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From 2026, UK packaging EPR fees are being eco-modulated based on recyclability. If your business uses hard-to-recycle packaging formats, your costs are going up. Here is what to know and what to do.
If your business is registered under the UK's Extended Producer Responsibility for Packaging scheme, your fees are changing - and the change is significant enough to affect your cost modelling, your supplier relationships, and potentially your packaging decisions.
From 2026, packaging EPR fees are being eco-modulated. This means the amount you pay is no longer based purely on how much packaging you place on the market. It is also based on how recyclable that packaging is.
This guide explains how eco-modulation works, which packaging types are most affected, and what steps you can take now to reduce your exposure.
Eco-modulation is a mechanism that adjusts EPR fees based on the environmental properties of packaging - primarily its recyclability. The principle is straightforward: packaging that is difficult to recycle costs more to manage at end of life, so producers of that packaging should pay more. Packaging that is easily recyclable attracts lower fees.
The UK's packaging EPR scheme introduced eco-modulated fees from 2026 onwards, using the Recyclability Assessment Methodology (RAM) developed by WRAP and DEFRA. Under this system, packaging is assessed against recycling infrastructure and sorted into two bands:
Packaging in the "not recyclable" band will attract significantly higher fees than recyclable equivalents.
Eco-modulation was always part of the packaging EPR framework, but its financial impact was deferred while the scheme was establishing itself. From 2026, it is real and it is material.
The fee differential between recyclable and non-recyclable packaging is significant. Businesses using hard-to-recycle formats - black plastic trays, multilayer films, certain fibre-based composites, PVC packaging - will see their per-tonne costs increase relative to businesses using recyclable alternatives.
Under the Recyclability Assessment Methodology, packaging is assessed by material type and format. The packaging categories most likely to attract higher eco-modulated fees include:
Conversely, clear PET bottles, aluminium cans, glass bottles, and corrugated cardboard tend to perform well under the RAM criteria and attract lower fees.
There are three practical steps businesses should take in response to eco-modulation.
Work through the packaging you place on the UK market and assess each format against the Recyclability Assessment Methodology. WRAP publishes guidance on how to apply the RAM, and the DEFRA-appointed scheme administrator PackUK provides further detail on how fee modulation is being applied. Identify which of your packaging formats are likely to attract higher fees.
Once you know which packaging is affected, model the fee difference. The scale of the impact will depend on your packaging mix and volumes. Some businesses will see modest changes; others with large volumes of hard-to-recycle packaging could face materially higher costs.
If you have formats that are attracting high fees, the medium-term solution is redesign. Switching from black plastic to natural or clear alternatives, reducing or eliminating multilayer films, or moving to mono-material packaging can move you from the high-fee band to the low-fee band.
This takes time - packaging redesign involves development, testing, supply chain changes, and sometimes retailer or customer agreement. Starting now gives you a genuine runway before fee differentials compound.
Eco-modulation applies to businesses that are obligated under the UK packaging EPR scheme. You are obligated if your business has an annual turnover of £1 million or more, and you supply or import more than 25 tonnes of packaging per year into the UK market.
Both large and small producers are subject to eco-modulated fees, though the exact fee levels are set each year by the scheme administrator based on the data submitted by producers.
WERCS supports businesses across WEEE, battery, and packaging compliance. For packaging EPR members, we provide data submission support, fee reporting, and compliance guidance as the regulatory framework continues to evolve.
If you are not yet registered under packaging EPR, or if you are unsure how eco-modulation applies to your specific packaging mix, we can walk you through the assessment.
Get in touch with the WERCS team about packaging EPR compliance.
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