Guidance Notes on The Producer Responsibility Obligation (Packaging Waste) (Amendment) Regulations 2008

Content

Introduction to Producer Responsibility Obligations (Packaging Waste) Regulations 2007
What has to be counted?
What is obligated packaging?
Accuracy
Responsibilities
Other activities
Proof of Recovery
Special Producers
COMPLETING THE PACKAGING FLOW DATA FORM
Packaging flow tables - explanation of what to fill in for each box
Calculating targets
Other Points
Summary
APPENDIX 1 - Worked example
APPENDIX 2 - Environment Agencies' Interpretation of Packaging

Introduction

Under The Producer Responsibility Obligation (Packaging Waste) (Amendment) Regulations 2008, an obligated company is a company or group of companies who performs an 'activity' ( see 'Responsibilities') and meets both of the following thresholds:

• in the previous calendar year, handled over 50 tonnes of packaging around products that it supplied (and/or consumed if imported); and
• in the most recent audited accounts, exceeded a £2m turnover.

The aims of the regulations are to ensure that producers of packaging and packaging materials reduce the amount of packaging waste produced and to achieve a more sustainable approach to dealing with packaging waste.

All obligated companies are required to register with either:

• the Environment Agency/Scottish Environmental Protection Agency/ Environment & Heritage Service (Northern Ireland); or
• a registered Compliance Scheme.

A compliance scheme takes on your legal obligation in meeting your recycling and recovery obligation. However, you are legally responsible for providing the scheme with your data.

Companies not registering with a scheme have a number of responsibilities to meet and should seek advice to ensure all their obligations are met.

Registration in either option requires the submission of packaging data calculated from the previous calendar year's activities, e.g. for registration in 2008, it is based on 1 Jan - 31 Dec 2007. Registration with the Agency is required by 7 April. The data put forward in that registration forms the basis for calculating the recovery and recycling targets for that calendar year, e.g. data submitted in April 2008 based on the calendar year 2007 will give the targets to be met by the end of 2008.

What has to be counted?

To qualify, packaging you handle has to meet the following criteria:

• it has to be owned by you; and
• it has to be passed on to someone who carries out the next activity in the packaging chain or to the person who throws it away (see 'Responsibilities' over the page); and/or
• it has been imported by you.

What is obligated packaging?

Logically, it is anything that is used in the transportation, handling or protection of products. Six types of material are covered - paper, plastic, steel, aluminium, glass and wood. There is also a category of 'other' that includes things such as hessian bags, rope, jute and ceramics.

Most packaging is obvious - bags, boxes, bottles (not forgetting the tops!), cans etc. Pallets and pallet wrap are also considered to be packaging as well. However, there are some exceptions allowed and some fairly grey areas.

Exceptions

• Long term storage (CD cases etc.)
• Packaging that is part of the product (e.g. tea bag)
• Packaging that is essential in the products use (e.g. toner cartridge)
• Large long term items (e.g. ISO containers, planes etc.)

Some of the greyer areas that are currently considered packaging include:

Coat hangers, biscuit tins, envelopes used for anything other than invoices, correspondence or advertising material, labels where they perform a presentation function, internal applicators (Tipp-Ex brushes etc.) and carrier bags.

Some grey areas that are currently not considered packaging include:

• Straws attached to drinks cartons, lollipop sticks, trolley cages, bin bags, carrier bags that are sold to customers, film cases

Essentially, a series of tests have to be applied to determine whether something should be considered. These are detailed in the Environment Agency's 'Interpretation of Packaging'. The EA's guidance applies a series of tests to determine whether something is obligated packaging (the current guidance is attached).

However, there will always be some types where agreement will not be reached on whether it qualifies as packaging or not. In these cases the Environment Agency will first seek to clarify their interpretation, which may result in the publication of an 'Explanatory Note'. However, ultimately it will be down to the Environment Agency to contest in court and for a company to defend its reasons for its definition.

Accuracy

Since 1 January 2000 the accuracy of the data supplied is required to be 'as accurate as reasonably possible'. This means that the Agencies are looking for your data to be obtained by sampling and recording rather than from estimates and assumptions.

