What Is Fee Modulation?

Fee modulation is the mechanism by which EPR fees are adjusted based on how easy or difficult each type of packaging is to recycle. Rather than charging a flat rate per tonne for each material, modulated fees create a sliding scale — easily recyclable packaging attracts lower fees, while hard-to-recycle packaging attracts higher fees.

The principle is straightforward: if your packaging is expensive and difficult for the waste management system to handle, you should pay more. If your packaging is easy to collect, sort, and recycle into valuable secondary raw materials, you should pay less.

Fee modulation is one of the most significant aspects of the reformed UK packaging EPR scheme. It transforms EPR from a simple waste disposal charge into a powerful financial incentive for sustainable packaging design.

Year 1 vs Year 2: What Changes?

Year 1 (2025-2026): Flat Base Rates

The first year of the reformed scheme uses flat base rates per tonne for each material type. These rates do not distinguish between easily recyclable and hard-to-recycle packaging within the same material category:

Material	Fee per Tonne
Glass	£192
Paper and card	£196
Steel	£259
Aluminium	£266
Wood	£280
Plastic	£423
Fibre-based composite	£461

Under these rates, a clear PET water bottle (widely collected and easily recycled) pays the same per-tonne fee as a multi-layer flexible crisp packet (rarely collected and extremely difficult to recycle). Both are classified as “plastic” and charged £423/tonne.

For a complete breakdown of current rates, see our EPR fees by material type guide.

Year 2 (2026-2027): Modulated Rates

From Year 2 onwards, fees will vary within each material category based on recyclability. A recyclable clear PET bottle might pay significantly less per tonne than a non-recyclable multi-layer sachet, even though both are plastic.

The exact modulated rates for 2026-2027 have not yet been confirmed by DEFRA, but the framework is clear: the more recyclable your packaging, the less you pay.

The Recyclability Assessment Methodology (RAM)

DEFRA’s Recyclability Assessment Methodology is the framework used to evaluate how recyclable each packaging format is. RAM assesses packaging against four key criteria:

1. Collectability

Is the packaging type collected from households or businesses? If local authority kerbside collections do not pick up the material, it fails the first test. Materials like standard cardboard and plastic bottles are widely collected. Flexible plastic films and composite packaging are collected by far fewer authorities.

2. Sortability

Can materials recovery facilities (MRFs) identify and sort the packaging? Near-infrared sorting technology can detect and separate most standard plastics and papers. However, certain materials cause problems — black plastic is invisible to NIR sorters, and very small items fall through sorting equipment.

3. Recyclability

Does reprocessing technology exist that can turn the sorted material back into a usable raw material? Mono-material packaging (made from a single material) is generally recyclable. Multi-material packaging (such as a plastic pouch with a metallic layer) is often unrecyclable because the layers cannot be separated.

4. End Markets

Are there viable commercial markets for the recycled output? Even if a material can be collected, sorted, and reprocessed, it only counts as recyclable if there are buyers for the recycled material. Strong end markets exist for recycled aluminium, glass cullet, and certain plastics. Markets for recycled flexible films and composites are limited.

Packaging that passes all four criteria is classified as recyclable and will attract lower modulated fees. Packaging that fails on any criterion is classified as not recyclable and will attract higher fees.

Packaging Likely to See Higher Fees

Based on DEFRA’s RAM framework, these packaging formats are expected to attract higher modulated fees:

Black Plastic Trays and Containers

Black plastic cannot be detected by the near-infrared sorting technology used in most UK materials recovery facilities. Despite being technically recyclable, it fails the sortability test and is typically sent to landfill or incineration.

Multi-Layer Flexible Films

Crisp packets, coffee pouches, and pet food sachets made from multiple layers of different materials (often a combination of plastic, aluminium, and adhesives) cannot be separated for recycling. They fail the recyclability test.

