The Regulations
Introduction
The UK produces around 10 million tonnes of packaging waste a year, most of which ends up in landfill sites. In 1997 the Government implemented legislation in response to an EU Directive on packaging waste. The legislation aimed to minimise the impact of packaging waste on the environment by increasing the amount of recycling undertaken within the UK. This is achieved by putting the onus on UK businesses who handle packaging to pick up the cost of recycling. The Regulations are concerned with what packaging a company introduces into the UK system and have nothing to do with the amount of waste that a company has collected from its premises. This is a factor many businesses find frustrating, as they are unable in practice to offset any recycling they perform against their obligation.
The Producer Responsibility (Packaging Waste) Regulations 1997
The Regulations aim to increase the recycling of packaging waste by making industry responsible for the cost of recycling within the UK. Not all businesses are obligated however and you must only comply with the Regulations if you exceed all three of the following threshold tests:
1. Be a UK business.
2. Have a turnover greater than £2 million per annum.
3. Handle more than 50 tonnes of packaging per year, excluding any packaging you subsequently export.
Do the Regulations apply to you?
The packaging chain
The Regulations require companies to recycle a proportion of the packaging they introduce into the UK. This packaging may take the following forms:
- Imported packaging added to goods or packaging around products received into the UK (including components and raw materials).
- UK packaging added to goods or any packaging around products purchased in the UK and passed on to the end user of that packaging.
The Regulations share the responsibility for recycling packaging waste between different participants in the packaging chain. For example, consider the packaging around a tin of beans to be sold at a supermarket, referring to the diagram below.
The process begins with the manufacture of the tin sheeting (manufacturer). The tin sheeting is then pressed and folded to form a tin (converter). The tin is then filled with beans (packer/filler) before being transported to the supermarket. The supermarket (seller) sells the beans to their customers who are the end users or consumers of the packaging.
The percentages below represent the responsibility placed on businesses performing each activity in the packaging chain.
Packaging activities
The amount of recycling a company has an obligation for is dependent upon which of these activities are performed and the UK National Targets set by the Government. In practice companies are not required to physically recycle themselves, but to purchase Packaging Recovery Notes (PRNs) as evidence that approved recycling has been performed on their behalf in the UK.
Packaging recovery notes
PRNs are the only form of tradeable evidence that recycling has taken place and can only be issued at the point where packaging waste is recycled. The revenue that the re-processors obtain from the sale of PRNs is reinvested into new plant and collection schemes to improve the recycling volumes and infrastructure within the UK.
Circle of improvement for increasing recycling in the UK
The Government uses the UK National Targets to increase the demand in the market place for PRNs resulting in the re-processors recycling and investing more year-on-year.
Complying with the Regulations
Due to the complex nature of the Regulations, liaising with the Government and negotiating with re-processors, it is understandable that over 90% of obligated businesses choose to become members of a compliance scheme, to co-ordinate the compliance process on their behalf.
There are two ways in which companies can comply with the Regulations - either the data submission method or the allocation method. Please contact Kite for advice regarding the most suitable method for your company.
Data Submission Method
The obligations companies have are annual and based upon the packaging handled in the previous calendar year, (January to December).
In order to comply with the Regulations, companies must:
- Apply the Regulations to their business.
- Obtain the necessary data regarding the packaging handled.
- Calculate their obligation.
- Complete a data submission form.
- Register with the Environment Agency.
- Acquire Packaging Recovery Notes (PRNs) to discharge their obligation.
Allocation Method
Whilst conforming to the Packaging Regulations is difficult for any business, the Government has recognised that for smaller obligated companies, this can become prohibitive. As a result the Allocation Method was developed to help smaller companies with less resource, whose turnover is between £2million and £5million.
Under this method the obligated company provides its turnover figure from the last set of audited accounts, or where there is no requirement for the company to have its accounts audited, the last set of company accounts prior to April 7th of the obligation year. From this figure the number of PRNs required is allocated at a fixed rate of 26 per £1million of turnover, (this is pro rata to the nearest £10,000).
A condition of the allocation method is that all PRNs must be material specific recycling PRNs in the packaging material the customer handles the most of by weight. For example if cardboard boxes form the majority material by weight then all PRNs must be paper.
It should be noted that it is a condition of the Regulations that the Allocation Method must be adopted for a minimum of 3 years. However, should your company’s turnover exceed £5million during this time then you will be automatically required to adopt the Data Submission Method.
The advantage of this method is that having completed an initial analysis to determine the predominant material handled, in future years the submission becomes less onerous.
For further advice on which is the most appropriate method, please contact your local branch.
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Consumer Information Obligation
For obligated producers whose primary activity is selling, they must also provide details of how the packaging they supply can be recycled.As a member of Kite's scheme, we will discharge this on your behalf. Click below for details of the Consumer Information Obligation.
Consumer Information Obligation>>