Packaging producers will not face reissued invoices or higher fees in Year 1 of Extended Producer Responsibility for packaging (pEPR), after the UK government agreed to cover a funding shortfall that threatened to force a recalculation of per-tonne charges.
The confirmation from PackUK ends weeks of uncertainty for obligated businesses after an emergency industry call in early February revealed that a high volume of data resubmissions had left the scheme short of the funding needed to meet its commitments to local authorities. PackUK had warned producers that it might need to reissue Notices of Liability with higher per-tonne fees to close the gap, prompting concern across the supply chain from businesses that had already budgeted against their original October 2025 invoices.
The shortfall arose because producers submitting revised packaging data reported lower total tonnages than originally declared. Under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, fees are calculated by dividing the total cost of efficient household waste management by the total tonnage of packaging placed on the UK market. A reduction in reported tonnage therefore reduces the overall fee revenue, creating a funding gap. The shortfall is reported to amount to tens of millions of pounts, though neither PackUK nor Defra has confirmed the precise figure.
A Defra spokesperson said the government recognises the pressures businesses are facing, confirming the move as a one-time intervention to help mitigate increasing costs for producers and maintain stability during the scheme's first year. Producers who resubmitted packaging data will receive updated Notices of Liability reflecting their revised tonnages by the end of March, but these will not incur additional costs.
The government has indicated that the exceptional treatment will not extend beyond Year 1. Going forward, similar shortfalls would likely result in invoices being reissued to producers under the existing regulatory framework.
In July 2025, PackUK issued Notices of Assessment to local authorities confirming their payment levels. Many councils have already committed this funding to collection services and infrastructure. The intervention ensures that local authorities across the UK will receive the full £1.4 billion committed under pEPR for the 2025/26 financial year.
Data stability measures for future years
PackUK described Year 1 as a transition period, acknowledging that the volume of data corrections reflected the complexity of a new reporting system. The scheme administrator said it is taking steps to reduce the likelihood of similar shortfalls, including bringing forward the deadline for producer data submissions and using updated Year 1 data to refine guidance and fee calculations.
When the prospect of reissued invoices was first raised, Robbie Staniforth, Chief Policy and Impact Officer at compliance scheme Ecosurety, commented: “We are pleased to see that the Government has taken the unprecedented step of covering this shortfall. Packaging producers have been trying to budget for these new costs for a number of years and were extremely concerned that they might increase further at the 11th hour. This intervention shows that the Government are supporting both UK businesses and local authorities to ensure these transitional issues are addressed.”"
The Metal Packaging Manufacturers Association (MPMA) called for greater certainty for businesses, with Director General Jason Galley describing the shortfall as one of a series of issues affecting the scheme since its launch.
From April 2026, pEPR moves into its second year, when fees will be modulated based on packaging recyclability using the Recyclability Assessment Methodology. Packaging rated as more difficult to recycle will attract higher fees, while more recyclable formats will receive a discount.
Get our weekly digest
resource.co article ai
How will the government and DMOs address the challenges of including glass in DRS while ensuring a level playing field across the UK?
There's no easy solution to include glass in the DRS while maintaining a level playing field. Potential approaches include a phased introduction of glass, potentially with higher deposits to reflect its logistical challenges. The government and DMOs could incentivise innovation in glass packaging design and subsidise dedicated return points for glass-handling. Exemptions for smaller businesses unable to handle glass might also be necessary. Any successful solution will likely blend several approaches. It must address the differing priorities of devolved administrations, balance environmental benefits with logistical and cost implications, and be supported by robust consumer education campaigns emphasizing the importance of glass recycling.