Research and analysis

Extended producer responsibility for packaging: illustrative base fees

Updated 30 September 2024

Introduction

This document provides updated illustrative base fees for year 1 of Extended Producer Responsibility for packaging. It relates to fees that would be charged to obligated packaging producers by the Scheme Administrator. It does not cover: 

• regulator fees and charges paid to the Environment Agency, the Scottish Environment Protection Agency, the Northern Ireland Environment Agency, and Natural Resources Wales
• costs associated with meeting packaging recycling targets, for example through the purchase of Packaging Waste Recycling Notes 

This document is by the UK Government, the Department for Agriculture, Environment and Rural Affairs in Northern Ireland, the Scottish Government, and the Welsh Government. The term ‘Government’ in this document refers to all four administrations.

Second release of illustrative base fees for 2025 to 2026

Table 1. Second release of illustrative packaging Extended Producer Responsibility base fees for 2025 to 2026 for all packaging materials

Material	Lower (£ per tonne)	Intermediate (£ per tonne)	Higher (£ per tonne)
Aluminium	320	405	605
Fibre-based composite	355	450	565
Glass	110	175	215
Paper and card	135	190	250
Plastic	360	425	520
Steel	220	265	330
Wood	145	240	340
Other	180	205	240

Government is in the process of calculating local authority costs to manage household packaging waste. As a result, the range of fees reflects the current range of scenarios being considered for these costs. The intermediate illustrative base fees correspond to fees based on the central case scenario of local authority disposal costs. The fees are rounded to the nearest £5.

Detailed explanation 

Illustrative base fees are calculated by dividing local authority packaging waste management costs (for household packaging waste) by the total amount of household packaging placed on the market. The result is a rate which is expressed as fee per tonne of packaging placed on the market. The following calculation is carried out for each packaging category separately:  

Numerator (1) Costs incurred by local authorities managing waste of that packaging category (household packaging waste only) minus revenues from material sales plus (2) Category’s share of other costs, including Scheme Administrator administration and communication costs, and debt provision costs.

Denominator Total weight of that packaging category placed on the market (household packaging only).

To note that for the first year of Extended Producer Responsibility for packaging (2025 to 2026), costs associated with the management of public bin waste and litter will not be included in the numerator. However, the denominator will include both household packaging and packaging reported as ‘commonly binned or littered items.’  

Please refer to the first release of illustrative base fees (August 2024)^{[footnote 1]}for further details on the principles for calculating illustrative base fees.

How this release differs from the previous release

Tonnages of packaging placed on the market

In the first release of illustrative base fees, all materials used estimated tonnages of packaging placed on the market by obligated producers from the ‘PackFlow Refresh 2023 reports^{[footnote 2]}. This release uses the most recent data submitted by large organisations into the Report Packaging Data online portal system for the calendar year 2023 (extracted on 9 September 2024).

The household tonnages in-scope^{[footnote 3]} of producer fees for each material category have been calculated by adding together tonnages that producers reported as household packaging and as packaging commonly disposed of in public bins, then subtracting the tonnages that producers reported as self-managed consumer waste^{[footnote 4]}. Where producers submitted part-year figures, we have extrapolated the data proportionally up to the 12-month equivalent.

The requirements to report drinks containers for the calendar year 2023 only applied to England, Northern Ireland and Wales. These requirements will extend to Scotland for data from 2024 onwards. As a result, there is a risk that the 2023 Report Packaging Data underestimates the amount of household glass packaging placed on the market. To account for this, estimated tonnages placed on the market from ‘Packflow’s 2023 Refresh Reports (the same as those used in the first release of illustrative base fees) have been used for glass instead of Report Packaging Data.

Report Packaging Data tonnage figures could be an underestimate as they do not include data from large producers who:

• are required to report their data but have not reported
• reported their data after 9th September 2024

The regulators have a duty to monitor the accuracy of packaging Extended Producer Responsibility data submitted into the Report Packaging Data online portal; these checks are ongoing.  Regulators are also working with producers to identify and correct possible data errors. As a result, the data used in the calculations may include reporting issues that have not yet been addressed.

Local authority Costs

The first release of illustrative base fees was based on local authority disposal costs estimated by the Waste and Resources Action Programme (WRAP) local authority disposal cost model, except for glass.  Defra’s ‘Local Authority Packaging Cost and Performance’ model (referred to as ‘Defra’s model’ in this document) has been used for all materials in this second release of illustrative base fees. This model is still undergoing finalisation but is the methodology which will be used to calculate fees that will form the basis for invoicing obligated packaging producers from 2025.