The Agencies believe that it is reasonably possible in the long-term for all packaging weights to be recorded and units supplied counted, Producers should be mindful of this goal and work towards it. It is expected that all obligated companies will achieve year-on year improvements in the completeness of their data.

Obligated companies will be expected to have in place auditable systems which link unit packaging weights to sales records and in the case of imported packaging for which they are the final user, purchase records. Data should increasingly be based upon a robust sampling regime, which may be supplemented by reliable data obtained from suppliers, however, any data from suppliers should be verified from time to time and be supported by a description of how it was obtained.

Some businesses with large product ranges or significant imports may not be able to account for every item. In this case extrapolations from other data may be acceptable - but they should always be justifiable. If you are uncertain, consult your compliance scheme or the Environment Agency.

All activities (e.g. importing, pack/filling and selling, etc.) must be accounted for. This is a fundamental requirement and any omission will not be accepted.

Groups must account for all obligated subsidiaries that are registered with the group. The Agencies will expect to be provided with, on request, disaggregated data for each subsidiary when monitoring.

Responsibilities

The 'SHARED RESPONSIBILITY' approach has been adopted to ensure that all companies who handle the packaging prior to its becoming waste take a proportion of the responsibility for its potential environmental impact.

There are four 'ACTIVITIES' in the packaging chain, each of which takes responsibility for a percentage of the packaging:

Together, these apply 100% responsibility to all packaging. A company has to perform at least one of these functions on packaging to be obligated.

• for a can of baked beans, the manufacturer of the steel takes a 6% responsibility for the weight of the can, the company that turns the steel into a can takes 9%, the company that puts the beans in the can takes 37% and the supermarket that sells the can takes 48%.
  
  
• for a box of copier paper, the manufacturer of the cardboard takes 6% responsibility for the weight of the cardboard box, the company that turns the cardboard into the box takes 9%, the company that puts the paper in the boxes takes 37%, the stationary company who sells the box of copier paper to a business takes 48%.

The responsibility does not demand that companies recover a proportion of the actual packaging they have handled. It simply means that companies have to own 'proof of recovery' of an equivalent proportion of their responsibility percentage(s) multiplied by the national recovery and recycling targets.

Therefore, a company who manufactures 'y' tonnes of cardboard in a given calendar year will have a responsibility to have proof of recovery of 'y' x 6% x the recovery target for that year.

A company can perform more than one activity on packaging, e.g. a company that places products inside packaging that their customer removes has both a PACKER FILLER AND SELLER RESPONSIBILITY for the packaging.

Other Activities

End User - 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.

Internal Supply - 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 can be discounted.

Second- hand or re-used packaging - 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 the obligation that packaging will have been picked up in its previous supply. However, if you have directly imported these goods then you must ensure you have first of all picked up the importing obligation.

Proof of Recovery - PRNs

To provide a recognisable, auditable trail of evidence of recovery the Environment Agency has developed a system of Packaging Recovery Notes (PRNs). These notes are issued by the reprocessor (the steel mill, glass smelter or waste to energy plant) and they can issue a PRN for every tonne of packaging waste they reprocess.

Obligated companies, or compliance schemes on their behalf, must obtain sufficient PRNs to meet their targets. These PRNs are traded and so have a market value - the cost of obtaining them is passed on by compliance schemes to their members. Packaging waste exported for recovery can be used to produce Packaging Waste Export Recovery Notes (PERNs). These have the same status as PRNs.

Weighbridge tickets from waste contractors showing a company has had waste collected for recycling are not accepted as evidence.

PRNs are issued relating specifically to the material that has been recycled - paper, glass, aluminium, steel, plastic and wood. Recovery processes like energy-from-waste are not material specific.

If you are currently recycling some of your waste, you will not be able to deduct this from your obligation. You would have to investigate whether this material has a value and if there is the possibility of obtaining PRNs. Remember PRNs can only be issued for the recovery of Packaging Waste.

Special Producer

The 'special producer' provisions will no longer apply from the 1st January 2004. Special waste packaging will be obligated in the same way as other packaging and must be entered in Table 1a.

