Packaging Manufacturers: Extended Producer Responsibility

Mary Creagh Excerpts

Wednesday 1st July 2026 Commons Chamber

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)]

It is a pleasure to speak on this issue today. I thank my hon. Friend the Member for Rotherham (Sarah Champion) for securing this debate, and I thank all hon. Members who have spoken. We have heard from powerful advocates for the glass industry, the fibre-based composites industry, the ceramics industry, the wine industry in Cornwall and, of course, the beer and pub industry, which we are all hoping to go and enjoy shortly.

Let me begin by also declaring my interest as a member of the GMB trade union. I recognise the challenging context in which the glass industry operates; that is a result of a range of global pressures, including the international increases in energy costs, volatile commodity prices, growing international competition, and substantial investment in decarbonising energy-intensive manufacturing processes. I also recognise and acknowledge the industry’s concerns about packaging extended producer responsibility, or PEPR, which is an internationally recognised model used in more than 30 countries to transform recycling services. The model shifts the cost of managing packaging waste from taxpayers—that is us—to the producers who put it on the market. It is the “polluter pays” principle in action. Its introduction in this country is the biggest change to recycling policy in 25 years.

The policy was formulated under the previous Conservative Government. The right hon. Member for Newark (Robert Jenrick) is no longer in his place, but it was his Government who first began developing it back in 2018-19. There was a debate on it on the Floor of the House, in which he did not register his objections, and he did not vote against it. Perhaps he was absent, or chatting to his new friends in a different party.

Since PEPR has been brought in, the money raised from packaging producers and retailers has gone directly to councils to fund the introduction of simpler recycling—the new recycling collections that we have. That does not include the food waste collections, although they are part of simpler recycling. Last year, PEPR raised over £1.4 billion for local authorities to deliver better recycling services for people in every nation of the UK. Our goal is to get from 45% recycled—that is where we have stagnated over the last decade—to 65% recycled by 2035. That is an important goal. The food waste collections—they are not paid for through PEPR—are part of the simpler recycling reforms and a really important part of taking the methane out of our bins.

Let me come to glass fees. Last year, as my hon. Friend the Member for Rotherham rightly said, year 1 PEPR fees took account only of the weight and volume of materials. That reflected the cost to local authorities of collecting and disposing of the materials. Following her excellent Westminster Hall debate last year, we have worked at pace, and I am pleased to tell hon. Members that from this year—year 2—we are bringing in lower fees for more recyclable packaging.

Our latest data shows that more than 93% of glass will receive a “green” discount for being recyclable. This means that producers of harder-to-recycle “red” materials, such as crisp packets, will pay a premium. The system is designed to reward the right choices. The incentive to make the right choices will increase, because in years 3 and 4, producers of “red” materials—the more complex forms of packaging—will pay even higher fee rates than those do who use more recyclable, “green” materials, like glass. The forecasts that I have seen expect the glass sector to pay a decreasing share of PEPR costs in years 2 and 3. In year 4, that will fall even further, as the penalty for “red” packaging will reach double the basic “green” rate.

[Sarah Champion]

Can the Minister tell us whether that will be the 75% discount that the glass industry is asking for? Does she know what the falling rates will be, please?

[Mary Creagh]

Again, we have a complex system. I would very much like to give my hon. Friend the amounts per tonne, but that is not possible, much though I would like to give her comfort, until all packaging producers have reported their data in the autumn. We will then issue the invoices. I can say that the proportion that the glass sector will pay will fall year on year. We have been listening very carefully to the glass industry on that issue. PackUK, the scheme administrator, and officials at the Department for Environment, Food and Rural Affairs meet the glass sector and British Glass regularly, and PackUK ran a workshop just this week, which included British Glass, on how we can drive the use of more recyclable materials.

Everything that PackUK does is subject to four-nation agreement. We had a meeting this morning with the devolved Governments, at which we talked through some of the issues. Wales, Scotland and Northern Ireland face very different challenges, and the challenges of collecting in inner-city London are not comparable to those of collecting waste in the Outer Hebrides. The model is therefore complex from the recycling and collections point of view as well.

Returning to glass, PackUK and DEFRA officials will visit Ardagh Glass later this month. The visit was due to take place in June, but it was rescheduled at Ardagh’s request. PackUK also visited Encirc in Northern Ireland last month. I have spoken to the hon. Member for Runcorn and Helsby (Sarah Pochin) about the issue around the reduction in energy fees, but those do not apply in Northern Ireland. That is another—well, we could talk about Brexit, but perhaps we will not intrude on that private pain.

May I also say that since we debated glass fees last year, DEFRA officials have visited five of the six major glass manufacturers in the UK to hear from them directly, and that includes Beatson Clark? We are acting on their concerns. Also, we have investment in the glass industry in this country; we have a new electric glass factory at Verallia in Leeds.

[Sarah Champion]

Will the Minister give way?

[Mary Creagh]

I want to make a little bit of progress, if I may, because it is four minutes to kick-off.

[Sarah Champion]

We have two and a half hours, Minister.

