Over the last year, packaging has been in the spotlight. Steve Gough, CEO of the UK’s largest compliance scheme, Valpak, updates readers on the latest on extended producer responsibility (EPR), plastics, and environmental compliance
2018 was a momentous year for retail packaging. For many, it will go down in history as the Year of Plastic. The issue of plastic waste has been on the radar for retailers for some time but, with the prominence of the BBC’s Blue Planet, both producers and consumers were on the same page, determined to act on an overwhelming desire to bring about positive change.
The start of the year saw a flurry of activity. The Circular Economy Package, which was published by the EU in February, set out a target for producers to pay 80 per cent of the full net cost of recycling. Although the definition of full net cost has yet to be agreed, it is clear that producer contributions will be substantially greater in the future. The package will be implemented Europe-wide, but for UK producers it arrives at the same time as a concerted push to transform the whole EPR system.
Consultation on a new structure for EPR is expected in the coming months, leading to implementation in 2023. The chosen system is likely to place a much greater burden on producers. For example, the current de minimis ruling which excludes businesses with a turnover of less than £2 million, or which place more than 50 tonnes of packaging on the market, is likely to be reduced – or removed.
In recent years, Valpak has analysed alternative schemes across Europe to come up with proposed changes to the existing system. Published in 2017, Packflow 2025 suggested a range of options including both a full cost system and one that retained many of the features of our current PRN (packaging recovery note) model. It also recommended the addition of a central communications fund to raise awareness among consumers.
Since the arrival of the Circular Economy Package, with its requirement for producers to pay 80 per cent of the full net cost of recycling, Valpak has revised Packflow 2025. The two models most likely to deliver the desired results are the monopoly system, which is widely used across Europe, and the more flexible, managed free market model, which operates in a similar way to the UK’s system for waste electrical and electronic equipment (WEEE) waste.
The key questions lie in the detail. For example, does the full net cost refer to the cost of packaging destined for recycling, or to the cost of dealing with all packaging that finds its way into the waste stream? Similarly, should the funding apply solely to waste sourced through household collections? The current system allows for commercial and household waste to be linked, and many retailers offset their packaging obligation by recycling transit packaging generated through deliveries to store. However, if commercial and household waste were decoupled, producers would pay a far higher tariff on packaging waste placed onto the market.
While many of the larger retail businesses were already introducing projects designed to use plastic more wisely or to innovate to find viable alternatives, as the year progressed, WRAP (Waste and Resources Action Programme) began plans for the UK’s voluntary Plastics Pact. At the launch of the pact in April, many of the larger players were already signed up and 67 businesses are now committed to meeting challenging targets by 2025. Goals include making 100 per cent of plastic packaging reusable, recyclable or compostable, and achieving 30 per cent average recycled content across all plastic packaging.
For producers, the priorities are clear. Economic and environmental drivers call for a reduction in the volume of packaging placed on the market, and strategies to make packaging more recyclable.
Accurate data will be key to achieving both own-brand goals and those outlined in the pact. As a data partner for Plastics Pact, Valpak is making its Data Insight Platform available. Existing Valpak data management customers already have access to the platform, which allows them to scrutinise supply chain data and compare products against metrics such as recycled content or use of coloured plastics. Pact members will also be able to access a dedicated tab which automatically flags up the items which meet targets and those which do not.
Moving into 2019, the plastics focus will remain, although the year ahead is likely to see more in terms of actions, and greater clarity on legislative demands. In addition to EPR and plastics, deposit return schemes are on the agenda. Retailers need to engage in debate, and to understand the potential ramifications around labelling and collections that will accompany the change.
The immediate period of change, over the next five years, will focus on the optimisation of packaging placed on the market to make it perform better. Retailers will be able to manage this transformation at a rate that suits their business and meets their own environmental goals. Following system change expected around 2023, increased funding will be made available to modernise infrastructure, enabling it to attain the full potential from packaging waste.
It is very important for retailers and producers to communicate with consumers to highlight the good work they are doing to improve the profile of packaging. However, we must also ensure that improvements do not come at a cost to recyclability, or to the effective preservation of food or protection of goods.