25th February 2026
Extended Producer Responsibility for packaging (pEPR) is a UK-wide environmental policy requiring producers (e.g., manufacturers, importers and brand owners) to pay the full cost of managing packaging waste at end-of-life rather than taxpayers and councils. It's designed to encourage better packaging design and higher recycling rates.
How It Applies in Scotland
Scotland Is Part of the UK-Wide pEPR Scheme
Scotland participates in the UK pEPR scheme alongside England, Wales and Northern Ireland. The scheme is administered jointly, with PackUK (and equivalents like PecynUK in Wales) collecting fees from producers and allocating funds to improve household packaging recycling services.
Funding for Scottish Local Authorities
The policy is already generating significant new funding for local authority waste collection in Scotland.
In the first year (2025/26), it's estimated that around £150 million will be paid to Scottish local authorities to support recycling and sustainability-linked projects (such as improving collection services).
Incentivises Better Packaging Design
Because producers pay fees tied to the cost of recycling and disposal, businesses supplying packaging in Scotland (just like elsewhere in the UK) are financially incentivised to:
Reduce unnecessary packaging.
Use materials that are easier to recycle.
Explore reusable or lower-impact packaging methods.
Over time, this helps reduce landfill and boost recycling performance in Scotland — aligning with Scottish government waste and climate goals.
EPR Is Aligned With Scottish Circular Economy Goals
The policy supports Scotland's broader circular economy and climate strategies (e.g., driving down carbon emissions and improving resource efficiency). It aligns with national waste and sustainability indicators such as lowering carbon footprint and protecting natural capital.
Who in Scotland Is Affected?
Businesses
Companies that manufacture, import, sell or distribute packaging for the Scottish market — and meet certain size thresholds — must now report detailed packaging data and may have to pay fees.
"Small producers" have reporting obligations.
"Large producers" face fees based on the type and recyclability of the packaging they place on the market.
Note: Fees apply nationwide, including Scotland, under the same scheme rules — but the funds are distributed so that each nation benefits from the money raised in its territory.
Impacts on Households in Scotland
Most direct costs and obligations are on businesses — households don't pay fees directly under pEPR.
However, households may indirectly feel impacts through:
Better recycling services funded by pEPR fees.
Potentially higher product prices if businesses pass on costs. (This has been flagged at the UK level, though estimates of inflationary impact vary widely.)
Fees and Implementation Status
Year 1 (2025/26): Fees were set based on obligations reported by producers; there was an initial funding gap that the UK government covered to avoid raising fees mid-year.
2026/27 onward: Fees will increasingly be modulated by recyclability — harder-to-recycle materials will attract higher fees, reinforcing material-choice incentives.
For Scotland specifically:
Scotland is fully part of the UK pEPR scheme.
Scottish local authorities are receiving significant new funding to improve waste and recycling services.
Businesses supplying packaging in Scotland now face new reporting obligations and may pay fees, with the structure designed to reward more environmentally friendly packaging.
The scheme aligns with Scotland's wider environmental targets and principles of the circular economy.
24 February 2026
Year 1 Extended Producer Responsibility for packaging fees update
An important update regarding the Year 1 Extended Producer Responsibility for packaging (pEPR) fees.
PackUK can confirm that there will be no change to disposal fees for Year 1 of the Extended Producer Responsibility for packaging (pEPR), which will remain as outlined in producers' Notices of Liability in October 2025.
As more accurate packaging data has been resubmitted by producers, PackUK identified a shortfall in the funding originally calculated for Year 1, primarily due to a reduction in tonnages reported. This situation is provided for under Regulations, and under normal circumstances, this would have required a recalculation of producer per tonnage fees. However, we recognise that packaging EPR is a significant change in how packaging is managed, and there has been a high number of resubmissions in the first year as businesses familiarise themselves with new requirements.
To address this shortfall and ensure local authorities receive the critical funding they were promised, the UK government has agreed to close the funding gap. This is a one-time intervention by the UK government to help mitigate increasing costs for producers and maintain stability during the first year of the scheme.
Local Authorities across the UK will receive the payments they are expecting to invest in improved waste management and recycling services.
Why did the shortfall occur?
Year 1 is a transition period for a complex new scheme of this scale. As reporting has progressed, the packaging data underpinning fee calculations has been refined, resulting in producers submitting a lower total tonnage than previously reported.
Under the regulations, producer fees are calculated by dividing the total cost of efficient household waste management by the total tonnage of packaging placed on the market. Consequently, a reduction in reported tonnage contributed to a shortfall. To ensure local authorities receive the full level of funding committed under packaging EPR, the UK government will cover this shortfall in Year 1 on an exceptional basis.
How are we improving the scheme?
As familiarity with the scheme grows, the scale of data corrections is expected to reduce significantly in future years. Furthermore, PackUK is taking steps to improve data stability and prevent late adjustments in future years. This includes bringing forward the deadline for producer data submissions and using updated Year 1 data to improve guidance and calculations, so businesses can plan with greater confidence.
The importance of the pEPR scheme
The scheme will secure £1.4 billion in the 2025/26 Financial Year for local authorities across the UK to improve packaging waste collection and recycling services and incentivise businesses to reduce their material footprint.
In July 2025, PackUK issued Notices of Assessment to local authorities confirming the payments they would receive. Many have already committed this funding to maintain collection services, upgrade sorting facilities, and invest in new recycling infrastructure. For example, pEPR payments are half funding a £12m investment by Suffolk County Council and Biffa to enhance the Masons MRF site in Ipswich.
pEPR is an internationally recognised model for driving transformation in recycling, with Producer Responsibility schemes established across more than 30 countries.
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