EPR Changes in the 2026 Budget: Impact on Packaging Businesses

Table of Contents

• Budget 2026 and Packaging EPR
• Plastic Packaging Tax Update
• EPR Fee Trajectory
• Business Impact Assessment
• What to Do Now
• Key Takeaways

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Key Takeaways

• The 2026 Budget confirmed the government’s commitment to EPR as a key tool for reaching net-zero and circular economy targets.
• The Plastic Packaging Tax rate was confirmed at £210.82 per tonne for plastic packaging with less than 30% recycled content.
• EPR fees are expected to continue rising as the scheme moves towards full cost recovery for local authority waste management.
• No new exemptions were introduced — the obligation thresholds remain unchanged at £1M turnover and 25 tonnes.
• Businesses should factor increasing EPR costs into medium-term financial planning.

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Budget 2026 and Packaging EPR

The UK’s 2026 Budget addressed several areas relevant to packaging businesses. While no dramatic changes to the EPR framework were announced, the Budget signalled a continued direction of travel towards higher producer responsibility and increasing environmental levies.

For EPR fundamentals, see what packaging EPR is.

Plastic Packaging Tax Update

The Plastic Packaging Tax rate for 2026 was confirmed at £210.82 per tonne. Key points:

• The 30% recycled content threshold remains unchanged
• The 10-tonne registration threshold continues to apply
• The rate may be subject to inflationary increases in future years
• HMRC continues to enforce recycled content evidence requirements

For businesses paying PPT, the message is clear: increasing recycled content to 30% remains the most effective way to eliminate this cost.

See EPR vs Plastic Packaging Tax differences for a full comparison.

EPR Fee Trajectory

While EPR fee rates are set by PackUK (not the Treasury), Budget signals affect the broader policy direction:

Confirmed Policy Direction

• Full cost recovery — EPR fees will eventually cover the full cost of packaging waste collection and recycling by local authorities
• Modulation expansion — fee differentials between recyclable and non-recyclable packaging will widen
• No new exemptions — the government is not planning to raise thresholds or introduce new exemptions

What This Means for Fees

• Annual fee increases of 5-15% should be expected as the scheme approaches full cost recovery
• Non-recyclable packaging will see above-average increases
• Recyclable packaging will see below-average increases
• The total cost envelope for packaging waste management will grow

For current rates, see the EPR fees by material type guide. For future expectations, see EPR fee changes 2027.

Business Impact Assessment

Short-Term (2026)

• Current EPR fee rates apply
• Plastic Packaging Tax continues at £210.82/t
• No changes to reporting requirements
• Businesses should focus on data accuracy and compliance

Medium-Term (2027-2028)

• EPR fees expected to increase
• Mandatory labelling from 2027
• Enhanced modulation likely
• DRS may become operational

Long-Term (2029+)

• Full cost recovery expected
• Significant fee differentials between recyclable and non-recyclable
• Potential new packaging materials brought into scope
• Circular economy targets driving higher recycling rates

Financial Planning

Budget Impact Model

Packaging Profile	2026 EPR Cost	Estimated 2027	Estimated 2028
100t recyclable plastic	£36,000	£39,000-£41,000	£42,000-£46,000
100t non-recyclable plastic	£44,000	£52,000-£57,000	£58,000-£66,000
100t corrugated card	£21,500	£23,000-£25,000	£24,000-£27,000
100t glass	£19,200	£20,500-£22,000	£21,500-£24,000

Note: These are illustrative projections based on policy direction, not confirmed rates.

The key takeaway: non-recyclable packaging costs are expected to grow faster than recyclable packaging costs, widening the financial incentive to switch materials.

What to Do Now

Immediate Actions

1. Review your current EPR costs using the EPR fee calculator
2. Check your Plastic Packaging Tax exposure — are you above or below 30% recycled content?
3. Ensure compliance with current requirements — do not wait for changes

Planning Actions

1. Model future costs using conservative fee increase assumptions
2. Identify packaging optimisation opportunities — see how to reduce EPR costs
3. Start mandatory labelling preparation for 2027 — see EPR mandatory labelling 2027
4. Increase recycled content in plastic packaging towards 30% threshold

Strategic Actions

1. Include EPR cost trends in business planning and product pricing
2. Invest in packaging redesign where ROI is positive
3. Engage with your supply chain on sustainable packaging alternatives
4. Monitor policy developments through DEFRA and PackUK announcements

Getting Started

1. Assess your current compliance position with the EPR compliance checklist
2. Calculate your costs under current and projected fee rates
3. Develop a packaging roadmap aligned with the policy direction
4. Budget for increases in your financial plans

Visit our pricing page for compliance tools and fee modelling.