PackUK has confirmed that the first year of the UK’s Extended Producer Responsibility for packaging (pEPR) scheme will face a funding shortfall of approximately £63 million.
The gap emerged after producers resubmitted packaging data during 2025, resulting in lower overall reported tonnage than originally declared. Because disposal fees are calculated based on this reported tonnage, the revisions reduced the total funding available to cover payments due to local authorities.
Under the scheme’s original modelling, around £1.44 billion was expected to be distributed to local authorities in Year 1. However, invoices issued to producers totalled £1.46 billion, slightly below the £1.523 billion required to fully fund the system.
Government Intervention Confirms No Change to Year 1 Fees
To maintain stability during the first year of the scheme, the UK government has confirmed it will cover the £63 million shortfall as a one-off intervention.
As a result:
- There will be no increase to Year 1 disposal fee
- Producers will not face additional invoices
- Local authority payments will continue as planned
PackUK has confirmed that disposal fees per tonne will remain as outlined in producers’ original Notices of Liability (NoLs).
Producers who resubmitted packaging data and had their submissions accepted by the regulator will receive updated Notices of Liability reflecting the approved tonnages by the end of March.
In addition, some producers, may see slightly reduced total invoices where PackUK administration fees are adjusted downward.
Year 2 Recovery Target Set at £1.56bn
Looking ahead, PackUK’s 2026/27 operational plan indicates that £1.56 billion will need to be recovered from producers in Year 2 of the pEPR scheme.
Final per-tonne disposal fees will not be confirmed until regulators have received and validated all 2025 packaging data submissions, with calculations expected to conclude in summer 2026.
Defined Recalculation Timetable for Producers
In response to the large number of producer data resubmissions during the first year of the scheme, PackUK has outlined a more structured recalculation schedule for the 2026/27 period.
The proposed schedule includes:
- July 2026 – Initial Notices of Liability issued
- November 2026 – Formal recalculation point
- February 2027 – Contingency recalculation window
- Late March / early April 2027 – Final year-end recalculation
PackUK has also stated that after 1 October 2026 it will no longer revise notices of liability where producers submit updated data that reduces their financial obligation.
What This Means For Producers
The Government’s intervention avoids the risk of unexpected additional charges during the first year of pEPR, providing welcome cost certainty for producers.
However, the changes introduced by PackUK highlight the importance of accurate and timely packaging data submissions, as the scheme moves towards tighter reporting deadlines and more structured recalculation processes in future years.
