Table of Contents
- What Are Packaging Recycling Targets?
- Current UK Recycling Targets by Material
- How Recycling Targets Affect EPR Fees
- PRNs and PERNs: The Certificate System
- What Is Changing Under the Reformed EPR Scheme?
- Fee Modulation and the Recyclability Assessment
- Practical Steps for Obligated Producers
What Are Packaging Recycling Targets?
The UK government sets annual targets for how much packaging waste must be recycled or recovered, as set out in the packaging waste recycling obligations, expressed as percentages of the total packaging placed on the market. These targets drive the entire packaging EPR system — they determine how much funding is needed for collection and recycling infrastructure, which in turn determines the EPR fees obligated producers must pay.
The targets are set by material type, reflecting the different recycling rates achievable for each material. Glass and metals have relatively high recycling rates because the collection and reprocessing infrastructure is well established. Plastic recycling rates are lower due to the diversity of polymer types and the challenges of sorting contaminated materials.
Understanding these targets matters because they directly influence the fees you pay. Higher targets mean more investment in recycling infrastructure, which means higher fees per tonne for obligated producers.
Current UK Recycling Targets by Material
The UK has ambitious recycling targets that increase year on year. Here are the confirmed targets:
| Material | 2025 Target | 2026 Target | Current Recycling Rate (est.) |
|---|---|---|---|
| Paper and card | 83% | 84% | ~71% |
| Glass | 83% | 84% | ~74% |
| Aluminium | 61% | 63% | ~52% |
| Steel | 85% | 86% | ~80% |
| Plastic | 55% | 57% | ~44% |
| Wood | 35% | 37% | ~30% |
| Overall packaging | 73% | 74% | ~64% |
The gap between current recycling rates and the targets tells you where the most investment — and therefore the highest fee pressure — will be concentrated. Plastic has the largest gap, which partly explains why plastic attracts the highest per-tonne EPR fee rate at £423.
How Recycling Targets Affect EPR Fees
Under the reformed EPR scheme, fees are designed to cover the full net cost of managing packaging waste — collection, sorting, recycling, and disposal. When recycling targets increase:
- More packaging must be collected — requiring investment in kerbside collection and bring-bank infrastructure
- More sorting capacity is needed — materials recovery facilities must process greater volumes
- More recycling capacity is needed — reprocessors must expand to handle the additional tonnage
- Disposal costs remain for non-recyclable fractions — packaging that cannot be recycled must still be managed
All of these costs are funded through EPR fees. As targets rise, costs rise, and fees follow.
DEFRA reviews fee rates annually. The 2025-2026 rates are confirmed, but 2026-2027 rates will reflect updated cost assessments. Businesses should budget for fee increases in line with rising targets.
PRNs and PERNs: The Certificate System
Historically, UK packaging obligations were partially met through the Packaging Recovery Note (PRN) and Packaging Export Recovery Note (PERN) system:
- PRNs are certificates issued by UK-based accredited reprocessors confirming that a specific tonnage of packaging waste has been recycled
- PERNs are equivalent certificates for packaging waste exported from the UK for recycling overseas
Obligated producers purchased enough PRNs/PERNs to demonstrate they had met their share of the recycling targets for each material type. PRN prices fluctuated based on supply and demand — when recycling capacity was tight, prices spiked.
Under the reformed EPR scheme, the PRN/PERN system is being phased out and replaced with the centralised fee structure administered by PackUK, as described in the producer responsibility obligations guidance. However, understanding the legacy system is useful because:
- Some transitional arrangements may still reference PRN obligations
- Industry discussions about recycling capacity still use PRN/PERN terminology
- The market dynamics that drove PRN prices now influence EPR fee rates
What Is Changing Under the Reformed EPR Scheme?
