Contents

1. What was said — and by whom
2. EPR: shifting the bill from taxpayers to producers
3. DRS: the deposit return scheme arrives
4. The numbers: £10bn investment and 25,000 jobs
5. Consumer attitudes are shifting too
6. What this means for businesses buying packaging
7. Sources

What was said — and by whom

Simon James, Director of the Circular Economy Directorate at Defra, addressed industry stakeholders earlier this week, using language that signals the government's confidence that the packaging reform programme has reached an inflection point.

"For extended producer responsibility for packaging, this has been a generational shift — in how we manage waste and crucially how we pay for the management of waste in this country. It transfers the cost of collecting and processing household packaging waste from taxpayers to the businesses that produce and supply packaging."

Simon James, Director of Circular Economy Directorate, Defra

James acknowledged that implementation would be an ongoing process, noting that complex reforms rarely "land right first time," and that the government would continue refining the programme. This is an important signal for producers navigating compliance: the system is live, but the detail is still being worked through.

Exchange for Change's Davies added a forward-looking point about the Deposit Return Scheme, arguing it would embed lasting behavioural change across the whole population.

"The DRS will become a catalyst for lasting behavioural change across all generations within the UK — embedding recycling in everyday life."

Davies, Exchange for Change

EPR: shifting the bill from taxpayers to producers

Extended Producer Responsibility for packaging, which came into operational effect in 2026, fundamentally redraws who pays for the collection and processing of household packaging waste. Under the previous system, local authorities — and by extension, council taxpayers — bore the cost. Under EPR, that cost is transferred to the producers and suppliers of packaging.

Crucially, the fees businesses pay are not flat. The Recyclability Assessment Methodology (RAM) assigns each type of packaging a Green, Amber, or Red rating. Red-rated packaging — packaging assessed as unlikely to be successfully recycled — attracts a modulated fee premium. That premium is set to increase from 20% above the base fee in October 2026 to 100% above base fees by 2028.

According to data from PackUK, approximately 71% of packaging currently in circulation has been assessed. The financial incentive to move away from unrecyclable formats is now clearly embedded in law — and in cost.

DRS: the deposit return scheme arrives

Running in parallel to EPR is the UK's Deposit Return Scheme (DRS), currently being designed by Exchange for Change. The DRS will require producers and retailers to charge a small deposit on eligible drinks containers — bottles and cans — which consumers recover by returning empties to a collection point. The scheme is aimed at driving UK container recycling rates significantly higher, and is on track for a 2027 implementation date.

Exchange for Change recently announced its return handling fee — the amount that will be paid to retailers and third-party operators for processing returned containers. Packaging suppliers and e-commerce businesses handling drinks products need to be tracking DRS scheme design closely over the next 12 months.

The numbers: £10bn investment and 25,000 jobs

Simon James put a significant economic figure on the programme: research cited by Defra suggests that the collection and packaging reforms — taking EPR and DRS together — are expected to stimulate £10 billion of new investment in the UK's recycling infrastructure, and to create 25,000 new jobs.

These projections reflect the scale of the investment required to build out the collection, sorting, and processing capacity needed to meet the government's 65% municipal recycling target by 2035. For businesses in and around packaging supply chains, this represents a structural shift in the economics of the sector — not a temporary compliance exercise.

Consumer attitudes are shifting too

The Defra data on consumer readiness is striking. Research cited by James shows that 78% of consumers are willing to buy products with packaging designed to be refilled, 79% are open to take-back schemes, and 79% would consider buying refurbished goods. These are not marginal or activist numbers — they represent mainstream consumer appetite for sustainable formats.

This finding aligns with separate research from Pro Carton, published just days earlier, showing that 72% of UK consumers prefer cardboard packaging over plastic, and that 62% say sustainable packaging increases their trust in a brand. Across surveys, the picture is consistent: consumer expectations around packaging sustainability are now firmly in the mainstream, not ahead of it.

What this means for businesses buying packaging

The combination of EPR fee modulation, DRS implementation, and strong consumer preference data creates clear, practical pressures on any business that sources packaging. Here are the implications:

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