RAM ratings barely move a UK packaging bill in year 2, but by 2028 to 2029 they decide it

From flat fee to rated fee

The legal base is The Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, SI 2024/1332, which extend to all four UK nations (regulation 1). Under regulation 60, a producer is liable for an assessment year if, in the calendar year before it, it acted in a listed producer role, was a large producer and supplied household packaging. Year 2, the 2026 to 2027 assessment year, is therefore charged on packaging supplied in calendar 2025. SPI’s UK tracker page holds the rule records behind this section.

The same instrument replaced the earlier data rules. Regulation 139 and paragraph 1 of Schedule 17 revoke The Packaging Waste (Data Reporting) (England) Regulations 2023, SI 2023/219, together with their Welsh, Scottish and Northern Irish equivalents and the 2023 and 2024 amending instruments. Those 2023 regulations, in force from 28 February 2023, had required producers in England to collect packaging data and large producers to report it every six months. The reporting habit they built is the data PackUK now prices.

Regulation 64 is the modulation clause. It applies to disposal fees for the 2026 assessment year and later years, and it lets the scheme administrator take account of reusability, reuse, recyclability and the environmental impacts of manufacture, transport, use and end of life (regulation 64(7)). PackUK may not modulate until it has published a statement of policy (regulation 64(12)), and it may not modulate in a way that pushes total fees above the net efficient disposal costs councils are likely to incur that year (regulation 64(11)).

PackUK’s statement, dated 28 June 2025 and published on GOV.UK on 17 February 2026, chose one factor for now: recyclability under RAM version 1.1. It sets the base fee as the amber fee, applies the red factors of 1.2, 1.6 and 2.0 to the three fee years to 2028 to 2029, and commits to a decision on later factors at a first review due no later than 2028. The statement also says the most recent RAM version at the time each year’s invoices are generated will be used.

The rating duty sits with the producer. Regulation 26 requires a liable producer to assess the recyclability of its household packaging, itself or through a third party, following the methodology PackUK publishes, and to redo the assessment if the design, composition or methodology changes. GOV.UK guidance says only large producers must collect and report recyclability assessment data.

Two features of Exhibit 2 matter for a budget. First, the amber column already sits above year 1 for seven of eight materials; only other materials fall. PackUK’s illustrative page attributes the change to council costs rising with CPI inflation of 1.9% and to lower reported tonnage, and it explains wood’s jump largely by material being reported under different categories. Second, in three materials, fibre-based composite, steel and wood, even the green rate is above the year 1 base fee, so a green rating softens the rise rather than reversing it. Aluminium, glass, paper and board, plastic and other materials have a green rate below year 1, by £6 to £54 a tonne.

Exhibit 2 also explains why the per-tonne view in SPI’s EPR fees per tonne analysis found the UK’s plastic spread narrow: in year 2 the dearest plastic rate is only 1.3 times the cheapest. That ratio is the one that changes most over the next three fee years.

What the rated data looked like in December 2025

The illustrative fees were built on thin data. Regulatory position statements let producers delay RAM reporting for January to June 2025, so PackUK’s green discount rests only on ratings submitted by 1 December 2025, which covered 45% of the tonnage reported for that half year (GOV.UK, December 2025). The page assumes the final year 2 mix will match that subset and warns that the assumption may be inaccurate.

How the green discount is funded

PackUK’s statement sets out the arithmetic in an annex. For each material, red tonnes times the fee times the red factor minus one forms a redistribution pot. Green tonnes times the fee forms the base. The discount is the pot divided by the base, applied equally to every green tonne in all eight materials.

The annex’s own example uses three materials (rigid plastic, paper and glass) at year 1 fees and a factor of 2, and arrives at a discount of 20.903% and a green rigid plastic fee of £334.58, down from £423. By SPI’s arithmetic on the annex inputs, the pot is 178,300 and the green base 853,000, which gives that discount.

The step from 9% to 45% follows from the formula. The discount equals the factor minus one, times the scheme’s fee-weighted ratio of red to green tonnes. A 9% discount at a factor of 1.2 implies a ratio of about 0.45. SPI calculation: at 1.6 the same ratio gives 0.45 times 0.6, or 27%; at 2.0 it gives 0.45 times 1.0, or 45%. Because PackUK’s 9% is rounded and provisional, a ratio between 0.425 and 0.475 is as consistent with the data, which puts the 2028 to 2029 discount between about 42.5% and 47.5%.