The reformed scheme represents a fundamental shift in how packaging waste management is funded:
Before (Old System)
- Producers bought PRNs from a market-based system
- PRN prices were volatile and unpredictable
- Local authorities funded collection largely from council tax
- Producers paid a relatively small share of total packaging waste costs
After (Reformed EPR)
- Producers pay standardised fees per tonne to PackUK
- Fees are designed to cover the full net cost of managing packaging waste
- Local authorities receive funding from EPR fee revenue for collection services
- Fee modulation will reward producers using recyclable packaging
This shift means significantly higher costs for many producers. Under the old system, a producer might have spent £30-50 per tonne on PRNs. Under the new system, fees range from £192 to £461 per tonne — reflecting the true cost of managing packaging waste.
Fee Modulation and the Recyclability Assessment
From Year 2 (2026-2027) onwards, EPR fees will be modulated based on how recyclable each packaging format is. DEFRA’s Recyclability Assessment Methodology (RAM) evaluates packaging against several criteria:
- Collection — is the packaging type collected by local authorities?
- Sorting — can materials recovery facilities identify and sort it?
- Recycling — does reprocessing technology exist for this material?
- End markets — are there buyers for the recycled output?
Packaging that scores well across all criteria will receive lower fees. Packaging that fails on any criterion will attract higher charges.
This creates a direct financial incentive for producers to design packaging that is easier to recycle. The waste hierarchy principles — reduce, reuse, recycle — are now backed by economic pressure as well as regulatory requirements.
For a full explanation of how modulated fees will work, read our modulated fees guide.
Practical Steps for Obligated Producers
1. Understand Your Material Mix
Know exactly what materials your packaging uses. A business heavily reliant on hard-to-recycle materials will face disproportionately high fees when modulation takes effect. Use our platform to see your material breakdown at a glance. Our guide to what counts as packaging can help you identify items you may have overlooked.
2. Budget for Rising Fees
Recycling targets are increasing year on year, which means collection and processing costs will rise. Build EPR fee increases into your financial planning. Our fee calculator guide helps you model different scenarios.
3. Investigate Material Alternatives
Start evaluating whether you can switch to more recyclable packaging formats. Even if you cannot change everything immediately, having a transition plan positions you to benefit from lower modulated fees.
4. Engage with Your Supply Chain
Work with packaging suppliers to understand the recyclability of your current packaging. Ask for RAM assessment scores once available. Your suppliers should be able to advise on mono-material alternatives that meet your product protection requirements.
5. Report Accurately
Accurate reporting ensures you pay the correct fees — not more, not less. Our platform generates DEFRA-ready reports with the correct material classifications, weights, and categories, reducing the risk of errors that could trigger audits or enforcement action.
How Recycling Targets Are Set and Reviewed
Understanding how recycling targets are determined helps businesses anticipate future changes and plan accordingly.
The Government’s Target-Setting Process
DEFRA sets UK packaging recycling targets through a statutory process that involves:
- Assessing current recycling performance — using data collected from local authorities, reprocessors, and exporters to establish baseline recycling rates for each material
- Modelling infrastructure capacity — evaluating whether the UK’s collection, sorting, and reprocessing infrastructure can support higher targets
- Consulting with industry — publishing consultations that allow producers, waste management companies, and other stakeholders to comment on proposed targets
- Publishing statutory instruments — targets are set in law through regulations laid before Parliament, as detailed in the producer responsibility obligations guidance
Targets are typically confirmed 12-18 months in advance, giving businesses time to plan. However, the direction of travel is always upward — recycling targets have increased consistently over the past decade and will continue to do so.
Why Targets Only Go Up
The UK government has committed to reaching a 65% recycling rate for municipal waste by 2035, aligned with commitments made under environmental legislation. Packaging targets are a key mechanism for achieving this. Businesses should assume that every material category will see target increases of 1-3 percentage points per year through to at least 2030.
This has direct cost implications. Each percentage point increase in the recycling target requires additional investment in collection and processing infrastructure, which is funded through the EPR fees paid by obligated producers.