The Data Form

The Data Form that you are required to complete in the submission of your packaging data to either a compliance scheme or the Agencies form part of the Regulations (Schedule 4). It is a requirement for all businesses registering to be able to complete the form and understand how the figures in the form relate to the packaging they handle as the Agencies will expect the data to be auditable.

THE DATA MUST BE REPORTED IN METRIC TONNES ONLY.

The Data Form comprises of six main data boxes, each relating to specific activity.

In addition, there are a number of further boxes.

EACH OF THESE TABLES RELATE TO ACTIVITIES PERFORMED BY YOUR COMPANY IN THE PREVIOUS CALENDAR YEAR TO THE YEAR FOR WHICH YOU ARE REGISTERING. THEREFORE, FOR 2008 REGISTRATION, THEY SHOULD INCLUDE ALL PACKAGING HANDLED FROM 1 JAN 2007 TO 31 DEC 2007.

See next page for an explanation of each of the boxes below.

Table 1: Packaging/Packaging Materials supplied (in tonnes)

Table 2a:(where applicable) Packaging/Packaging Materials exported by the producer (in tonnes)

Table 2b: (where applicable and if known) Packaging/Packaging Materials exported by a third party (in tonnes

Table 3a: (where applicable) Tonnage of Packaging/Packaging Materials imported for the purpose of the named activity (in tonnes)

Table 3b: Imported packaging for which you are the end user (in tonnes)

Table 3c: Imported packaging which is subsequently exported (in tonnes)

Table 4: Statement of obligations for 2005 (based on 2004 tonnages above)

Packaging Flow Tables

Explanation of what to fill in for each box under each material type

Do imports or exports go in Table 1?

Imports should only be entered into Table 1 if you perform an activity on it, such as 'selling' -but the packaging must stay in the UK (You would therefore enter the weights in both Table 3a and Table 1)
Exports should only be entered into Table1 if you sourced it in the UK, if you imported it and are now exporting it, then you should only put it in Table 3c.

Table 4 Statement of Obligations

Table 4 must be completed and shows the targets that will relate to the tonnage placed in Tables 1 - 3b.

The method to undertake the calculations is shown below, but Internet users can use the Online Obligation Calculator here

CALCULATING THE OBLIGATED TONNAGE FOR EACH MATERIAL
(including wood and other)

In each material column:

[ [( (i) - (v) - (ix) ) x 0.06] + [ ( (ii) - (vi) - (x) ) x 0.09)] + [( (iii) - (vii) - (xi) ) x 0.37]

+ [((iv) - (viii) - (xii) ) x 0.48]+ [(xiii) x 0.06] + [(xiv) x 0.15] + [(xv) x 0.52] + [(xvi) x 1] ]

The TOTAL obligated tonnage is the sum of the separate material obligated tonnages.

CALCULATING THE MINIMUM RECYCLING TARGET FOR EACH MATERIAL
(for Paper, Glass, Aluminium, Steel, Plastic and Wood only)

The Obligated Tonnage for each of the above materials should be multiplied by the relevant minimum recycling target:

For example, if the OBLIGATED tonnage for Glass was 100 tonnes after applying the calculations above, the Minimum Recycling Target for glass would be 100 x 78% = 78 tonnes.

CALCULATING THE TOTAL RECOVERY TARGET

The OBLIGATED tonnage for each material including other should be added together and the sum multiplied by the overall recovery target of 72%.

CALCULATING THE TOTAL RECYCLING TARGET

The Total Recovery Target should be multiplied by 92%.

(N.B. Because the Overall Recovery Target has been set at a higher level than the Paper Recycling Target, if your only obligated material is paper, you will end up with the Overall Recovery Target being lower than the Paper Minimum Recycling Target. In this case, your Paper Recycling Target would count as your Overall Recovery Target)

Other Points

• The tonnages included in the tables must only relate to packaging owned by the obligated company.
  
  
• Records must be kept relating to the basis of calculation for tonnages supplied for a minimum of 4 years, along with the data form that was finally submitted to the Agency.
  
  
• Composite packaging should be included under the category of packaging that forms the predominant material by weight.
  
