The extended producer responsibility: How can CFOs prepare for it?

The extended producer responsibility (EPR) is an environmental policy based on the ‘polluter pays’ principle and shifts the cost of waste and recycling of packaging from local authorities to the producer. Ultimately, the goal is to incentivise them to use more environmentally-friendly packaging and reduce the total amount of waste from UK businesses.  

The policy also lets local authorities recover their costs by collecting packaging fees from producers.

The fees will be based on the amount and type of packaging entering the UK market. Generally, the less environmentally friendly the packaging, the higher the rate per tonne. It's imperative that CFOs understand if their organisation is liable as soon as possible to avoid misunderstandings that lead to mistakes and unnecessary fees.

Who does the extended producer responsibility apply to? 

Are you a manufacturer, retailer, online platform, or wholesale importer/distributor of packaging or packaged goods?

If so, it’s likely that it does apply to your business. These are the specific requirements:

• You're an individual business, subsidiary or group (not a charity)
• You have an annual turnover of at least £1 million (for the business or group as a whole)
• You imported or supplied more than 25 tonnes of packaging to the UK market in 2024
• You do any of the following activities: supplying packaged goods to the UK market under your own brand, placing goods into packaging, importing products in packaging, operating an online marketplace, lending or hiring out reusable packaging, or supplying empty packaging

What does it mean for finance teams?

Firstly, it means you need to collect and report packaging data. Secondly, it means you may be liable to pay EPR packaging fees in October 2025. Now is the time to act because the data needed to meet reporting requirements and calculate your fee is likely to be significantly more detailed than what you may have previously reported under similar packaging regulations.

The most common causes of errors

EPR will surprise some organisations. Here are three of the most likely mistakes CFOs need to be aware of. 

Thinking they aren’t responsible

Understanding who is responsible is not always straightforward. For example, if a UK food company manufactures goods under their own brand – they're responsible. However, if the goods are produced and packaged under the supermarket’s brand, the supermarket is responsible. Or consider these examples: you may need to take action if you hire out reusable packaging, like a wooden pallet. You may also need to take action if you sell imported goods that are packaged on behalf of a company that isn't established in the UK. So, it's worth spending time understanding which role you play in your supply chain.

Thinking it’s only about plastic

For UK businesses with limited global presence, EPR may feel unfamiliar. Because it could feel similar to plastic packaging tax (PPT), it’s easy to assume EPR refers only to plastic. That’s not correct. EPR applies to all types of material, from aluminium, glass, and steel to wood, bamboo, and ceramic. The scope of EPR is wide – and will apply to a broad range of businesses.

Thinking too narrowly about packaging

With EPR, there are plenty of items you may not think need reporting, but which do constitute packaging, and there aren’t as many exceptions as you would think. Examples of obligated items include frames used within freight containers, pallets, barrels and kegs, gas cylinders, disposable cups, artificial haggis skins, inhaler cartridges, mascara brushes, razor blade holders, sterile medical packaging, and glass vials containing medicines. If you’re dealing with these items, EPR may apply to you.

How can CFOs help their organisations prepare for the new rules? 

With the first producer invoices being issued in October 2025, now is the time for finance teams to start preparing for them. Here are two key actions: 

• Undertake an audit of your supply chain to understand which items constitute packaging, and whether you're the responsible party for each one
• Review your data collection systems, and brief your finance team on EPR obligations, as we head towards the next reporting deadline on 1 April 2025

For more insight and guidance on the extended producer responsibility contact Daniel Rice.

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