Defra’s model estimates local authority costs for collection and disposal of each in-scope packaging material by disposal facility type and collection stream. It uses sampled local authority costs estimates, processed Waste Data Flow^{[footnote 5]} data using WRAP, WRAP Cymru, and Zero Waste Scotland’s composition analyses^{[footnote 6]} (with further adjustments for ‘wood’, ‘other’, ‘fibre-based composite’ and ‘paper and card’)^{[footnote 7]}, WRAP’s gate fees survey^{[footnote 8]} and recycled material resale values from updated WRAP’s materials pricing report^{[footnote 9]} to estimate costs. These costs include household waste recycling centre and recycling bring site management costs. Each material is then aggregated across all local authorities to generate a total cost estimate for each packaging material in scope.

The version of Defra’s model used to calculate fees uses estimated packaging volumes as the basis for apportioning dry recycling collection costs and estimated packaging weight to apportion dry recycling disposal costs and residual waste management costs. This approach best reflects waste management constraints and associated costs.

Changes in illustrative base fees compared with the previous release

As a result of using new data sources the new illustrative base fees differ from the first release of illustrative base fees, however they are still estimates, based on the best available evidence to date. Iterations are being released to provide updates for industry as we move towards final calculations, but they are not final fees.  Final fees for the first year of packaging Extended Producer Responsibility will be released after 1 April 2025 (the deadline for reporting packaging supplied by registered producers in 2024).

Government recognises that obligated producers may wish to use the higher or lower illustrative base fees to assess worst and best case scenarios. This is not recommended.  While illustrative base fees can provide further clarity to support industry with early preparedness, these figures are still subject to significant uncertainty and will change in Year 1 of packaging Extended Producer Responsibility and in future years^{[footnote 10]}. Government will continue to publish further iterations of illustrative base fees, once new data are available on the Report Packaging Data online portal and Defra modelling of local authority costs have been further refined.

Next steps

Producers have an obligation to report their packaging data through the Report Packaging Data online portal If you are a large organisation, for 2024, you should report in 2 batches:

• report your data for 1 January to 30 June from 9 August 2024 (deadline to report 1 October 2024)
• report your data for 1st July to 31 December from January 2025 (deadline to report 1 April 2025)

We will seek to use this data, and any refined local authority costs estimates, to update illustrative base fees in the new year.

Footnotes

1. Extended producer responsibility for packaging: illustrative base fees (August 2024). ↩

2. Valpak and WRAP (2024) PackFlow Refresh 2023 Reports. ↩

3. This involved excluding single-use PET, aluminium and steel drinks containers (150ml – 3l in size) in scope of a Deposit Return Scheme. Glass containers are included in this calculation because they are not in scope of future Deposit Return Schemes in England, Northern Ireland and Scotland. Glass containers are in scope of the future Deposit Return Scheme in Wales. ↩

4. In cases where a producer reported more self-managed waste than household and commonly binned waste for a specific material, their obligated tonnages for that material were set to zero. ↩

5. Waste Data Flow (2021 to 2022) WasteDataFlow Waste Management. ↩

6. WRAP (2017) Quantifying the Composition of Municipal Waste for England and Northern Ireland; Zero Waste Scotland (2023) Household Waste Composition Analysis Zero Waste Scotland; WRAP Cymru (2023) Compositional Analyses of Municipal Waste and Litter in Wales WRAP (wrapcymru.org.uk). ↩

7. Due to a lack of evidence around the proportion of ‘wood’ and ‘other’ materials in the waste stream that would constitute packaging material, assumptions around these proportions were adjusted to match the tonnages of these materials reported as placed on the market in the Report Packaging Data online portal.  Assumptions around the tonnages of ‘fibre-based composites’ and ‘paper and card’ packaging materials in the waste stream were adjusted to better reflect the tonnages reported as placed on the market in the Report Packaging Data online portal (whilst keeping the total tonnages in the waste stream constant). ↩

8. WRAP Gate Fees Report (2024) UK Gate Fees report 2023-24 WRAP ↩

9. WRAP (2023) Materials Pricing Report. ↩

10. The illustrative base fees contained in this document are not intended to amount to advice or information on which Producers should rely (including for business planning purposes). Government will not be liable for any financial loss should producers use these illustrative base fees in this document for planning or other purposes. ↩