Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2023
(1 year, 1 month ago)
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Lord Benyon
That the Grand Committee do consider the Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2023.
Relevant document: 38th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, these regulations were laid before this House on 20 April. The date of laying is the same as in the Commons.
These regulations amend the Packaging Waste (Data Reporting) (England) Regulations 2023. Since those regulations came into force, further engagement with stakeholders has brought to our attention two key issues, which these amendments seek to resolve. Along with these, we have taken the opportunity to pursue additional amendments that improve the clarity of provisions.
Let me turn now to the details of this instrument. These regulations introduce two key changes, but I can assure noble Lords that the changes being introduced are not a change of policy. First, this SI adds to the obligations of importers of packaged products or unfilled packaging. Erroneously omitted from the original statutory instrument, importers will need to report packaging which they import and subsequently dispose of without supplying onwards. It was always our intention to include this packaging in the regulations and, indeed, it is data which importers already collect and report under the current packaging producer responsibility scheme. We estimate that the amount of packaging this relates to is approximately 1 million tonnes, or about 8% of the total amount of packaging placed on the market each year in the United Kingdom. If this packaging were to go unreported, it would seriously hamper the proper functioning of the packaging recovery note system and would also lead to a distortion of the producer fees that will be payable under packaging extended producer responsibility.
Secondly, this amending statutory instrument makes changes that remove uncertainty around the definition of a brand owner. These amendments address two main scenarios, the first being where there is more than one brand name printed on the packaging—for example, a limited-edition chocolate Easter egg made by one brand that contains a toy made by a different brand. The amendments make it clear that it is the brand that first sells the packaged product that is responsible, which in this instance is the brand owner of the Easter egg, not the brand owner of the toy. The second brand scenario is where a single sales unit groups together multiple items from different brands. An example of this would be the Sunday Times wine box. The amendments make it clear that the brand which brings a number of other products together into a single product should be responsible only for the packaging it adds. In this example, the Sunday Times would be obligated for the carboard box, and the wine producers would be obligated for their wine bottles.
In addition to the two key areas I have discussed, the regulations also make several other changes, and I will now briefly discuss them. The amendments provide further clarification on the data reporting requirements for reusable and refillable packaging and simplify the reporting. As drafted, the regulations require producers to report if their reusable packaging was refilled at home or in-store. The amendments remove the need to describe the type of reusable system, which will reduce the data-gathering and therefore burdens on those producers.
However, key data will continue to be reported to inform policy development ahead of introducing new measures to increase the uptake of reuse and refill systems in 2025. This data is the amount of reusable packaging a producer has supplied and whether it is primary packaging. Primary packaging is the packaging which surrounds a product and forms a sales unit to the consumer—for example, a reusable plastic detergent bottle—whereas secondary and tertiary packaging are the items of packaging which businesses interact with and are typically removed before a product is sold to a consumer: for example, carboard boxes used for display purposes or pallets used in the distribution of products.
The changes will also allow producers that have instituted reuse systems to obtain a discount on their extended producer responsibility disposal cost fees where they have collected this waste packaging and sent it for recycling. The amendments also include minor corrections to the drafting of the data SI and fix some incorrect cross-references.
These amending regulations will apply to England only, but similar regulations are being progressed and amended, where needed, 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.
In conclusion, I emphasise that the measures in these amending regulations are crucial for enabling the effective implementation of extended producer responsibility for packaging and realising its associated environmental benefits. I commend these draft regulations to the Committee.
Baroness McIntosh of Pickering (Con)
My Lords, I am grateful to my noble friend for giving us the opportunity to debate these regulations. I generally support them, but I have a couple of queries. One relates to the 38th report from the Secondary Legislation Scrutiny Committee, which refers to a submission from Green Alliance that questions how the offsetting set out in the regulations will work and how Defra will ensure that
“the ability to offset obligations will not create incentives for producers to recycle potentially reusable packaging before it reaches the end of its useful life, to avoid paying producer fees”.
It is important to point out that this is a very complex area of policy that the Government are trying to roll out.
