Annex 4 Update: How the Environment Agency’s New Civil Sanctions Affect Producers

The Environment Agency (EA) has sharpened its approach to enforcement and sanctions. In a newly published Annex 4 to its Enforcement & Sanctions Policy, the EA explains how it will apply the new civil sanctions regime introduced by the Environment Act 2021.

The update means that the consequences for producers who attempt to “free-ride” have become more severe: heavier financial penalties, legally binding enforcement undertakings, public naming, cost recovery and, where necessary, prosecution.

While pEPR is a UK-wide regime, this article relates specifically to the Environment Agency’s enforcement approach. The other UK nations are regulated under their own respective enforcement policies and frameworks administered by SEPA, NRW and NIEA.

Annex 4 sets out how the EA will use its civil sanctions powers for breaches of certain waste and resource efficiency regimes, including the Producer Responsibility (Packaging and Packaging Waste) Regulations 2024 (pEPR).

Under pEPR, producers are responsible for the full end-of-life costs of packaging. The civil sanctions regime is intended to uphold the integrity of that system by giving the EA flexible, proportionate enforcement tools alongside traditional criminal prosecution.

For many pEPR requirements, the same breach can be:

• A civilly enforceable breach, and
• A criminal offence.

The EA will choose the most appropriate response based on the facts, reserving criminal prosecution for more serious or reprehensible conduct (e.g. fraud, bad faith, deliberate misreporting).

The EA will normally publish the name of the business, the requirement breached, and the penalty imposed, making reputational risk a visible and credible consequence.

The EA now has new enforcement tools via civil sanctions that are simpler and quicker to implement than criminal prosecution. Whereas criminal enforcement requires proof ‘beyond reasonable doubt’, civil sanctions can be imposed on the balance of probabilities (a lower evidential threshold). This allows the EA to act more swiftly where evidence clearly indicates non-compliance.

Businesses can also offer Enforcement Undertakings to the EA. These are voluntary, legally binding agreements to put right the effects of a breach or deliver an environmental benefit in lieu of, or prior to, formal sanctions. Once accepted, an undertaking becomes a binding commitment; failure to comply may lead to further penalties or prosecution.

If a business is complaint with the agreed undertaking, the EA cannot pursue criminal proceedings or apply a civil sanction for that breach or offence. Consequently, the business will not receive a criminal record or pay a penalty for that breach. However, the details of the undertaking offer will be published on the GOV.UK website and may be included in the public register where necessary.

The EA are more likely to accept enforcement undertakings “when they are offered early and proactively”[1]. When assessing an offer, the EA will compare the value of the money, benefit or improvement proposed with what it would otherwise have calculated as a variable monetary penalty (where applicable). In practice, the value of the undertaking would need to be broadly equivalent to the sum of a variable monetary penalty.

[1] 3.1 When the Environment Agency will accept an offer, Annex 4: Environment Act 2021 – the Environment Agency’s approach to applying civil sanctions and accepting enforcement undertakings – GOV.UK

Under Annex 4, the EA signals that it will use a broader range of enforcement measures, including:

• Fixed monetary penalties – typically starting from around £1,000 for certain minor breaches.
• Variable monetary penalties – potentially substantial, with Defra’s indicative guidance suggesting that the starting point for a serious or deliberate breach by a large organisation could reach £1 million (range £450,000–£3 million), while smaller businesses face proportionate amounts.
• Compliance notices, enforcement undertakings, and cost-recovery notices to recoup the regulator’s investigation and enforcement costs.

The EA indicates that it will prioritise enforcement where breaches undermine the integrity of the regulatory framework and may take into account how long a business has been subject to its legal obligations when assessing sanctions.

The updated Annex 4 reinforces the EA’s “firm but fair” approach to environmental regulation. For compliant producers and members of recognised schemes, it provides greater clarity and consistency about how the rules will be enforced.

The policy ensures that responsible businesses are not disadvantaged by those who fail to comply. It supports a level playing field across the packaging and resource-management sector by tackling free-riding and removing the financial gains of non-compliance.

The hierarchy of responses is explicit:

Advice and guidance → Warnings → Notices and orders → Civil sanctions → Criminal prosecution

The policy focuses on four core enforcement outcomes:

1. Stopping illegal activity.
2. Restoring environmental harm.
3. Bringing activities into compliance.
4. Punishing and deterring offenders.

Upholding the integrity of the pEPR regulatory framework is essential to:

• Reducing the UK’s environmental impact and contribution to climate change.
• Supporting green and sustainable growth.
• Minimising the creation of packaging waste.
• Boosting packaging recycling rates.
• Encouraging the use of more sustainable, easily recyclable materials

Our compliance experts help members understand their obligations, submit accurate data, and meet deadlines under the evolving pEPR framework. Our aim is always to ensure that Clarity members are fully aware of their legal responsibilities, and fully supported to meet those responsibilities.

Our team, however, can also support you to negotiate any previous episodes of non-compliance, and we have successfully supported many businesses in finding the best outcome where non-compliance has occurred. So, if you need our assistance in this way, please reach out to our team and your enquiry will be treated professionally and in confidence.

Clarity members benefit from in-depth regular policy updates, webinars, and practical support materials, ensuring they stay informed, confident, and compliant at every stage of their producer journey.

Read the full policy here: Environment Agency enforcement and sanctions policy – GOV.UK