Fibre-Based Composites

Tetrapak-style cartons and paper cups with plastic or wax linings are only recyclable at specialist facilities. Collection rates are low and sorting is complex. These already have the highest base fee at £461/tonne and are likely to see further increases.

Multi-Material Packaging With Non-Separable Components

A plastic container with a metal crimp, or a paper sachet with a plastic window, cannot be easily separated by consumers or sorting equipment. If the consumer cannot separate the materials, it effectively fails the sortability test.

PVC Packaging

PVC is technically recyclable but contaminates other plastic recycling streams. It is rarely collected and has limited end markets, making it likely to attract high modulated fees.

Packaging Likely to See Lower Fees

These packaging formats should benefit from lower modulated fees:

Clear PET Bottles and Trays

Clear PET is one of the most widely collected, easily sorted, and readily recycled plastics. Strong end markets exist for recycled PET (rPET). Clear PET bottles are likely to attract the lowest modulated fees within the plastic category.

Standard Corrugated Cardboard

Corrugated cardboard is widely collected, easily sorted, and has strong recycling rates and established end markets. It should attract the lowest fees within the paper/card category.

Glass Bottles and Jars

Glass is infinitely recyclable, widely collected, and has strong end markets for glass cullet. Glass already has the lowest base fee and should maintain a favourable position under modulation.

Aluminium and Steel Cans

Metal cans are widely collected, easily sorted (using magnets for steel and eddy current separators for aluminium), and have strong recycling rates and end markets. They should attract lower modulated fees within their respective categories.

Mono-Material Paper Packaging

Uncoated, unlaminated paper packaging (such as paper bags and paper wrapping) is easily recyclable and should attract lower fees than paper/card packaging with plastic coatings or windows.

How Modulation Creates Financial Incentives

Fee modulation creates a direct link between packaging design decisions and EPR costs. This has practical implications:

Design for Recyclability

Choosing packaging that is easy to recycle directly reduces your EPR fees. A beauty brand switching from a multi-material pump bottle to a mono-material refillable system could see meaningful fee reductions.

Material Substitution

Switching from a high-fee material to a lower-fee alternative where product protection allows can reduce costs. An e-commerce business switching from plastic poly mailers to paper mailers benefits both from lower per-tonne rates and potentially lower modulated fees.

Reduce Unnecessary Packaging

Eliminating packaging layers that add no functional value (such as double-boxing or excessive void fill) reduces both your total tonnage and your exposure to modulated fees.

Supply Chain Engagement

Packaging modulation gives you financial reasons to work with suppliers on packaging redesign. Sharing the RAM criteria with your packaging suppliers helps them understand what your business needs.

Preparing Your Business for Fee Modulation

1. Audit Your Current Packaging Against RAM Criteria

For each packaging type, assess whether it would likely pass the four RAM tests (collectability, sortability, recyclability, end markets). Our platform can help you flag packaging types that are likely to attract higher modulated fees.

2. Identify Quick Wins

Some packaging swaps are easy and have immediate impact. Switching from black to clear plastic trays, removing unnecessary cellophane wrapping, or replacing plastic windows in card packaging with open windows are all relatively simple changes.

3. Plan Longer-Term Transitions

More significant packaging changes (such as reformulating product packaging or switching to refillable systems) take time. Start the transition planning now so you are ready when modulated fees take effect.

4. Track Your Progress

As you make packaging changes, update your EPR data to reflect the new materials and formats. Our platform tracks your packaging portfolio over time, so you can see the cost impact of each change.

5. Stay Informed

DEFRA will publish the confirmed modulated fee rates before they take effect. Follow our blog for updates, or explore the EPR glossary for definitions of terms like RAM, fee modulation, and recyclability.

Use our free compliance checker to confirm your obligation status, or review our pricing plans to find the right platform tier for your business.

Start your free trial and get ahead of fee modulation before it takes effect.

EPR Modulated Fees Explained: How Recyclability Affects Your Costs

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