Regulations 2023 (the "2023 Regulations") and requires the collection of data from certain, in scope organisations. This is to ensure packaging producers submit all the information required to calculate the fees that will be payable under the next phase of the regulations.

2. Fees - This phase will require payment of fees. The draft regulations to implement have not yet been brought before parliament and are unlikely to be implemented until early 2025. There appears to be cross-party support for the EPR, so these plans are unlikely to change as a result of the upcoming general election.

From 1 June 2024, the Environment Agency (the "EA") may commence enforcement action against companies who fail to comply with their packaging data reporting requirements under phase 1. So, what are the requirements?

Who needs to collect and report packaging data?

You will need to collect and report packaging data if:

• You’re an individual business, subsidiary or group (but not a charity).
• You have an annual turnover of £1 million or more (based on your most recent annual accounts).
• You were responsible for more than 25 tonnes of packaging in 2022.
• You carry out any of the packaging activities.

What is packaging activity?

Packaging activity includes:

• Supplying packaged goods to the UK market under your own brand.
• Placing goods into packaging.
• Importing products in packaging.
• Owning an online marketplace.
• Hiring or loaning out reusable packaging.
• Supplying empty packaging.

Obligations

Schedule 1 of the 2023 Regulations sets out in extensive detail what must be reported. However, broadly speaking, businesses will need to specify: how they supply the packaging; the type of packaging; the packaging class and the packaging material and weight.

Data must be reported by the deadlines set out in the 2023 Regulations. The deadline for data collected between July and December 2023 was the 1 April 2024.

What are the consequences of non-compliance?

Whilst reporting deadlines are set out in the 2023 Regulations, the government confirmed no enforcement action will be taken in relation to late submission if data is submitted by 31 May 2024. Today is therefore the final day for late submissions without the risk of enforcement action. From tomorrow (1 June 2024) businesses need to be mindful that a failure to submit data could lead to enforcement action. However, it is worth noting in general the 2023 Regulations are quite light on provisions in relation to enforcement action.

Prosecution

The EA will follow its enforcement policy when commencing prosecutions for offences created by the 2023 Regulations. The 2023 Regulations creates offences in relation to a failure to collect data and a failure to report data. It is difficult to identify precisely what the levels of fine might be given for these newly created offences but the approach to environmental offences generally is to assess the levels of "culpability" and "harm".  It seems quite difficult to identify different levels of 'harm' here.  This would suggest that the level of fine would be likely to be determined by 'culpability.' Any endeavours to provide the information even after the deadline would likely be relevant to the question of culpability if a case actually reached a criminal court.

Information Notice

We believe there are grounds for optimism that any non-compliance would not lead immediately to prosecution. The EA's enforcement policy envisages certain options short of a full-blown criminal prosecution.  For example, the EA can serve an Information Notice requiring a producer to supply to the EA the data specified in the Notice.  This isn't quite the same as a typical compliance notice, but it seems unlikely the EA would prosecute without serving such a Notice first.

Enforcement under future regulations

The draft Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024 (the "2024 Regulations") will be brought before parliament later this year and will likely come into force in early 2025. Under the 2024 Regulations, it is envisaged the EA will have a range of sanctions available here too. For a breach of reporting requirements, this would include compliance notices, enforcement undertakings and variable monetary penalties as well as criminal prosecution. This indicates their general approach to compliance with these Regulations is not to go straight to a criminal prosecution.

What about Variable Monetary Penalties?

It is worth noting there are no provisions for civil penalties to be administered in the 2023 Regulations.  However, "Variable Monetary Penalties" are part of the draft enforcement framework for the 2024 Regulations but, as presently drafted, may not exceed the maximum amount of the fine in the criminal courts.

Our comments

Regulatory team Legal Director Tim Williamson commented: "Despite it being unlikely in all the circumstances that the Environment Agency would go for the nuclear option of a prosecution straight away, we would urge all businesses to review relevant procedures and ensure they have submitted all required data.

Our regulatory team works closely with businesses in many sectors to help them anticipate regulatory change and implement policies to ensure regulatory risk is kept to a minimum."

Our team of specialist regulatory lawyers will be pleased to assist with any further queries relating to Extended Producer Responsibility and this evolving regulatory framework.