The UK has approved amendments to its packaging rules that start on 1 January 2026, tightening Extended Producer Responsibility (EPR) and clarifying how brands can cut bills by designing for reuse and high‑quality recycling. The statutory instrument updates the 2024 regime across all four nations, following consent from devolved governments. It aligns with the UK‑wide Deposit Return Scheme (DRS) now slated for October 2027.

Closed‑loop recycling is now formally recognised in EPR. To qualify for an offset, the packaging must be food‑grade plastic collected back directly from your customers by you (or on your behalf), kept separate, and recycled by a single accredited reprocessor into food‑grade material. You must hold evidence from that reprocessor and pay an additional annual charge of £2,548 to report closed‑loop tonnages.

Why this matters for budgets: PackUK’s 2025/26 base fee for plastic is £423 per tonne, so verified closed‑loop tonnes reduce the household packaging fee you’re invoiced for. From 2026/27, fees will be modulated using a recyclability rating, meaning better design and cleaner material flows lead to lower charges over time.

Material categories are clearer for fibre‑based packs. Paper or board that contains plastic layers can still be reported as paper/board if the plastic is no more than 5% by mass and you can prove it; otherwise it sits in the fibre‑based composite category. This steers design teams to minimise laminates and document layer weights.

Double charging is avoided where DRS applies. Packaging that is-or would be but for a low‑volume exemption-a DRS deposit item is treated as exempt under EPR. With a UK‑wide DRS due in October 2027 and a Deposit Management Organisation already appointed, drinks producers should map SKUs to DRS scope now and adjust EPR reporting accordingly.

Charities are no longer outside the system entirely. Charitable producers are exempt from producer obligations and annual disposal/administration fees, but charity reprocessors and exporters must register by 1 January 2027; enforcement dates reflect that transition. Plan governance and data systems early if a charity runs reprocessing operations.

Mergers and brand transfers come with precise responsibilities. After a merger, the new corporate body inherits ongoing data and recycling obligations and may use PRNs/PERNs previously held by the merged entities. When brands or businesses change hands, the buyer must notify the regulator within 28 days, may be treated as a large producer for up to two years depending on thresholds, and must resubmit data so recycling obligations follow the brand.

Record‑keeping is strengthened. Producers must retain packaging data and evidence for seven years, and it’s an offence to report closed‑loop tonnages without paying the additional charge. A new late‑assessment power allows PackUK to bill producers discovered after the event, with interest where non‑compliance caused the delay.

Fee signals are becoming sharper. Beyond recyclability, EPR fees can be modulated where the amount of packaging is more than reasonably necessary for its purpose-rewarding right‑weighting and penalising excess. PackUK has also published a Recyclability Assessment Methodology and will begin modulation from 2026/27, giving brands a clear design brief.

Capacity is catching up with policy. Veolia is building a UK plant to recycle PET trays back into food‑grade material by early 2026, and new WRAP guidance is accelerating safe food‑grade recycling of polyolefins such as PP and PE. These investments expand the pool of genuinely circular, food‑contact plastics that can count under the closed‑loop route.

For outcomes, the bar is high. England’s household recycling rate was 44.0% in 2023, with Wales above 57% and Scotland just over 42%. EPR funding, fee modulation, simpler collections and DRS should work together to push rates up while improving material quality-especially for food‑grade plastics where contamination control is critical.

What to do now: confirm whether any of your food‑grade packs can meet closed‑loop conditions, line up a single accredited reprocessor, and budget for the £2,548 reporting charge if you plan to offset 2024–26 tonnages. Audit composite packs against the 5% plastic rule, model 2026/27 modulated fees, and map drinks lines to DRS scope ahead of the 2027 launch. These steps cut risk and, done well, lower costs and carbon.