EPR’s Traffic Light System Is Now Live, And It Will Cost You

If you supply, import or manufacture products that use packaging, 2026 has brought with it a bill that, for many businesses, has come as a genuine shock. Extended Producer Responsibility for packaging, known as pEPR, is not new in principle, but the scale of what it now costs in practice is catching a significant number of producers off guard. For many smaller manufacturers and wholesalers, it has quietly become the single largest producer compliance cost on their books, despite not existing at all just over a year ago.

This article explains why, and more importantly, what you can do to minimise your costs.

In its first year, pEPR charged producers a flat rate per tonne of packaging placed on the market. The fees varied by material but were straightforward to calculate. Plastic, for example, attracted a base fee of £423 per tonne, while glass sat at £192. Significant costs, certainly, but at least predictable ones.

From 2026, that simplicity has gone. Replaced with fees that are now calculated based on the technical recyclability of packaging rather than weight alone, using a red, amber and green rating system managed by PackUK, the scheme’s appointed administrator. Green-rated packaging, meaning materials that meet high UK recycling criteria, attracts a modest discount. Amber sits at the base rate. Red-rated packaging, covering materials considered difficult to recycle, faces a 20% surcharge above the base rate.

In practical terms for plastic packaging, illustrative fees published by the government put the range from £415 per tonne for green-rated material up to £545 per tonne for red-rated, with confirmed fees expected in June 2026. That is not an insignificant gap, and it widens further in future years. Red-rated material attracts a 1.2 times multiplier in 2026/27, rising to 2.0 times the base fee by 2028/29, meaning the cost of inaction compounds year on year.

From zero to their biggest compliance bill in twelve months. For many producers, that is the EPR reality of 2026.

Here is the part that is causing real problems in practice. Any packaging that has not been assessed under the Recyclability Assessment Methodology, known as RAM, defaults automatically to a red rating. This means that businesses which have not yet worked through their packaging classifications are not sitting in a neutral position waiting for clarity. They are already in the most expensive category by default, and will be paying accordingly.

From our conversations with customers across manufacturing and wholesale sectors, it is fair to say that awareness of RAM status among smaller producers is low. Many are guessing their classification, defaulting to red without realising it, or simply not knowing that an assessment is required at all. The bills, however, have arrived regardless, and for a significant number of businesses they represent an eye-watering new reality.

Businesses that have not assessed their packaging under RAM are not sitting in a neutral position. They are already in the most expensive category by default, and paying accordingly.

What is particularly interesting is how larger producers are responding, and the lessons it holds for everyone else. You might expect that, given plastic attracts higher fees per tonne than glass, businesses would be shifting toward glass packaging. The reality is often the opposite. Despite plastic carrying a higher fee rate, the actual weight of plastic packaging per unit is dramatically lower than the equivalent in glass, meaning the total fee liability per product can be lower even at the higher rate.

Larger corporates with procurement teams working through the numbers are already making packaging decisions based on this kind of analysis, treating RAM classification as a financial risk management exercise rather than a compliance box to tick. For smaller producers without that resource, the calculation is harder but no less important. And the consequences of getting it wrong are becoming more expensive with each passing year.

When deciding your packaging options, you not only need to consider the suitability of the packaging material, your customers’ preference and your cost for PRNs, but also the impact of RAM.

Despite plastic attracting higher fees per tonne than glass, many large producers are moving toward plastic. When the weight per unit is dramatically lower, the maths still works in plastic’s favour.

Perhaps the most striking illustration of where the current system needs refinement is an edge case that speaks to a broader tension in the regulations. Consider a producer who uses cardboard for virtually all of their packaging, with a minimal amount of plastic included only for consumer safety reasons. By any reasonable measure, this is responsible, sustainability-conscious packaging design.

However, because that plastic element falls below 4cm square, it is automatically classified as red under the current RAM methodology, regardless of its functional necessity or the otherwise excellent profile of the overall packaging. The producer is now faced with an uncomfortable choice: accept the red rating and pay the surcharge, or increase the amount of plastic in the packaging to meet the size threshold that would allow a more favourable classification.

The regulations, in this specific scenario, are creating a financial incentive to use more plastic, not less. This is exactly the kind of unintended consequence that regulators need to hear about, and it is a reasonable expectation that the RAM methodology will be refined as more of these edge cases come to light. PackUK has published a RAM roadmap through to 2030, so the methodology will evolve, but that is cold comfort for producers facing invoices today.

In one edge case, the regulations are creating a direct financial incentive for a producer to use more plastic, not less. That is not how this is supposed to work.

The cost trajectory under pEPR is clear inaction is expensive. Here is where to start:

• Check whether your packaging has been assessed under RAM, if not, you are being charged at the red rate by default
• Work through the RAM assessment for your packaging formats, or seek advice from your compliance scheme on how to do this
• Model the financial impact of alternative packaging materials; the relationship between material, weight and fee can produce counterintuitive results
• Factor RAM classification into new packaging design decisions from the outset rather than retrofitting compliance after the fact
• If you are a Wastecare Compliance packaging member, speak to your account manager about fee optimisation options