  
• Companies should ensure that the data used in the calculation of packaging tonnages is robust and can withstand scrutiny by the relevant Agency through the necessary support documentation.

Summary

You have reached the end of our Guidance Notes. We hope you now have a greater understanding of what you need to do as an obligated business.

In case you missed anything, here are some main points again:

• The thresholds are 50 tonnes of packaging handled per year (in the previous calendar Year) and £2 million turnover.
  
  
• Your data should now be 'as accurate as reasonably possible' - you will need to justify any assumptions or extrapolations.
  
  
• From your data you can calculate the Targets you will need to meet in that year.
  
  
• Meeting the targets means obtaining PRNs or their equivalent.
  
  
• If you register with a compliance scheme the obligation to obtain PRNs passes to the scheme.
  
  
• You should keep all records for at least four years.
  
  
• The appropriate Agency aims to visit each producer once every three years.

APPENDIX 1

EXAMPLE OF POTENTIAL PACKAGING RESPONSIBILITIES

(Relating to diagram below)

Computer Chip Supplier

Will have no obligation as they are not a UK registered company.

Monitor Manufacturer

Will have:

• a pack/filler obligation (37%) on the primary packaging (plastic and cardboard) around the monitor; and
• a pack/filler and seller obligation (85%) on the transit packaging (pallets and shrink wrap).

UK Boxes Ltd

Will have:

• a convertor obligation (9%) for converting the cardboard into flat packed boxes; and
• a pack/filler and seller obligation (85%) on any transit packaging supplied, wood and plastic).

PC International

Will have:

• an importer obligation (100%) on the direct imports of computer chips from Japan (paper, plastic and wood), as they discard all the packaging they receive;
• a pack/filler and seller obligation (85%) on the primary packaging around the computers sold by mail order (paper and plastic); and
• a pack/filler obligation (37%) on the primary packaging around the computers sold to Staple World (paper and plastic);
• a seller obligation (48%) on the primary packaging around the monitors sold by mail order (paper and plastic);
• no obligation on the monitors supplied to Staple World;
• pack/filler and seller obligation (85%) on transit packaging (not wood as pallets are second hand) they use to supply the monitors and computers (paper and plastic). This will include the shrink-wrap to Staple World and any boxes used for direct mail order.

PC International will also need to enter any primary and transit packaging exported as a pack/filler and seller (paper, plastic). They should also inform the monitor supplier how many have been exported.

Staple World

Will have:

• a seller responsibility (48%) on the primary packaging around the computers and monitors (paper and plastic).

APPENDIX 2

INTRODUCTION

The EC Directive on Packaging and Packaging Waste, upon which the UK Regulations are based, only gives general guidance as to what is and is not to be regarded as packaging.

It is essential that a standard interpretation of the definition of 'packaging' exists within the UK so that the Agencies have a consistent basis for assessing obligations under the Regulations. The Agencies, in developing principles which apply the definition of packaging, must have regard to the common sense understanding of what is and is not packaging, the objective of sustainability and to the expressed purpose of the EC Directive which is to, "reduce the overall volume of packaging waste".

Included in this booklet is a summary of items where agreement on packaging status has been reached by Member States.

These notes set down the Agencies' views on how obligated producers (and Compliance Schemes) should assess the items of packaging and packaging materials for which they are responsible when compiling records and calculating recovery and recycling obligations.

This booklet replaces the first edition issued by the Environment Agency and the Scottish Environment Protection Agency (SEPA) in July 1997, reflecting both the constructive proposals from a number of packaging chain interests and the Agencies' practical experience of interpreting and enforcing the Regulations. It should be noted that it does not cover exemptions from the legislation, nor matters such as evidence, or calculation of obligations (which will depend on criteria such as ownership and the nature of supply).

Particular thanks are due to all those companies, trade associations and Compliance Schemes which responded to the consultation draft in April 1999.

THE EUROPEAN DIMENSION

There is a committee (The Article 21 Committee) which assists the European Commission in dealing with any difficulties encountered in applying the provisions of the Packaging Directive. All Member States are represented on the Committee, the UK by the Department of Trade and Industry.

