A new environmental tax aimed at tackling packaging waste is set to take effect in the UK, and industry experts warn that it could lead to higher prices for consumers. The Extended Producer Responsibility (EPR) scheme, scheduled for implementation in 2025, will shift the financial burden of packaging waste disposal from local councils to businesses. This move, while intended to encourage sustainability, could result in increased product costs—potentially adding 18p to the price of everyday items.
What Is the EPR Tax?
The EPR tax is a government initiative designed to make producers financially responsible for the packaging they use. This includes the costs of collection, recycling, and disposal of packaging waste. Under this scheme, businesses will be charged fees based on the type and amount of packaging they place in the market.
According to the UK Government’s official website (gov.uk), the estimated base fees per tonne for different packaging materials are as follows:
- Aluminium – £435
- Fibre-based composite – £455
- Glass – £240
- Paper or board – £215
- Plastic – £485
- Steel – £305
- Wood – £320
- Other materials – £280
These fees are significantly higher than previous costs, which were partly subsidized by local authorities. Now, companies will have to pay the full amount, and many are expected to pass these costs on to consumers.
Why It Could Increase Shopping Costs
While the EPR scheme is intended to promote sustainability, it could lead to noticeable price increases. Businesses in the food and beverage industry, which rely heavily on packaging, are expected to be the most affected.
Pev Manners, managing director of Belvoir Farm, expressed concerns about the financial impact of the tax. He stated that high preliminary costs, particularly for glass, could significantly affect profit margins and lead to price increases of up to 10% for some products (The Guardian).
For consumers, this could mean a rise of approximately 18p per item in their shopping basket. The increase will vary depending on the type of packaging used, with products in glass bottles, plastic containers, and aluminium cans likely to be the most affected.
Government’s Justification and Industry Response
The UK’s Department for Environment, Food & Rural Affairs (Defra) argues that the EPR tax is a necessary step towards reducing packaging waste and encouraging businesses to adopt more sustainable materials. According to Defra, this move aligns with the UK’s broader goal of achieving a circular economy and meeting environmental targets.
However, many businesses believe the implementation has been rushed and could place an undue financial strain on manufacturers and retailers. The British Retail Consortium (BRC) has called for a review of the policy to ensure that it does not lead to excessive price hikes for consumers.
Who Will Be Affected the Most?
- Retailers – Supermarkets and online retailers may need to adjust pricing strategies or switch to alternative packaging to mitigate costs.
- Food & Beverage Industry – Companies using glass bottles and plastic containers will likely face the highest fees.
- Consumers – Everyday household items, including bottled drinks, packaged foods, and personal care products, may become more expensive.
Potential Benefits of the EPR Tax
Despite concerns, the EPR scheme aims to drive long-term benefits:
- Encourages Sustainable Packaging – Companies may opt for eco-friendly materials to reduce costs.
- Reduces Landfill Waste – By making businesses responsible for packaging disposal, waste management could improve.
- Improves Recycling Rates – More funding for waste collection and recycling could lead to higher efficiency in processing recyclable materials.
What’s Next?
The EPR tax is set to roll out in 2025, and discussions are ongoing between the government and industry stakeholders to refine the policy. Companies affected by the new fees are urged to prepare by assessing their packaging strategies and exploring alternative materials.
For more details on the EPR scheme and its impact, visit the official government page on Extended Producer Responsibility (gov.uk).
Final Thoughts
The EPR tax is a significant shift in how packaging waste is managed in the UK. While it has clear environmental benefits, it also raises concerns about cost implications for businesses and consumers alike. With prices expected to rise, shoppers should be prepared for potential increases in their grocery bills.
As the policy takes effect, it remains to be seen whether the benefits will outweigh the economic burden, or if adjustments will be made to ease the transition for both businesses and consumers.
This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.
A senior at Yale-NUS College with interests in developmental and labour economics, as well as creative non-fiction and poetry. Currently, I’m studying as an Economics major and an Arts and Humanities minor (focusing on Creative Writing) with heavy involvement in the Singaporean journalism scene and involved in research on economic history and educational policy. I’m working as an author for SKC News, Yale-NUS’ student publication, as a writer for Wingspan, Yale-NUS’ alumni magazine, and as a tutor for the NUS Libraries Writer’s Centre. | Linkedin