I received a briefing from the Food and Drink Federation earlier this year on its concerns about extended producer responsibility, which forms the crux of these regulations and is explained in the impact assessment and the Explanatory Memorandum. The problem we face—as my noble friend is extremely well aware, having served, as I have, as an MP in the other place—is that every single local authority seems to have a different rule relating to how waste packaging is to be disposed of. There is then the problem of potential contamination, particularly if foodstuffs form part of the waste disposed of.
From the consumer point of view, it is a bit depressing to learn that, although hundreds of local councils collect household waste, each has different rules as to how it can be recycled, which bin to put it in and what consumers should do with their waste. Then they find that much of it is not recycled at all; it is incinerated. Years ago, when my noble friend and I served as shadow Ministers in the other place, I went on a visit to SELCHP—South East London Combined Heat and Power—which now is combined heat and power but at the time was not. It burned everything, but it did not do anything with the energy it could have recovered from the process. It was interesting to see that all the waste from Westminster at that time was not recycled; it was just burned.
The Food and Drink Federation has raised some very real questions, which I ask my noble friend to comment on in the context of extended producer responsibility. First, should we not have basic principles agreed at the outset by all concerned? That would include the producers of the packaging, the manufacturers of a product, the Government and the local authorities which are looking to recycle. Secondly, it asks: how should an extended producer responsibility be framed as it relates to local government, including the financing
“of potential stranded assets and management of existing local government contracts”?
How could those be managed as part of an agreed transition without hampering the development of what everyone wants to see: a long-term, world-class solution to enable the UK to reduce the cost and disruption of packaging?
Thirdly, the federation calls for “Partnership with industry” to bring about a producer-led extended producer responsibility that harnesses the considerable expertise arising from setting up these schemes all over the world. This would
“drive innovation and business growth while constraining costs”
that would otherwise
“lead to higher consumer prices”.
The example it gives is that of a biscuit wrapper, in which the flexible plastic used
“is specially designed to guarantee the freshness and quality of the biscuits in it. The companies that use this type of valuable, flexible plastic for biscuits and other food types need it back. But flexible plastics are neither collected nor recycled in the kerbside system today”.
Does my noble friend not agree that in a good end-to-end extended producer responsibility system,
“each biscuit wrapper thrown away should be collected and given a second life as part of a circular system, creating jobs and driving green growth along the way”?
That is my main concern, but the other concern the Food and Drink Federation has raised is the way in which the Government have created their producer-led scheme administrator. It seems to be different in this country from other models that have been used elsewhere. Why have the Government chosen the model that we have for extended producer responsibility?
While I support the regulations before us, there are obviously practical problems with the way they have been drafted. I think my noble friend said that these are amendments to previous regulations, which presumably came before the House as well. I realise that this is a complex area but it would be better, in one sense, to slow the process down and have regulations which are fit for purpose: for the consumer, so we know what we are doing when we dispose of the packaging; for the producer, so they know what they are doing when they create the packaging in the first place, and are held responsible for that packaging; and for the local authorities which collect and dispose of this packaging. I support the amendments but I would welcome my noble friend’s comments in this regard.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introductory remarks and welcome this SI, which is intended to reduce the amount of plastic packaging in circulation. This is long overdue and I look forward to seeing a lot less packaging from McDonalds, Kentucky Fried Chicken and other fast-food outlets littering our town centres and rural countryside.
The SI makes provision for the collection of data about plastic packaging ahead of the full implementation of the regulations in 2024. I will read out in full Paragraph 7.1 of the EM, because I will be referring to it later:
“Extended Producer Responsibility … for packaging will require producers to take responsibility for the environmental impact of the packaging they supply by obligating them to pay for the collection and disposal costs of this packaging when it becomes waste. This will provide a financial incentive for producers to reduce the amount of packaging they supply and to improve the recyclability of their packaging”.
Hooray—and not before time.
The regulations, and the need to collect and report the data on the plastic packaging used, apply to those businesses with an annual turnover of £2 million and above. But the de minimis threshold turnover is £1 million, at which level the data has to be collected but not reported. Can the Minister say why this is? What is the purpose of collecting the data if it does not have to be reported?
