The Metal Packaging Manufacturers Association (MPMA) has criticised the UK’s packaging extended producer responsibility (pEPR) scheme after PackUK warned that producer bills may need to be reissued to address a funding shortfall for local authority recycling.

Jason Galley, director and chief executive of MPMA, said the latest development was another sign that the new system is struggling to deliver stability for businesses.

He said:“Those following the pEPR scheme over the past year will no doubt be scratching their heads at how much the new system has been plagued with problems. These are not just inconsequential, minor teething or administrative glitches but instead issues that are having real, immediate impacts on businesses across the country affecting costs, cashflow and budgeting.

“This week saw one of those issues rear its ugly head – the potential shortfall in the collection of pEPR fees following a high number of appeals, demonstrating the confusion among Producers around what the fees should be.

“More worrying is that issues with rising costs are hardwired within the pEPR system. This could fairly be described as a hospital pass for the incoming PackUK team back this time last year.

“Since the publishing of the first base fees in August 2024, the Metal Packaging Manufacturers Association has consistently highlighted the pEPR system will push brands towards higher volumes of packaging that recycle at lower rates and are more costly to process as a result.

“Even before the under-funding of the scheme was announced this week, we were expecting rising costs, year on year. Now it seems there will be even higher fees to be borne to make up the collection shortfall. Where will it end?

“What businesses need is certainty. From certainty flows the ability to rely on payback calculations for new investments, new hires and growth. A pEPR system that keeps throwing up uncertainty is unhelpful to say the least.

“What the Circular Economy needs is packaging materials that can be used over and over again through multiple recycling turns.

“The good news is that, as with most problems, there is a solution. The pEPR fees simply need to reflect the true net cost of processing and recycling the different packaging types and materials and reflect their true value to the Circular Economy. This includes recognising the Permanent Material status of aluminium and steel, materials that can be recycled repeatedly through a well-established, standardised infrastructure without any loss of quality.

“It’s clear that the current fees do not do this. As a result, the system is skewing the market towards packaging materials that are more expensive for local authorities to recycle.

“In any business, getting your pricing wrong can be catastrophic yet this is exactly the situation that has been unintentionally created. If uncorrected, the consequences will be costly for UK plc.”