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Packaging Waste (Data Reporting) (England) Regulations 2023

Volume 827: debated on Tuesday 21 February 2023

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Packaging Waste (Data Reporting) (England) Regulations 2023.

My Lords, the regulations were laid before the House on 9 January. The date of laying is the same as in the other place.

These regulations are essential secondary legislation needed to implement extended producer responsibility for packaging. Extended producer responsibility will move the full cost of dealing with packaging waste away from households, local taxpayers and councils and on to its producer. Producers will pay fees to cover the cost of collecting and treating household packaging waste handled by local authorities.

This means that, for the first time, producers will be responsible for the cost of managing their packaging once it reaches its end of life. This will encourage businesses to think carefully about how much packaging they use, make packaging easily recyclable and encourage the use of reusable and refillable packaging. This will help reduce the amount of unsustainable packaging that is produced and used each year, reducing the damaging impacts that materials such as plastic are having on our global environment.

These measures will also help to reduce greenhouse gas emissions by more than 2.2 million tonnes by 2033—the equivalent of 5.1 million barrels of oil—as the creation of new packaging using virgin materials is reduced and producers are incentivised to manage resources more efficiently. This will contribute to our commitment to decarbonise all sectors of the UK economy and achieve net zero by 2050.

In addition, the shift of cost from local authorities to producers will provide an estimated £1.2 billion of funding to local authorities across the UK each year for managing packaging waste, easing the pressure on squeezed council budgets.

We set out the intention to introduce extended producer responsibility in the 25-year environment plan and in the 2019 manifesto. Working with the devolved Administrations, we have agreed to introduce extended producer responsibility for packaging at a UK level.

I now turn to the details of this instrument. These regulations will require packaging producers to collect and report data on the amount and type of packaging they supply from March 2023, or from January 2023 if they hold this data. This data is required to calculate producers’ recycling obligations and the extended producer responsibility fees that these producers will pay to cover the costs of managing household packaging waste from 2024.

Packaging producers already report data on packaging under the current producer responsibility regulations. These new regulations will refocus the obligation on to producers, who have the most influence over what packaging is used. They will require producers to report more information than they do currently about the type of packaging they produce. Larger producers will also be required to increase the frequency of their reporting from once to twice per year.

We expect these data reporting regulations to be in force for only one year, after which they will be revoked and replaced by new producer responsibility obligations (packaging and packaging waste) regulations, which will be laid later in 2023 and will contain similar provisions relating to data collection and reporting. These data regulations will apply to England only, but similar regulations are being progressed in parallel in Wales, Scotland and Northern Ireland. My officials have worked closely with the relevant departments in the devolved Administrations in the development of this legislation.

A full impact assessment for the packaging extended producer responsibility scheme has been prepared and laid alongside this instrument. The impacts of these specific regulations on business are limited to the additional data collection and reporting requirements, and familiarisation with the new regulations.

When extended producer responsibility is introduced in 2024, there will be additional costs for businesses that handle packaging through the fees they will be obligated to pay. This will result in a net gain for the public sector, as producers make payments for the costs of managing household packaging waste by local authorities.

To reduce the burden on small producers, we will retain the current de minimis threshold for producers who are obligated to pay fees to cover disposal costs. To ensure that all packaging is accounted for, packaging manufacturers and importers will be responsible for paying fees for any unfilled packaging that they sell to producers under the de minimis threshold. This will result in more packaging being reported in the system and the costs being shared more fairly among producers, while protecting the smallest businesses from burdensome reporting obligations.

In conclusion, I reiterate that the measures in these regulations are crucial for enabling the implementation of extended producer responsibility and the associated environmental benefits. I commend these draft regulations to the Committee.

My Lords, I very much support this draft statutory instrument. It will be only short lived, so even if it were to have a massive impact it would not be around for that long. Actually, the principle, which is making sure that producers take responsibility for the environmental impacts they bring to the marketplace through their packaging, is the right one. I commend the Government for the steps, particularly in this SI, to take this forward pragmatically.

I also thank Zack from the Minister’s team, who answered a question at short notice today on the impact of the statutory instrument. That was extremely helpful and I was very grateful.

