PackUK raised £1.41 billion in year 1. A £1.558 billion year 2 bill now lands by end-November

How PackUK's fee system works

PackUK is the scheme administrator for packaging EPR in all four UK nations and is hosted by Defra. Under the 2024 packaging regulations, tracked as PR-GB-002, a large producer (more than £2 million turnover and more than 50 tonnes supplied) pays a disposal fee on the household packaging it placed on the market in the previous year. PackUK passes the money to councils to cover the net cost of collecting and managing that waste.

The fee is set per material. PackUK takes net local authority cost for each material, adds its own running and bad-debt costs, and divides by household tonnage reported by producers. The year 1 base fees, published on GOV.UK on 27 June 2025, were flat: £423 a tonne for plastic and £196 for paper and board, whatever the pack’s recyclability⁶.

Year 2 (April 2026 to March 2027) adds modulation, tracked as PR-GB-003. PackUK’s modulation statement makes amber the base fee and multiplies it by 1.2 for red-rated packaging in 2026 to 2027, then by 1.6 and 2.0 in the two following years. The extra red revenue funds one percentage discount on all green tonnage, so total fees do not rise because of modulation⁵.

Ratings come from the recyclability assessment methodology (RAM), which PackUK revises each year. Plastic Packaging Tax, tracked as PR-GB-001, is a separate HMRC charge and not part of the PackUK fee.

“This was done on an exceptional basis as a one-time intervention to maintain stability during the first year of the scheme.” PackUK annual report, 30 September 2026, on Defra’s £102 million

What changed in the last two weeks

30 September: the annual report. PackUK’s first annual report put year 1 waste disposal fees at £1.41 billion and payments to councils at £1,336.9 million. It confirmed that Defra funded £102 million so that producers did not face fee recalculations, and that £770 million had been collected in cash by 31 March 2026¹.

1 October: the half-year data deadline. Large producers had to register for 2026 to 2027, pay the registration fee and report January to June 2026 packaging data by 1 October, under GOV.UK’s reporting guidance. The next return, for July to December 2026, is due on 1 April 2027⁸.

4 and 5 October: an opposition pledge to scrap the scheme. The Conservative Party said at its Birmingham conference that a future Conservative government would abolish packaging EPR, removing what it called a £1.5 billion “burden”, as reported by letsrecycle.com on 5 October. This is an opposition proposal, reported in trade press and not set out in an official document, and repeal would need new legislation. The same package would fold the Environment Agency and Natural England into Defra, letsrecycle.com reported, which would move the regulator that enforces producer obligations in England.

6 October: PackUK’s autumn timetable. At Defra’s Circular Economy Joint Stakeholder Forum, held on 6 October, PackUK said year 2 fees and notices of liability are expected at the end of November, alongside its five-year strategy, according to the Foodservice Packaging Association’s digest of 9 October. The FPA also reported a planned call for evidence on the future of fee modulation and work with the UK Packaging PRO on RAM 2028¹².

9 October: lower recycling obligations for 2026. The Environment Agency published RPS 383, under which it “will not normally take enforcement action” against large producers and compliance schemes that meet 83% of their plastic obligation, 92% for steel and 90% for wood. Full obligations still apply to other materials, and the statement is withdrawn on 31 January 2027³. The relief does not change producers’ legal duties: non-compliance with the statutory obligation still appears on the certificate of compliance, and records must be kept for five years.

12 October: a producer survey. Ipsos opened a Defra survey of packaging producers, run with the Welsh and Scottish governments and Northern Ireland’s DAERA, on how EPR has changed business decisions, the FPA reported. It closes on 20 November 2026, ten days before the year 2 notices are due. The FPA also reported that the Environment Agency has a specialised team using intelligence-led investigations into producers missing from the public registers, with civil sanctions for non-compliance.

“Greater forward visibility is welcome, particularly around Year 2 fees, RAM 2028 and the future of modulation.” Foodservice Packaging Association, 9 October 2026

What the year 1 accounts and the year 2 plan show

The annual report’s figures run from billing to cash. First notices on 14 October 2025 raised £1.46 billion on data reported by 22 September 2025, £63 million below the income PackUK needed. Revised notices on 25 March 2026, after resubmissions lowered reported tonnage, raised £1.411 billion¹. PackUK built a £50 million impairment provision, 4% of fees, into year 1 and reported no write-offs and no council payments outstanding at year end.

The report gives target income, including Defra’s money, as £1.523 billion. Revised notices of £1.411 billion plus Defra’s £102 million come to £1.513 billion, and the report does not explain the £10 million difference. On the council side the sums close: PackUK’s £1,336.9 million plus Defra’s £102 million is £1,438.9 million against £1.44 billion anticipated, by SPI’s calculation.

SPI calculation (year 1 reconciliation): fees raised of £1,409.8 million, less £1,336.9 million paid to councils and £18.7 million paid to PackUK, leaves £54.2 million. That equals the expected credit loss (£17.2 million) plus the refund liability (£37.0 million), so PackUK’s council payments were 94.8% of fees raised.

By nation, England received £1,039.9 million of PackUK’s payments, Scotland £157.4 million, Wales £88.7 million and Northern Ireland £50.9 million. PackUK’s operational plan sets year 2 disposal costs at £1.169 billion for England, £158 million for Scotland, £91 million for Wales and £52 million for Northern Ireland, totalling £1.47 billion². England’s share rises from 77.8% of PackUK’s year 1 payments to 79.5% of year 2 disposal costs, by SPI’s calculation, while Scotland, Wales and Northern Ireland each fall slightly. Part of the rise is a base effect, because Defra’s £102 million is not split by nation.

