The COVID-19 pandemic has caused immense businesses disruption in the UK and across the globe. Despite this disruption, plastics and packaging remains one of the top issues within public policy. As packaging consultations move forward for the Plastics Tax, Extended Producer Responsibility (EPR) and the Deposit Return Scheme (DRS), businesses cannot sit back and view these as obstacles to overcome in the future.
The challenges that accompany the incoming regulation are relevant and critical today, therefore our panel discussion with Ian Wright, Chief Executive of the Food & Drink Federation and Sebastian Munden, Vice President and General Manager at Unilever was particularly timely. Following the success of our previous discussions on plastics, packaging and waste reform, we at Sancroft felt it important to continue this dialogue on the progression of the consultations and how organisations are responding to regulatory and stakeholder shifts.
From the discussion, four key themes emerged around how both business and government must work to create a regulatory landscape that is effective, efficient and fair while also moving towards a circular economy.
A HOLISTIC REGULATORY SYSTEM
First, was the need for a holistic approach across the regulatory landscape. Within this wider idea of a holistic system, two focus areas emerged.
The first is the need for a single, consistent list of materials that will be recycled across local authorities. Currently, every local authority chooses what materials are recycled in their area, creating considerable inconsistencies in what is recycled across the country. This can create difficulties for consumers – who may seek to recycle materials that are technically recyclable but not recyclable in their area – and businesses that are developing recyclable packaging.
The second called for a cohesive regulatory environment in which new regulations complement each other and the systems already in place. EPR will be the wider system holding businesses accountable for their packaging, therefore additional schemes – particularly the Plastics Tax – must complement and fit into this system. Similarly, the DRS should not undermine the successes of kerb side recycling. In order to meet recycling targets and move toward a circular economy for packaging, a holistic approach must be taken to promote consistency and efficiency.
INDUSTRY COLLABORATION
The packaging consultations to date have been dominated by the food and drink industry because of their specific challenges regarding food safety and the huge amounts of packaging they use. While they should maintain their strong voice in these discussions, as food safety and prices immensely affect the public, there is the risk that regulation will not account for other sectors facing their own specific challenges. For example, food grade materials are subject to strict legislation and it is prohibited to use recycled plastic in contact with food unless the recycling process has been authorised. Without a sufficient supply of food grade secondary raw materials, producers would not be able to meet the 30% threshold. There is a case therefore that food grade packaging should not be within the scope of the tax until sufficient supplies of food grade materials are available.
Packaging also plays a huge role in other sectors such as health and beauty, where some packaging is currently difficult to recycle due to mixed material use and use of non-detectable black plastics.
As such, recycling rates are typically lower in bathroom compared to the kitchen. These challenges must be voiced by industry leaders.
Considerations must also be given to various business models. This is particularly true for online versus physical retailers. COVID-19 brought about huge dependency on online shopping, possibly accelerating the societal shift toward online retailers that we were already seeing. The legislation must reflect this and be equitable. A collaborative process is essential to ensure regulation is fair and that businesses can set realistic targets, incentivising change.
IMPORTANCE OF EDUCATION
Education at the household level is needed to generate improved recycling behaviours among consumers with simplicity and accessibility at the heart. The panellists highlighted three areas where education will be particularly important.
The first is clarity on what materials can be recycled. This links back to an earlier point made on the need for a consistent list of recyclable materials across local authorities, as it is easier for consumers. The second area of education is bathroom recycling. Recycling rates in the bathroom are currently very low. Education programmes must show consumers how to properly recycle toiletries and beauty products to create behavioural change. The third area highlighted the growing confusion around the disposal of compostable packaging that is becoming more popular. This packaging often requires commercial composting rather than home composting creating confusion around how to dispose of it.
Without education focused on changing household behaviours, many of the efforts made by businesses to improve their packaging will not yield real improvements in recycling
A COMPETITIVE RECYCLING SYSTEM
There is sometimes the misconception that a single state-led recycling system would be more efficient than the pluralistic competitive system that is currently used in the UK. However, as the Germans discovered when they moved from a single system to one having competing compliance companies, the recycling costs fell sharply. This is because if prices in one compliance scheme get too high, people will simply go somewhere else. Recyclers are suppliers of raw materials as they supply recycled plastics to be used again in packaging. There must therefore be healthy competition and demand to incentivise recycling.
This discussion explored the progress of the packaging consultations and what still needs to be done, creating a set challenges and opportunities for business and government that will remain relevant as consultations continue. Businesses across all industries would be wise to engage in this process, rather than react once regulation is enforced. The four themes highlighted here are interconnected and will shape the future of the regulatory environment around packaging.
At Sancroft, our services are tailored to our clients’ needs. We support their business in navigating the incoming regulatory changes. This can be through helping create an engagement plan for the consultation and key stakeholders or developing a packaging strategy to ensure their business is ready for the increasing costs of plastics.
To find out more about the discussion or how plastics and packaging consultations and reform are set to affect your business please contact felix.gummer@sancroft.com.
