Navigating environmental legislation for waste products is time consuming. For online retailers operating across numerous countries, the issue is even more complex.
Online shopping has taken the UK by storm. According to Retail Economics, online retail grew by 45 per cent in 2020, making up 28 per cent of our retail economy. And with brands and new apps working to make virtual shopping more appealing, we’re unlikely to see the trend falter any time soon.
While it opens up new markets overseas, this opportunity also brings a responsibility for online retailers to comply with environmental legislation. As well as laws governing chemicals and pollution, many regulations cover the impact of products or packaging at the end of their lives.
The EU and UK stand on the brink of huge change to legislation for waste packaging, batteries and electrical goods, and many countries globally are following suit. Regulations apply to many retailers trading in a country, even if their head office is based elsewhere.
Packaging waste – UK
Since the introduction of the Packaging Regulations in 1997, businesses across the packaging supply chain have been required to help the UK meet national targets, by providing support to recyclers. From 2024, newly-installed Extended Producer Responsibility (EPR) rules will make a single ‘producer’ responsible for the full cost of managing packaging waste – all the way from collections to recycling. As a result, annual contributions from industry will rise from £230 million to £2.7 billion.
The government’s underlying aim is to stimulate the circular economy for packaging, using a variety of measures to increase recycling, while driving demand for recycled materials.
The results of the final consultation are expected in 2022. At that stage, we should gain clarity on details such as how incentives will be applied, and whether the system will include a de minimus, or threshold, under which some companies will be exempt.
Next year also brings the introduction of the UK’s Plastic Packaging Tax, which will tax producers at £200 per tonne for packaging which does not include at least 30 per cent recycled material.
EPR – International
The EU has also made a commitment to reforming its producer responsibility requirements for packaging waste, but each of its member states are expected to be free to introduce their own reporting systems and reporting metrics.
Variations are already common. In France, companies which place more than 500,000 consumer sales units onto the market are required to input the composition of each product, including individual plastic polymers, unlike the UK and Germany, where we submit total tonnages for materials.
In Belgium, retailers must comply with the legislation as soon as they place 300kg of packaging on the market, while in the Netherlands – and the UK – retailers are not obligated until they reach 50 tonnes.
Moving forward, we can expect EPR to be introduced for other products. France has already extended EPR to textiles and furniture, and others look set to follow. Clothing is classified by size – such as ‘small textiles’ like socks and underwear – and fashion retailers pay a fee based on the number of items they place on the market.
Plastic Packaging Levy – EU
From January 2021, all EU member states are liable for a tax of €800 per tonne on non-recycled plastic packaging. In order to improve recycling, we can expect greater scrutiny of recyclability and actions from individual countries. Spain, for example, is introducing targets to reduce the consumption of single-use plastics and plans add a surcharge to some items to discourage their use.
Take-back of electrical goods
Under the UK Waste Electrical and Electronic Equipment Regulations (WEEE), many sellers are required to provide take-back for waste electricals. From 2022, only online retailers and the smallest brick-and-mortar stores are likely to be able to sign up to the Distributor Take-back Scheme (DTS) to avoid having to accept returned items, instead funding council recycling sites’ collection facilities.
Entering the new year, all eyes will turn to the recast of the WEEE regulations, proposals for which are expected to come to the fore as part of a public consultation period shortly after the holiday period.
In our role managing submissions and data for both UK and international compliance, Valpak sees many companies that are not aware of their obligations. As well as reputational damage, penalties under EPR can be as high as €50,000 for each infraction.
How do I ensure my company is acting within the law?
The first port of call is to find compliance schemes in the country where you plan to trade, then register, and establish the areas in which you are obligated. The frequency of submissions will vary from country to country, as will the format and level of detail required for the form.
Horizon scans schedule in checks for new legislation. For example, we may complete scans for countries such as Singapore and Vietnam as our members look to expand into Asia, and we regularly monitor the situation in Europe for changes.
How should I prepare?
While the detail and legislation varies between countries, each shares a requirement for data. Preparing now by providing more granular data that logs polymer types and individual packaging components, for example, will stand businesses in good stead.
Environmental legislation for waste products and packaging encompasses many areas, but the trend is clearly moving towards greater levels of producer responsibility, and incentives to encourage more sustainable design.
As regulations continue to move with the times, research and preparation will be key. Providing a deeper level of data means online retailers will not only comply in the countries they trade but, just as importantly, be able to evidence that compliance.
To find out more about Valpak and the services they provide to the retail industry, click here.
This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.