Three things will pull the real figure away from Exhibit 4. Redesign will shrink red tonnage and the pot with it. New cost and tonnage data will reset amber fees each year. And PackUK’s first review, due no later than 2028, may change the factors after 2028 to 2029. The exhibit is a reading of the formula, not a forecast of fees.

One producer, three fee years

To show the mechanism on a whole bill, SPI built one basket of 1,000 tonnes of household packaging supplied in a calendar year, with ratings set close to the scheme mix in Exhibit 3 but slightly redder. It is an assumption for illustration, not an average producer or any company’s data. Readers can replace it with their own mix in the SPI EPR & Plastic Tax Calculator.

Weighted by amber fees, the basket’s red-to-green ratio is 0.51, a little above the scheme’s implied 0.45. That single number predicts the direction of its bill: a producer above the scheme ratio pays more than an all-amber bill, and one below it pays less, with the gap scaling with the red factor.

Year 1 against year 2

SPI calculation: the year 1 bill of £269,970 becomes £290,900 if every tonne were amber in year 2, a rise of £20,930 or 7.8% driven by the base fee. Ratings then add £15,825 of red premium and remove £14,775 of green discount, a net £1,050. The rated year 2 bill is £291,950, 8.1% above year 1.

Plastic carries the modulation. Its 115 red tonnes generate £10,350 of the £15,825 red premium, 65.4% of it, while the 360 green tonnes of paper and board earn £7,200 of the discount. Inside one producer’s bill, modulation already moves money from the plastic line to the paper line; across producers it moves money from plastic-heavy portfolios to fibre and glass-heavy ones.

The year 1 comparison also has a rounding caveat. Year 1 fees were invoiced on figures to four decimal places, the 2025 base fees page says, while the published table rounds to the nearest £1. The year 1 outcome is covered in SPI’s report on PackUK’s first annual report and is not repeated here.

The 2027 to 2028 and 2028 to 2029 steps

SPI calculation: with amber fees held at year 2 levels, the basket costs £296,953.25 at the 1.6 factor and £300,988.75 at 2.0, which is 2.1% and 3.5% above an all-amber bill of £290,900. The total barely moves because the basket sits close to the scheme average. The composition moves a great deal: plastic rises from 41.5% of the year 2 bill to 50.1% in 2028 to 2029, while paper and board falls from 30.9% to 25.0%, though plastic is 25% of the tonnes throughout.

Fibre-based composite moves against the trend of the other fibre line. With no green tonnes in the basket, it collects no discount, and its 10 red tonnes rise from £630 to £1,050 a tonne. A liquid carton line capped at amber under RAM 2027 is a cost line that can only go up under this design.

SPI calculation: if the 60 amber plastic tonnes lacked evidence and defaulted to red, the year 2 bill would rise by £5,400 (60 times £90) and the 2028 to 2029 bill by £27,300 (60 times £455). The evidence file is worth more each year.

Four positions on the RAM fee map

The basket is one point on a map. SPI’s framework places a producer on two axes drawn from the official texts. The first is its fee-weighted red-to-green ratio against the scheme’s, about 0.45 in December 2025; this decides whether modulation is a net cost or a net gain. The second is whether its red tonnes are fixable by design under RAM 2027, such as a label, colour, print or size, or structural, where the format itself caps the rating, such as flexible plastic, wood without take-back or liquid cartons.

The axes are not abstract. RAM 2027 rates flexible plastic red by default and amber only with take-back evidence, rates wood the same way and caps liquid cartons at amber, while rigid plastic, glass, aluminium and steel can reach green (RAM 2027 materials assessment guidance). A brand selling crisps in film and drinks in cans can sit in two quadrants at once, which is why the map is best applied line by line.

The RAM 2027 rules that set the ratings

The methodology changes on its own clock. RAM version 1.1 applies to the 2026 reporting year, and PackUK said on 1 July 2026 that RAM 2027 applies to packaging supplied in 2027 and does not affect reporting for 2025 or 2026. The RAM 2027 publication was last updated on 20 August 2026, to clarify examples of traceability evidence for take-back schemes.