[Mary Creagh]

I want to make some progress, and my hon. Friend may find that I answer her questions.

PackUK has today published improved guidance on how recyclability will be assessed and rewarded. The glass section was developed in close collaboration with the glass industry and we have already received positive feedback. I hear what my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) said about wool. When I see wool used as a coolant, it tends to come in plastic packaging, for hygiene reasons. That packaging can certainly be open up, and the wool can then be composted, but there is usually a film around it, and under the recyclability assessment methodology, that would incur higher fees. All this is meant to incentivise design for recyclability. I was due to meet a wool insulation provider this week. Sadly, I was not able to, but she was on her way down, and I believe that she met officials. I will check that later. I am keen to do work on this issue, because it is particularly important for the British wool industry, with wool at such rock-bottom prices.

We are planning to launch a call for evidence this year to gather industry views, which will inform how we continue to reward the right choices. On the post-implementation review, it will be conducted and published in the normal way, three years after the regulations came in. That is slated for December 2028.

[Sarah Champion]

It is reassuring that we are going to have the consultation. Would it not have been much better to have had it before the scheme was implemented? The Minister mentioned a meeting with my constituency business, Beatson Clark. That meeting only happened because I urged the previous Secretary of State and the Minister to make it happen, and I assume that the other examples of meetings that have taken place, or not, have been at the insistence of MPs. Why was that work not done before the scheme was rolled out?

[Mary Creagh]

I cannot speak for what happened under the previous Administration, but I can tell my hon. Friend that the scheme was announced in 2018, and a consultation happened in 2019. There was another consultation, but I cannot find the exact part of my pack on that. There was a full impact assessment of PEPR published in October 2020, setting out the expected overall costs to businesses. At that stage, it was not possible to assess the impact on specific sectors or regions, as fees and modulation had not been finalised. This has been a huge infrastructure project change, and a huge system change. The Environment Agency, acting as the regulator, holds the database of everyone who is a packaging producer. Elsewhere in the waste and packaging sector, we see large issues around avoidance, free riding and other issues, so we had to go through a massive piece of work with our regulator to ensure that everyone who is putting packaging on is meeting their obligations.

There were public consultations in 2019 and 202,1 and a consultation on draft regulations in 2023. There was a consultation with British Glass on the decision to use volume in the apportionment of kerbside recycling collection costs in July 2024, prior to the release of the initial set of illustrative base fees. I think that there was perhaps a misunderstanding, given that this had all been thought about and discussed for five or six years, that it was never going to happen. To be fair to the smaller companies, perhaps they were unaware of their obligations, or perhaps they were not obligated at that time, but have since grown and been brought over the de minimis threshold.

Let me talk a little bit more about what the Government are doing more widely to support glass businesses with their electricity costs.

[Gareth Snell]

I genuinely thank the Minister for being generous with her time. On the idea of a post-implementation review, is there a way of looking at the time that businesses have to spend interacting with the scheme? The Titanic brewery in Stoke-on-Trent—very good beer, by the way—has told me that it took three weeks of one employee’s time to complete the assessment for the first year’s fees. I am sure that that is not by design, but in the review, will the Department look at how to make interaction with the scheme easier for small businesses that do not have much capacity?

[Mary Creagh]

My hon. Friend makes an excellent point, and this is something that I have been insistent with officials on. This is a complex scheme, and the more complexity we add into it, the more time it will take. There is a trade-off here, and a set of difficulties, because we can do carve-outs for x and y sector, but that creates more complexity in the recycling assessment methodology calculations for other parts of the packaging industry. We have to beware of making perfection the enemy of the good. I can also let my hon. Friend know that the chief executive officer of PackUK, Jeremy Blake, met the WoolCool CEO yesterday. I thought that had happened, but I am glad to have got the note telling me it is true.

Beyond this, we are supporting the glass businesses with their electricity costs through the British industry supercharger. Glass businesses now receive 90% compensation for electricity network charges. This brings their total reduction in electricity bills to an average of between £65 and £87 per megawatt-hour. We are also supporting the retail, hospitality and leisure sectors with lower tax rates for their properties. On the issue around cheaper imports coming from overseas, the Trade Remedies Authority’s independent anti-dumping and anti-subsidy investigations into cheaper glass imports from China and Turkey are ongoing. That is dealt with by another Government Department.

We are working closely with industry to address the challenge of dual use—packaging disposed of in either business or household waste streams. We know how important this issue is to stakeholders across different sectors, including pubs, hospitality and medical packaging businesses, and construction. Indeed, I met a representative of the paint industry at a B&Q in my Coventry East constituency. Paint will always come in a tin or plastic container with a coating inside it, so it will never attract “green” fees, but we want to get that paint recycled, reused or repurposed. B&Q is doing some excellent work with the charity Neighbourly to ensure that paint has a second life. People do not know what to do with unused paint. Builders finish using a pot, then down into the drain the rest goes, adding to the diffuse water pollution that we are experiencing across our sewer network.