The same plan says PackUK “intends to issue the initial notice of liability for the 2026 to 2027 assessment year by the end of November 2026” and will not recalculate notices for producers who resubmitted data after 1 September 2026. GOV.UK’s resubmission notice of 6 July gives producers 50 calendar days to pay, with an instalment option⁷.

SPI calculation (year 2 against year 1): £1.558 billion is £35 million (2.3%) above year 1 target income of £1.523 billion, and £147 million (10.4%) above the £1.411 billion that year 1 notices raised from producers.

Who pays most in year 2

Plastic packaging. Plastic carries the highest illustrative amber rate of the main materials after fibre-based composite, at £455 a tonne, and the widest red-to-green gap, £130 a tonne, on PackUK’s December 2025 figures. The same tonnes also carry PRN costs, now eased to an 83% obligation for 2026, and Plastic Packaging Tax of £228.82 a tonne from April 2026 below 30% recycled content, a separate HMRC charge shown in the SPI EPR & Plastic Tax Calculator.

Wood and composites. Wood’s illustrative amber rate of £450 a tonne is 60.7% above its year 1 base fee of £280, which PackUK links to a large fall in reported wood tonnage, partly from reclassification. Fibre-based composite rises 13.9% to £525 amber and £630 red.

Tesco. Tesco reported UK sales of £49,819 million in 2025 to 2026, and its Annual Report 2026 names the new EPR levy as a cause of cost inflation and records a year-end payable for it, without a sterling amount in the sections cited. Its Sustainability Report 2026 puts UK Own Brand packaging at 99% recyclable by weight but 87% recyclable at kerbside¹⁴.

ALDI UK. ALDI UK reports a 2023 plastic packaging footprint of 124,940.15 tonnes, of which own-label primary packaging was 110,305.88 tonnes. As a retailer that is brand owner of its own label, it is the obligated producer for that packaging under PR-GB-002¹⁵.

SPI calculation (illustration only): at illustrative year 2 rates, moving 1% of ALDI UK’s 2023 own-label primary plastic (1,103 tonnes) from red to green would cut a disposal fee bill by about £143,400. This uses 2023 tonnage and assumed ratings and is not the company’s liability.

Drinks containers. Single-use PET, aluminium and steel drinks containers of 150 millilitres to 3 litres leave year 2 disposal fee tonnage because the deposit schemes will cover them, PackUK’s illustrative fee page says⁴. Drinks brands lose that tonnage from the EPR bill but take on deposit scheme obligations instead.

Glass and paper. Glass amber rises 6.8% to £205 a tonne and paper and board 7.1% to £210, the lowest rates in the table. Their red-to-green gap is £60 a tonne, less than half the plastic gap, so brands moving from plastic to board cut both the rate and the modulation risk at illustrative figures.

The data problem behind the fees

Year 1 showed how far fees depend on what producers report. Resubmissions after the first notices lowered reported tonnage, and with costs fixed, a smaller tonnage base would have pushed every rate up; Defra’s £102 million avoided a recalculation, the annual report says¹.

Year 2 starts from thin data. The illustrative rates of December 2025 were built on six months of 2025 tonnage extrapolated to a year, and on RAM returns covering only 45% of that tonnage, rated 71% green, 8% amber and 21% red. PackUK called the rates “likely to change significantly” and put the green discount at about 9%, to be set once final RAM data is in⁴.

The size of the discount depends on how much tonnage ends up red. More red tonnage means a larger red premium pool, and therefore a deeper discount on green, so a producer’s bill depends on its competitors’ ratings as well as its own. No producer will see the final discount until the November notice arrives.

The recycling side has its own data gap. The BRC’s 30 August release said average plastic PRN prices had doubled in a year, and the Environment Agency’s RPS 383 cut the 2026 plastic obligation to 83% six weeks later. Producers therefore face two moving costs on the same plastic tonne in the same quarter.

How the UK compares with France, the Netherlands and Ireland

Other European schemes price plastic on different bases, which is why the figures below sit side by side and are never compared directly. France’s Citeo charges a weight rate per material, adds per-unit charges and applies percentage bonuses and maluses. Its 2026 tariff guide lists a clear PET bottle at the equivalent of EUR 700.0 a tonne, up 30.8% on 2025, and flexible PP at EUR 840.1¹⁶.

In the Netherlands, Verpact’s 2026 policy sets rigid plastic at EUR 1.22 a kilogram and flexible plastic at EUR 1.32, unchanged on 2025, with discounts of up to EUR 0.60 a kilogram for recycled content and design. The Dutch tariff is also the plainest example of material choice driving cost: paper and board pays EUR 0.017 a kilogram against EUR 1.32 for flexible plastic. Ireland’s Repak, in its 2026 Regular Member fees sheet, charges brand holders EUR 616.22 a tonne for non-recycled plastic in 2026, against EUR 165.70 for recycled rigid plastic, and charges material makers, converters and retailers a small fixed share on top under its shared responsibility model.

Italy moved most recently. CONAI announced on 25 May 2026 a plastic increase taking effect on 1 October 2026, citing higher collection, sorting and recycling costs and weak demand for some recycled fractions. Its current table lists the hardest-to-recycle band C plastic at EUR 922 a tonne, up 16.7% on mid-2025.

Scale is just as hard to line up. Citeo’s 2025 activity report gives EUR 1,460 million of household packaging contributions for 2025, and PackUK raised £1.41 billion for its year 1; the currencies, periods and scopes differ, so the two are not added or ranked. Germany is not in the table, because its competing dual systems set licence fees by contract and no single public plastic rate exists.