Unassessed packaging has one answer in every text. GOV.UK’s RAM guidance, updated 4 September 2025, classes in-scope household packaging as red where it has not been assessed or where the detail needed for an assessment is not available. The RAM 2027 materials guidance tells producers that packaging is reported as red if they do not have evidence that it meets an amber or green rating. Regulation 64(8) underpins both: where a liable producer has not provided sufficient information, PackUK is to treat the packaging as the least environmentally sustainable household packaging in its category.

The take-back route has its own test. The RAM 2027 overview requires collection points within 5 miles of at least 75% of the UK population or households, or a postal service covering at least 75% of UK home addresses, with all brands accepted, no purchase required and traceability through all four stages; producers using it for amber must tell PackUK. The process for changing the 2028 rules, opened on 22 October 2026, is covered in SPI’s RAM 2028 report.

Scenarios for 2027 to 2028 and 2028 to 2029

Because the green discount depends on everyone’s ratings, a producer’s future bill has two unknowns: what it does and what the market does. SPI ran the basket through both, one currency at a time and with year 2 amber fees held constant.

The market cases change the scheme’s red-to-green ratio. Low halves it to 0.225, as if the market cut its red tonnage sharply. Base keeps 0.45. High raises it to 0.60, as if the full-year data proved redder than the early-reporting subset. The producer cases are the basket as it stands and a redesign that moves 60 plastic tonnes and 50 paper and board tonnes from red to green, leaving 120 red tonnes.

SPI calculation: in the base case, redesign saves £10,800 in year 2 at illustrative rates, £32,886 at the 1.6 factor and £54,810 at 2.0, a fivefold rise in the value of the same design change over three fee years. The redesigned basket’s red-to-green ratio falls to 0.22, below the scheme’s, which moves it from paying for modulation to being paid by it.

The low case is the one most fee models leave out. If the market cuts its red tonnage by half and this producer does nothing, its 2028 to 2029 bill rises to £336,206.88, 11.7% more than in the base case, because the discount its green tonnes earn falls from 45% to 22.5% while its own red tonnes still pay double. Doing nothing is a bet that competitors will not redesign.

The high case shows the reverse. A redder market deepens the discount to 60%, and the as-is basket would cost less than at all amber. SPI analysis: no producer controls this variable, so the planning range, not the base case, belongs in the budget.

What a tonne is worth, material by material

The cleanest way to rank redesign work inside one currency is the value of moving one tonne from red to green, which is red fee minus green fee in each year.

SPI calculation: for rigid plastic, 1,000 tonnes moved from red to green is worth £130,000 a year at year 2 illustrative rates and about £659,750 a year in 2028 to 2029 on the base case. Moving the same tonnes only to amber is worth £90,000 and £455,000. The order of materials does not change between years, because every line scales with its amber fee, but the absolute stakes rise about fivefold.

Exhibit 11 also shows where redesign is a false economy. A material switch from red plastic to green board saves the plastic fee but adds a board fee; at 2028 to 2029 base rates, green board at £115.50 a tonne still undercuts green plastic at £250.25, but the comparison has to be made on tonnes after the switch, not before. Fibre packs are often heavier per unit than the plastic they replace.

How the notice turns ratings into cash

The rated tonnage reaches producers through the notice of liability. GOV.UK guidance, published on 23 March 2026, says the notice shows a disposal fee based on the weight and type of household packaging reported and any change in the per-tonne fee for environmental impact, which it calls modulation, alongside public information, administration and impairment charges, instalment dates and a virtual bank account number.

Regulation 68 makes the fees payable in quarterly instalments, or as the notice otherwise specifies, with interest only where the notice includes the required statement and at the rate it states. A producer that has not paid an amount within 50 days of its due date is in breach and exposed to civil sanctions. The guidance puts the variable monetary penalty at the higher of 20% of the unpaid fees or 5% of UK turnover for a single registration, or 2% of group UK turnover for a group, after a notice of intent with 28 days to respond.

The four nations share one calculation. SI 2024/1332 extends to England and Wales, Scotland and Northern Ireland, PackUK issues one notice per producer, and the operational plan forecasts about £1.558 billion of year 2 fee recovery, of which £1.47 billion is council disposal cost. Confirmed year 2 fees had not been published on GOV.UK’s EPR for packaging collection page, last updated on 8 October 2026, when SPI consulted it on 26 October 2026.