The UK Government will cover a funding shortfall in the first year of packaging for Extended Producer Responsibility (pEPR). This ensures Local Authorities receive the required funding, and liable producers will not face increased Local Authority (LA) Disposal Fees for the 2025 Compliance Year.
This follows recent uncertainty after PackUK identified a reduction in the overall reported tonnage had lowered the expected fee income originally forecasted.
How the Shortfall Arose
As obligated producers became more confident in the new reporting requirements and calculated more accurate data, many resubmitted their data in line with guidance which resulted in a reduction in household packaging tonnage.
As the resubmissions lowered total liable tonnage, this directly reduced the funding collected for LA Disposal Fees at the initial base rate, therefore reducing the overall forecasted funds.
Under normal circumstances, this would have triggered a recalculation of the base fee rates and the reissue of Notices of Liability (NoLs) to liable producers, potentially raising costs at a very late stage in the compliance period.
Government Intervention
To ensure the stability of EPR and avoid additional burden on producers, the Government has stepped in to close the funding gap as a one-time measure, ensuring the initial LA Disposal Fee rates remain unchanged. PackUK has confirmed that the tonnage-based base fees producers received in October 2025 will remain as is, protecting businesses from unexpected cost increases.
This intervention also secures the full funding committed to Local Authorities for 2025/26 waste collection and recycling services. This enables councils to proceed with planned service improvements to infrastructure.
Updated Notices for Resubmitted Data
Updated NoLs will be issued by the end of March 2026 to producers who resubmitted and had their 2024 packaging data approved by the regulator. These updated notices will reflect the initial base fee rates, thanks to the Government’s decision to cover the shortfall.
Impact on Producers
For most producers, the implications are straightforward:
- LA Disposal Base Fee rates for the 2025 Compliance Year remain unchanged.
- No action is required if the October 2025 NoL has already been paid or is under a payment plan.
- Producers who resubmitted their household data will receive updated NoLs by the end of March.
- Producers who submitted household data for the first time after the October NoLs were issued will also receive a NoL by the end of March.
Looking Ahead: What to Expect in Future Years
While the Government has stepped in for Year 1, Defra has been clear that this is very unlikely to occur again. From Year 2 onwards, similar funding gaps will likely result in recalculated invoices and higher fees for producers.
To reduce the risk of late-stage recalculations in future years, PackUK is taking measure to mitigate the risk by looking to tighten household data resubmission deadlines and improving guidance to support more accurate first-time reporting. These measures are expected to stabilise data inputs and reduce the need for such recalculations later in the compliance period.
As one of the UK’s largest compliance schemes, representing more than 1500 producers, we will continue to monitor the situation and work with PackUK, Defra and the regulators to ensure operational efficiency for all stakeholders.
Previous pEPR Stories:
'PackUK Publishes RAM-integrated pEPR Indicative Fees for 2026 [20.12.25]'
'pEPR Amendments Move Forward After Commons Approval [18.12.25]'