This is a tricky issue, but we need a system that can be effectively monitored and enforced. It is no good just saying, “Oh, everyone decides that all their stuff goes to the pubs” and then suddenly we are left with a massive shortfall in the fees, so it has to be verifiable. We are testing solutions, including for hospitality, and building on international best practice, looking in particular at the Austrian model. I held a roundtable with industry last year to look at solutions for the dual-use challenge. It is difficult, but I hope for a solution on this issue soon that does not add undue complexity to the scheme or make it impossible for the regulator to verify.

[Gareth Snell]

I am sorry to detain the House. I am not sure if a try has been scored yet, but I am sure somebody will find out—

[Mary Creagh]

A try!

[Gareth Snell]

The Minister mentioned the super-charger scheme and the impact for glass manufacturers. I know the super-charger scheme is not her Department, but it is only for frontier industries. Can she say whether or not glass bottle manufacturers that go into the hospitality sector benefit from that? My understanding was that they do not because they are not considered one of the glass fibres or the industrial glass needed for the frontier industries.

[Mary Creagh]

I am looking to my officials in the Box, and I think it is probably safest if I write to my hon. Friend on that issue.

Let me tell the House about the year 1 shortfall in fees. There was a shortfall in the fees this year as we allowed packaging producers to submit their tonnages and then their tonnages reduced because, obviously, they looked at their figures and reduced them. We listened to industry on that. Despite the regulations saying that actually industry should make up any shortfall, my Department took pressure off businesses by funding on an exceptional basis to hold fees down. We are taking steps this year to ensure that we do not have a repeat of that.

On early successes, we are hearing about PEPR bringing about change. Councils all over the UK are using this funding from the packaging industry to improve services to local people. In Tameside, the metropolitan council is investing £1.6 million in new vehicles and improved technology to deliver a more reliable service for taxpayers. Councils are investing to improve glass collection directly, which should benefit the industry in terms of the supply of high-quality cullet. For example, Aberdeenshire council is investing £5 million over 2 years to purchase a new three-compartment glass collection vehicle—I hope that is “vehicles”, but it says “vehicle” here—upgrading glass recycling points to reduce contamination, and improving the quality of glass recyclate, which we know really matters to the glass industry.

[Mr Forster]

I thank the Minister for being generous with her time. I am sure she can probably understand why I, Asahi, which is based in Woking, the hon. Member for Rotherham (Sarah Champion) and others are not satisfied with her answers today. I have heard nothing of the double taxation, which is what EPR is. Will she agree to meet me, the hon. Member, other MPs and, more importantly, the businesses impacted to fully understand the impact and to work out a way forward?

[Mr Forster]

I might have been distracted in the last eight minutes—I do not know why. I remember hearing that the Minister said she has held a roundtable. I do remember that it was last year, and I am keen for her to meet the stakeholders again before this wider consultation and what happens next—hence my request.

[Mary Creagh]

Obviously, I do not sit there and do the maths with people. These suggestions and potential solutions have to be modelled and worked through. We are working at pace to assess whether any targeted short-term measures could be introduced through the forthcoming PEPR amending statutory instrument to partially address the dual-use packaging issue. So we are working on a short-term solution, but we are also working on a longer-term solution, which is the Austrian model that I mentioned. Again, the hon. Gentleman may have been distracted by the whistle when I mentioned that.

Councils across the country are rebranding and upgrading their glass recycling points to make it easier for households to use glass recycling facilities and to reduce the contamination that we know is so important to avoid in glassmaking. We have made a £5.3 million investment in that over a couple of years, and those changes are happening on the ground.

As my hon. Friend the Member for Rotherham said, reuse is not a short-term fix. It was once the norm when a lot of us—perhaps not all hon. Members present in the Chamber—were growing up, and it can be again. In some ways the future looks like the past—let us hope that is not the case for the England game. PEPR creates a powerful financial incentive for glass producers to move to reuse. Running reuse schemes means producers avoid most PEPR fee obligations, and glass, as we have heard, is a durable, tried and tested technology.

While it requires up-front investment and system change, it shifts costs away from single-use production and disposal, it improves supply chain resilience and reduces costs over time. Reuse is already operating at scale internationally, particularly for glass. Reusing a glass bottle just five times can reduce the greenhouse gas emissions by more than a third. The more times they are reused, the greater the benefits will be.

As we have heard today, the issue is not just about the environment; it is also about jobs, communities and the long-term health of British industry. The industry estimates that these reforms will create 25,000 jobs and underpin £10 billion of investment in new sorting and processing facilities. The reforms will drive that improvement in our recycling rate and, crucially, they will reduce our carbon emissions.

In conclusion, glass matters, industry matters and glassworkers matter. This Government back businesses and workers, and we back the transition to a circular economy that makes the country stronger, cleaner and more resilient. Change is coming to EPR and I reassure all hon. Members that we want to have a predictable, well set out framework within which business can confidently operate and householders can confidently know that what they put in their recycling streams is going to have a second, and hopefully third and fourth, life.

Question put and agreed to.