One particularly helpful decision in early 1999 was to publish a list of items, the status of which is agreed by the Committee. The list (which is subject to change) is intended to promote common understanding. Some illustrative examples from the document are set out below.

It is important to note that the above lists have no statutory force in the UK. Whether or not the above items are obligated packaging in the UK will depend upon whether they satisfy the other criteria for packaging given in the Regulations (e.g. ownership, nature of supply, etc).

INTERPRETATION TESTS

NOTES ON STEPS A TO F IN THE FLOW CHART

Step A - Identify the Sales Unit

The foundation of the interpretation tests is the sales unit (which comprises the product and its packaging); the purpose of Step A is to identify it. For example, the silver spoon, preserves, jars, caps, labels, plastic sleeve, and price label all comprise the sales unit of a presentation pack of preserves with serving spoon.

Step B - Remove the Product

The product (or products if grouped) is that which is to be used or consumed after purchase. In the example given in Step A, this would be the preserves and the spoon.

Some items are regarded by the Agencies as products in their own right (although the boxes, bags, etc they come in are packaging); examples include tea bags, pencils, fire extinguishers, 35mm film cassettes and toner cartridges.

Step C - Durable Packaging for Durable Products

It is considered that only durable products which cannot be used up (or consumed) may require durable packaging for long-term storage. An item which provides such long-term storage for a durable product is not regarded as obligated packaging by the Agencies.

The Article 21 Committee consider that a durable item is to be understood in a flexible way as an item that a majority of consumers use for longer than five years, and is intended for repeated use and not for disposal after the first use.

Preserves are consumable so no part of the sales unit for them can be for long-term storage. In contrast, power tools are durable products, so it is reasonable to consider their carrying cases as providing long-term storage. This also applies to durable carrying cases or moulded containers designed to last the lifetime of durable items such as spectacles, laptop computers, electric razors, cutlery, and cameras.

Step D - The 'Function Test'

Regulation 2 states that 'packaging' means, "all products made of any materials of any nature to be used for the containment, protection, handling, delivery and presentation of goods, from raw materials to processed goods….". The Agencies consider that a given item of packaging need not perform all of these functions, the performance of one such function is sufficient.

In the absence of any definitions of these specific functions in the Regulations, the Agencies consider that the ordinary dictionary meanings are appropriate, adapted as necessary to make sense in the context of the Regulations and the purpose of the Packaging Directive.

1. "Containment" is the act or process of restraining or enclosing e.g. drums and cans;
2. "Protection" means the defence from harm, e.g. bubble wrap;
3. "Handling" means facilitating movement, e.g. carpet cores;
4. "Delivery" is the conveyance of the product(s) to the final user or consumer; and
5. "Presentation" means to exhibit or display the product(s), which may include attracting attention to them e.g. a label, or a brightly coloured box containing an Easter egg.

Step E - The 'Purposes Test'

Regulation 2 goes on to set out a second test. For an item of a sales unit to be packaging, it must also be:

"(a) sales packaging or primary packaging, that is to say packaging conceived so as to constitute a sales unit to the final user or consumer at the point of purchase;
(b) grouped packaging or secondary packaging, that is to say packaging conceived so as to constitute at the point of purchase a grouping of a certain number of sales units whether the latter is sold as such to the final user or consumer or whether it serves only as a means to replenish the shelves at the point of sale; it can be removed from the product without affecting its characteristics;
(c) transport packaging or tertiary packaging, that is to say packaging conceived so as to facilitate handling and transport of a number of sales units or grouped packs in order to prevent physical handling and transport damage; for the purposes of these Regulations transport packaging does not include road, rail, ship and air containers1".

One important word found in the descriptions of primary secondary and tertiary packaging is "conceived". For an item to be primary, secondary or tertiary packaging it does not have to have been conceived as such at the manufacturer stage in the packaging chain, but at any stage. Once it passes both tests, it is deemed to have been packaging throughout the chain. This highlights the need for information to be passed between activities in the packaging chain.

Step F

All items which have reached this point in the flow diagram are considered to be packaging for the purposes of the Regulations.

INTERPRETATION -FLOW CHART
(To be used in conjunction with the explanatory text in this booklet)

QF/184/10