Who is obligated?

Businesses obligated under the regulations must exceed two threshold tests and carry out certain activities on packaging.

The two threshold tests are as follows:

Turnover more than £2 million? (last set of accounts company total turnover – including any subsidiaries if you are a group)
Handle more than 50 tonnes of packaging in the last calendar year (or group of companies that you own or are part of)?

The definition of ‘Packaging’ is anything made of any materials for the containment, protection, handling, delivery and presentation of goods from the producer to the user or consumer. Whilst in theory, packaging should be fairly easy to define, in practice, there are many areas where there will be a number of interpretations of what is obligated and who should take responsibility. The Agencies have formed a view on many of these grey areas that have now been published in an agreed positions and technical interpretations document.

Both threshold tests must be satisfied if a business is to be obligated. The following questions then need to be answered:

What activities do you carry out on the packaging or packaging materials?
Do you own the packaging or packaging materials?
Do you supply it to another stage in the chain, or the final user of the packaging?

The answers to these questions will help determine whether you are a ‘producer’ for the purposes of the regulations. Obligated producers have to recover and recycle specified tonnages of packaging waste each year and to certify that this recovery and recycling has been achieved.

If you are the final user of goods purchased from a UK supplier then you do not pick up an obligation on this packaging, as your supplier and businesses further up the chain will have done so.

If you hire out (service providers) for others to use, you are obligated for the packing /filling and selling obligation on this. Where you wrap or pack goods to send to another part of your business (it must be within the same legal entity, not within a group of companies) then this packaging should not be included as it is deemed to be internal supply.

Where you have received goods in packaging for which you are the final user, you may re-use that packaging for supply of other goods and this will not attract an obligation as it is classed re-used packaging. However, if you have directly imported the goods then you must ensure you have first of all picked up the importing obligation whether or not it is new or second-hand when it enters the country.

For UK obligated companies it is an offence not to discharge your obligations under the regulations. The penalties regime is a criminal one and cases may be heard in the high court. It is an offence to not register if you are an obligated producer and have met the threshold tests. It should be noted that the responsibility does not require that companies recover a proportion of the actual packaging they have handled but it simply means that companies have to own ‘proof of recovery’ in the form of PRNs.

There are now approximately 6,800 companies (a total of 10,000 businesses including subsidiaries) registered through the Environment Agency (for England and Wales), the Scottish Environmental Protection Agency and the Northern Ireland Environment Agency.