Defra conducted a consultation with industry on the implementation of these regulations twice: first, from February to May 2019, when there were 679 responses; and secondly, from March to June 2021, when there were 1,241 responses—nearly double that of the earlier consultation. The first consultation was a general one while the second was more detailed and outlined the proposals to require producers to report twice yearly in April and October, covering a six-month period; it could be that that detail is what generated the greater level of response.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I thank the Minister for outlining the amendments to the data reporting regulations, which your Lordships’ House passed in February this year. As it is a sunny Monday afternoon and we are all rather relaxed after the recess, I will not be churlish but will congratulate the Minister and his department for listening to industry and bringing amendments this quickly. His Majesty’s Opposition support this and all measures that actively seek to promote better use of our natural resources and active recycling programmes. The establishment of correct base data is fundamental to the success of the associated schemes. However, I have a few questions for the Minister, which I hope he can assist us with.
While I appreciate that the SI is limited in scope to data collection to ensure that we have accurate facts and figures at hand for the imminent implementation of the extended producer responsibility scheme, there are substantive issues associated with the EPR itself. Can the Minister assist us with an update following news coverage last week that the food industry is seeking delays to the implementation of the extended producer responsibility scheme? Can he assure the Committee that the current timescale for implementation remains in place? Would the Minister also be kind enough to inform your Lordships of his department’s most recent engagement with both the British Retail Consortium and the Food and Drink Federation regarding the details of the scheme, given their public concerns?
Much debate in the other place focused on the potential impact of this new scheme on small businesses, many of which are facing other challenges at present. We appreciate that Defra has carefully considered the turnover and tonnage thresholds, and that the department has been running engagement sessions for producers, but does the Minister have anything new to say on information sharing and implementation dates?
These regulations also add the obligations of importers, which were
“Erroneously omitted from the original statutory instruments”.—[Official Report, Commons, Second Delegated Legislation Committee, 23/5/23; col. 1.]
Given that imported packaging makes up around 8% of that placed on the UK market each year, and that, by the Commons Minister’s own admission, not including this data would “distort the system”, how is it possible that Ministers missed this before now?
Among other things, this SI deals with reusable forms of packaging, such as bottles or containers that may be used to purchase household items at zero-waste shops. The Minister knows that questions have been raised, via the Secondary Legislation Scrutiny Committee, about the potential for offsets to incentivise the early recycling of reusable packaging, so that firms avoid paying producer fees. The department’s response has been published online, but could the Minister read a summary into the record?
These seemingly minor changes to the regulatory framework could have a further inflationary effect on our food prices when the EPR is implemented. Food inflation is running at 19.1%; if food manufacturers opt to pass the full costs of these regulations on to the consumer—a sum the BRC currently speculates to be in the region of £1.7 billion per annum—it will have further inflationary effects. In the middle of a cost of living crisis, it is therefore vital that we get this right.
Lord Benyon (Con)
I thank noble Lords for their valuable contributions to the debate. I turn first to that from my noble friend Lady McIntosh regarding her concerns about offsetting for widely recyclable, single-use materials that a producer collects for recycling. The packaging extended producer responsibility scheme will not allow for this material to be used to offset disposal costs, because it could risk duplicating existing collection systems, which would reduce overall system efficiency. In doing so, this would shift costs on to other producers.
On my noble friend’s wider concerns about the packaging EPR, we have listened to feedback from the industry very carefully and have amended our proposals following consultation. This has reduced the cost to businesses from an estimated £2.7 billion to £1.4 billion per annum. That addresses some of the wider concerns expressed about the impact this could have, and the last point made by the noble Baroness, Lady Anderson, about any inflationary effect, which I will address later.
We are committed to continuing to work closely with industry on the final design of the scheme and our delivery plans. Defra has set up a business readiness forum and a local authority forum in order to keep businesses, producers and local authorities up to date about changes. These groups have been meeting regularly since January this year.
The noble Baroness, Lady Bakewell, raised the issue of a de minimis. The collection and reporting of data by smaller producers is done to inform a review of whether the de minimis should be reduced in future years. She is absolutely right that this will need to be revisited by another statutory instrument next year as we see these systems bed in.