Material-Specific Challenges and Opportunities
Each material faces different recycling challenges. Understanding these helps explain why certain materials cost more under EPR and where opportunities for fee reduction may arise.
Paper and Card
Paper and card packaging has relatively high recycling rates because the collection infrastructure is well established and consumer understanding is strong. Most UK households have paper/card recycling access. However, challenges remain with:
- Food-contaminated paper — pizza boxes, used paper plates, and grease-stained card are often rejected by reprocessors
- Paper with plastic coatings — windowed envelopes, waxed card, and laminated packaging cannot enter standard paper recycling streams
- Small paper items — items smaller than a credit card (such as small labels and stickers) fall through sorting equipment
Online sellers using standard corrugated cardboard for shipping benefit from paper’s strong recycling rates and the lowest fee rates (£196/tonne).
Plastic
Plastic is the most challenging material for the recycling system, which is reflected in its high fee rate (£423/tonne). Key issues include:
- Polymer diversity — there are dozens of plastic polymer types, and mixing them contaminates recycling streams
- Flexible films — pouches, sachets, and flexible wrapping are collected by fewer local authorities and are harder to sort
- Colour and additives — black plastic is invisible to NIR sorting, and certain pigments and additives reduce recyclability
- Composite plastics — multi-layer films with barrier layers (common in food packaging) cannot be recycled through standard processes
The gap between the recycling target (55-57%) and the current recycling rate (~44%) is the largest of any material, indicating significant investment is needed — and significant fee pressure will continue.
Glass
Glass benefits from being infinitely recyclable without quality loss. Collection rates are high, and strong end markets exist for glass cullet (crushed, recycled glass). However:
- Colour contamination — mixing green, brown, and clear glass reduces the value of recycled glass
- Ceramics and pyrex — these contaminants look like glass but have different melting points, causing quality issues in reprocessing
- Weight — glass is heavy, making collection and transport costly per unit
Despite these challenges, glass has the lowest EPR fee rate (£192/tonne), reflecting its strong recycling infrastructure.
Metals (Aluminium and Steel)
Metal packaging recycling benefits from magnetic and eddy-current separation technology, which can extract metals efficiently from mixed waste streams. Both aluminium and steel have high recycled material value and strong end markets. The primary challenge is contamination — food residue in steel cans and the small size of some aluminium items (such as foil lids and closures) which can pass through sorting equipment.
Importers of canned goods should note that both the can body (typically steel) and the lid (which may be aluminium) need to be reported separately by material type.
Tracking Your Contribution to Recycling Targets
While individual businesses do not have individual recycling targets, understanding your contribution to the national picture helps you engage proactively with EPR compliance.
Calculate Your Recycling Impact
For each material type in your packaging portfolio, consider:
| Question | Why It Matters |
|---|---|
| Is this material widely collected at kerbside? | Collection is the first step — if it is not collected, it cannot be recycled |
| Is this material easily sorted at MRFs? | Sorting failures mean the material goes to residual waste |
| Is this material recyclable into a secondary raw material? | True recyclability, not just theoretical recyclability |
| Are there end markets for the recycled output? | Without buyers, recycling is not economically viable |
If any of your packaging types fail these tests, they contribute to the gap between targets and actual recycling rates — and will be the first to attract higher modulated fees from 2026-2027.
Use Recycling Targets to Guide Packaging Decisions
When evaluating packaging changes, consider how your choices affect the UK’s ability to hit recycling targets. Switching from a hard-to-recycle material to an easily recycled one — for example, moving from a multi-layer pouch to a mono-material recyclable pouch — directly supports higher recycling rates and positions your business for lower fees under the waste hierarchy principles.
Check your obligation status with our free compliance checker, or explore our EPR glossary for definitions of terms like PRN, PERN, RAM, and fee modulation. View our pricing plans to find the right platform for your business, or explore sector-specific guidance on our packaging hub.
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