By Josh Remi
I have worked in the packaging data business for almost 14 years and the increasing significance and prioritisation that companies give to product packaging has been noticeable in that time.
Back in the late 2000s, I distinctly remember trying to express the importance of using recyclable and recycled content in packaging to many organisations, yet the attitude, frequently, was “do we have to?” or “what benefit does it bring to us?” The problem then was that there really was no incentive – legally or commercially. The current UK Packaging Extended Producer Responsibility (EPR) system, implemented more than 24 years ago, does not in any way incentivise the use of recycled or recyclable material in packaging. Importantly, until relatively recently, most consumers cared very little about supply chain transparency and provenance. Being environmentally conscious with regards to packaging was very much a ‘nice to have’, rather than necessity, for both business and consumers.
Since then, we have seen a huge change in attitude. Consumers are now more aware of the packaging that comes with the goods they are purchasing, and businesses have started taking notice.
However, even though this shift has occurred, many companies are still way behind in terms of their sustainability goals. In my experience, it is those companies that demonstrated clear reluctance to change their ways without incentive that find themselves in this position – consumer perception and opinion about sustainability has moved forward in great leaps but these companies are standing still. There is a saying that I have heard a few times which rings true now more than ever: “Everyone wants to be green, but nobody wants to pay for it.”
Moving to the present day, as part of the government’s Resource and Waste Strategy for England, there are consultations taking place for UK Packaging EPR reform and the UK Deposit Return System due to commence in 2023. These are in addition to the UK Plastic Packaging Tax which is set to be implemented in April 2022. These are three very significant pieces of UK law that will up the ante on businesses to use more recyclable and recycled content within their packaging, legally and commercially.
Nothing is set in stone yet, but certainly the impact to businesses is considerably higher financial contributions and a responsibility to report far more granular data at a higher frequency to the Environment Agency and HMRC.
For example, the UK Plastic Packaging Tax will require quarterly reporting on plastic packaging placed onto the market and the level of recycled content within each plastic packaging component. Any plastic packaging containing less than 30% recycled content will be subject to the £200 per tonne levy. The UK Packaging EPR reform will also introduce quarterly reporting and require much more granular data, especially for plastic polymers, but this will almost certainly extend to other packaging materials too. With the new UK Packaging EPR system, modulated fees for businesses will also be introduced; this means that the more recyclable the packaging, the cheaper the compliance bill will be.
The distinct issue here is that most brands, manufacturers and retailers do not hold data relating to their packaging to this exact level of detail; the current EPR system requires the most basic data set of materials by tonnes, categorised by paper, glass, aluminium, steel, plastic, wood and ‘other’. Going forward, if an obligated business is not able to identify the recycled content in their packaging, or identify the type of plastic polymer, then they will be charged significantly more.
This then introduces the legal and commercial incentive for companies to do more. In order to do so, a significant increase in packaging data collection will be required and the time to start planning and taking action is now!
These new policies will be introduced within the next three years and the sooner companies start the path of preparation the better. Data is the baseline – from there changes can be prioritised and actioned, mitigating the impact these potential increased costs and reporting requirements.
The packaging industry is at a critical but exciting point in history. Companies have an opportunity to really get hold of this crucial data and empower themselves to make extremely positive changes for their commercial operations, consumers and the environment.
What will you choose to do? Stand still and hurriedly gather information together simpy to comply with the incoming taxes and reforms, risking a real financial hit, or will you take the initiative and start early, gain control, potentially save your business money and make a difference?