Defra is exploring offset provisions for closed-loop systems in packaging regulations

Following the consultation on the draft Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations, Defra is considering the inclusion of a provision to support closed-loop recycling systems based on feedback received during the legislative review. The government is contemplating a ‘narrow expansion’ to offsetting provisions, aiming to assist producers operating closed-loop systems aligned with the environmental goals of extended producer responsibility (EPR).

This potential amendment to the draft regulations would allow producers to offset household disposal fees obligations under specific conditions, such as when the material is not widely collected at kerbside or when packaging items are intended for reuse or refilling. To gather insights and input from businesses and other stakeholders, Defra has initiated a survey and is organising a stakeholder workshop on November 20 to delve into the details of closed-loop recycling. Closed-loop recycling involves producers collecting their own packaging waste and using recyclate to manufacture new products within the same category. While closed-loop recycling promotes resource efficiency and contributes to a circular economy, concerns have been raised that the upcoming EPR regulations might discourage investments in such systems, potentially subjecting companies to taxes despite their commitment to sustainable practices.