As the Minister said, these regulations will be in place for only about a year. They will be superseded by the producer responsibility obligations regs, which are due to come into force later this year—is that still going to happen? Although I applaud the department’s initiative, its record in terms of timing, for example with the delays to the deposit return scheme and to the EPR on textiles, has been less tight than we might have hoped. Given the importance of addressing issues around the circular economy, does it look likely that the producer responsibility obligations regs will come out by the back end of this year?

I make two further brief points. The first is in the regulations themselves. Regulation 4 says:

“For the purposes of these Regulations, the Waste Directive is to be read in accordance with this regulation.”

Again, this is a commendable way of updating necessary legislation—looking at what we had from our time in the European Union, building on it and amending it where needed, rather than a wholesale, ideological revocation through Bills such as the retained EU law Bill.

Putting that to one side, my final point is that the impact assessment is really interesting. I thoroughly enjoyed ploughing through it, as opposed to reading only a couple of pages. I was really pleased to see that the Government’s intention, when they bring forward the producer responsibility obligations later in the year, is to mandate companies to label their packaging clearly. The impact assessment actually gives us some indication of what that packaging will be. I thoroughly applaud that. I regard myself as fairly au fait with recycling, but it is really hard for anybody to do a proper recycling job. Even if you are committed to recycling, the plethora and inconsistency of labels is a big issue. So it was really welcome to read in the impact assessment the Government’s acceptance of the problem and their commitment to do something about it. I am delighted, particularly as chair of a Select Committee that did a report last year on mobilising behaviour change in this area, that the department are taking action on this.

I have one specific question. I do not expect the Minister to reply to me now, but if he would like to at some future date, I would be delighted. The impact assessment says at page 15:

“Further to this, producers will be required to fund national communication campaigns, run by the EPR Scheme Administrator, to educate consumers on where and how to recycle their packaging.”

Again, I absolutely and fully applaud that. In advance of the SI coming before us, I hope later this year, it will be very interesting to have an estimate of the budget the Government think that producers might be liable for in order to deliver it. We know from the pandemic just how important clear communication is to get people to change their behaviours, and the need for above-the-line spend. It would be great to know the estimated budget for this at some point, but I welcome this SI and the direction of travel that the Government are taking.

My Lords, we welcome this SI and agree with a number of points that the noble Baroness, Lady Parminter, made. The SI will enable data collection to inform fees to be paid by producers under the new extended producer responsibility for packaging scheme. A number of producers have made progress in making their packaging more recyclable and reusable. We hope that the EPR scheme will accelerate this once it is fully on stream, but the Government will need to keep on top of the data and ensure that industry delivers.

This SI was previously withdrawn and replaced, but the Explanatory Memorandum makes no reference to this. Will the Minister confirm what has changed? Was it just correcting some minor typos or is there any wider policy change?

This is a UK-wide policy, but the primary legislation allows SIs to be made in relation to England only. Paragraph 6.2 of the Explanatory Memorandum says that the Welsh and Scottish Governments and the Northern Ireland Executive will lay their own SIs in due course. What are the timescales, and is the relevant Northern Ireland department able to do this in the absence of a functioning Northern Ireland Executive?

In the other place, the Minister, Rebecca Pow, said:

“A new digital system is being created to handle it all, which is critical.”—[Official Report, Commons, Fifth Delegated Legislation Committee, 2/2/23; col. 8.]

Can I ask for more details about this, as the Government’s IT projects rarely go to plan? Is the system on time and within budget? Is it still being tested or is it ready to be rolled out?

The Minister talked about the Government’s environmental improvement plan on implementing EPR for packaging. However, I want to ask in particular about the statement in the plan that says:

“We are engaging with stakeholders to shape the future vision of waste reforms through industry wide sprint events, deep dive sessions and fortnightly forums.”

Will the Minister tell us more about the engagement that has taken place so far and confirm that the Government are engaging not just with industry stake- holders but with environmental groups?

I also ask about the flexibility in the system should any issues arise. If the first tranches of data are not of high enough quality, how long would it take to resolve this? If we end up with issues around the thresholds, how quickly could Defra address them? What other initiatives are being brought forward to address the waste crisis overall?

From my understanding, around 1,800 more businesses will now face reporting obligations, but does the Minister have a precise number of businesses affected? The Government’s own impact assessment, which the noble Baroness talked about, suggests that the number could be as high as 15,000 or as low as zero. What is the figure, and what will the Minister do to ensure that the legislation means something?