On the question raised by my noble friend Lady McIntosh about whether this is the right time and whether there should be a delay, I note that as part of the transition between the old and the new regulations, producers and compliance schemes may need to continue to comply with their 2023 obligations in respect of packaging placed on the UK market in 2022, which are determined by the 2007 regulations. It is planned that the data reporting regulations and the 2007 regulations will be revoked by the new Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2023, which are expected to come into force towards the end of this year. The regulators will keep producers informed about compliance requirements as part of the transition from the 2007 to the 2023 regulations.
I really do recognise the concerns about the timing of this, but it is vital that we do not delay the scheme. We are working on implementing the packaging extended producer responsibility from 2024. In doing so, we are continuing to engage with stakeholders to ensure that the burdens of transitioning to this new scheme are minimised.
Local authorities will be able to collect dry recyclable waste streams together in circumstances where it is not technically or economically practicable to collect the waste streams separately, or there is no significant environmental benefit to doing so. Shortly, we will publish the government response to our consultation of last year, which will also confirm any exemptions to separate collection whereby local authorities can co-mingle recyclable waste streams in all circumstances. It is important to set this scheme in relation to other factors.
On whether this impact will feed through to household bills, we have to recognise that there is a huge cost to the taxpayer in the environmental impact of not recycling. The only way we can encourage more recycling is to know precisely what companies are doing, how they are using it and therefore how we can incentivise them to change behaviour. Huge benefits have been achieved by companies that have addressed this in what they do and made a virtue of it. We want to support them in this.
An important point was raised by the noble Baroness, Lady Bakewell, regarding Wiltshire Farm Foods and apetito. As she says, they do wonderful work in providing food for sometimes vulnerable people, and they recycle their trays in a closed-loop system. Producers will not be permitted to off-set their fees where the packaging in question is collected for recycling by more than 75% of local authorities. The key reason for this is that we do not want to incentivise producers to start collecting their own household packaging for recycling where that packaging is widely collected by local authorities. We want significantly to increase kerbside recycling through consistency and extended producer responsibility, and to do so in the most efficient and effective way. Potentially competing arrangements are unlikely to achieve this.
We also want to encourage producers to move to reusable packaging and reduce single-use packaging where possible. That is why we have included an exemption to this rule for any packaging that is being used as part of a reuse system—for example, reusable glass milk bottles.
I will speak to my honourable friend Rebecca Pow to make sure that she follows up on her agreement to have a meeting with Wiltshire Farm Foods or apetito, or both. I am sure that that is in the process of happening and I will make sure that it does.
With those few words, I hope that I have addressed the concerns raised today. I am grateful that noble Lords have indicated their willingness to accept this instrument. It will make crucial changes to the Packaging Waste (Data Reporting) (England) Regulations 2023. These changes will ensure the proper functioning of the packaging recycling evidence scheme and that fair producer fees are set that reflect the true amount of packaging that arises as waste in the UK. These amendments will also clarify the definition of a brand owner, ensuring that producers have confidence in where their obligations lie.
Baroness McIntosh of Pickering (Con)
Before my noble friend sits down, may I just follow up? I am trying to understand what he said in response to the noble Baroness, Lady Bakewell of Hardington Mandeville. If it is a closed-loop system and the waste is not entering the general household collection system, surely, producers should be exempt and be allowed to have their own system. My noble friend seemed to answer the question by saying that if it is general household waste collection, they could not save more than 75%, but, if this is a closed-loop system, should they not be exempt?
My noble friend referred to the EPR regulations which will come into force later this year. Will we be given a similar chance to discuss them, in a similar forum?
Lord Benyon (Con)
On the latter point, I can certainly assure my noble friend that there will be plenty of opportunity to discuss them.
Producers will not be permitted to off-set their fees where the packaging in question is collected for recycling by more than 75% of local authorities. That assesses the type of packaging we are talking about and how it impacts local authorities. Where there is a closed-loop system, we think that is the right measure to take. The key reason for this is that we do not want to incentivise producers to start collecting their own household packaging for recycling where that packaging is largely collected by local authorities. We want significantly to increase the amount of consistent kerbside collections we are conducting and thereby create economies for these products where possible. It is really important that the case raised by the noble Baroness, Lady Bakewell, be brought to the attention of my ministerial colleague and officials so that we can talk through its impacts.