Finally, can the Minister be clear that the new system will improve the quality of data compared with the one it is replacing? Without clarity or understanding of our actions, this draft SI will be what we have become used to: more of the same dithering and delay. I look forward to the Minister’s response.

I am grateful to both noble Lords for their support for this proposal. I will seek to answer their questions.

The noble Baroness, Lady Parminter, asked whether it is going ahead and whether there will be any delays. It will go ahead and there will be no delays. It will be at the end of the year, as planned.

The noble Baroness is right to ask about communications, which of course will vary by producer. This partly answers the question from the noble Lord, Lord Khan, about engagement. We have gone through an exhaustive process of engagement with business and with other organisations interested in this issue. That has included webinars, one-to-one sessions, and consultation with trade bodies and businesses in general. We do not see this as a completed work because, as the noble Baroness pointed out, this is a short-lived legislative measure that will be replaced, so we will have to continue to consult. We will consult as we roll out the whole extended producer responsibility plan.

As part of the transition between the old regulations and the new, producers and compliance schemes will still need to comply with their 2023 obligations in respect of packaging placed on the UK market in 2022, which are determined by the 2007 regulations. The data reporting regulations and the 2007 regulations will be revoked by the new producer responsibility obligations (packaging and packaging waste) regulations, which are expected to come into force towards the end of 2023. The regulators will keep producers informed about compliance requirements as part of the transition from the 2007 to the 2023 regulations.

The noble Lord, Lord Khan, asked why the SI has been delayed. This was to make some corrections to the drafting. These amendments ensure that the policy intent will be met, and no changes to policy have been made through them.

The noble Lord raised the implementation of this in Northern Ireland, where there is no functioning Administration. There will be no issue with rolling this out in Northern Ireland as a result of that, but obviously we hope for a resumption of the kind of government that people in Northern Ireland had grown used to. We want to see that work.

The noble Lord raises a good point on IT. Over many decades the history of government IT projects has been mixed, but we think we have the means to make sure that what we are collecting is clearly understood and will be more clearly understood as we roll it out, that the information we receive is what we need to receive, and that it is collated in a way that causes as little burden as possible on the business but provides us with the information we need. At the moment we are short of data on this. If our extended producer packaging responsibility scheme is to work, we need this information.

It is worth noting that it will be for individual producers to decide the extent to which they seek to minimise costs and whether to pass the costs of EPR on to their customers. Our analysis suggests that if producers do not seek to minimise costs, and if they pass the majority of these costs on to consumers, it could increase CPI inflation by between 0.07% and 0.09%, packaged retail goods inflation by 0.17% to 0.34%, and costs to households by £24 to £48 per year. That is if businesses transpose the full burden on to the customer.

Of course, the whole purpose of this is to drive a massive change in behaviour across industry. The incentives now will be to minimise packaging where possible, and technology will help. We will drive this not just as a Government wanting to do this; the message is being received loud and clear by such organisations as retailers. Their customers want less packaging and packaging that they can recycle, so there are pull factors as well as push factors. Many parts of business are very keen on this.

On the estimated number of producers being brought into the new de minimis scheme–this relates to the numbers that the noble Lord raised–with the data currently available we cannot provide a more accurate estimate. Our current best estimate is an additional 1,823 businesses, but we accept that this is uncertain, which is why we need those smaller producers who will have only a reporting obligation. There will be no cost element to that. I hope that this will go a long way to help our very ambitious waste targets that we have spoken about in a variety of different documents, not least the 25-year environment plan.

I hope that I have answered all noble Lords’ questions, and I trust that they understand and accept the need for this instrument, as they have said they do. It will require packaging producers to report data on the amount and type of packaging that they supply in 2023. This data will be used to calculate producers’ recycling obligations and the extended producer responsibility fees that the producers will be required to pay to local authorities from 2024 to cover the costs of managing this packaging once it becomes waste. This will encourage businesses to think carefully about how much packaging they use and to design and use packaging that is easily recyclable. It will also encourage the use of reusable and refillable packaging.

Once again, I thank noble Lords for their contributions and support today and commend these regulations to the Committee.

Motion agreed.