The Invoice Moment

In October 2025, thousands of UK businesses opened an envelope from PackUK and found something new: a Notice of Liability. The figure on the page depended on their packaging volumes, but let us take one number as our anchor. The base fee for plastic packaging: GBP 423 per tonne.

That invoice is real. You can read it on GOV.UK in the published 2025 base fees for PackUK. You can watch producers complain about it in Parliament. What you cannot do is see where it goes, trace what it changes, or find evidence that it has shifted a single purchasing decision at the checkout.

This piece follows one policy through its architecture. The question is not whether Extended Producer Responsibility costs are justified. The question is whether a scheme designed to be invisible to consumers can possibly produce the behaviour change it claims to pursue.

GBP 423

This is the Year 1 base fee for plastic packaging under the UK's Extended Producer Responsibility scheme. It appears on producer invoices alongside GBP 192 for glass, GBP 196 for paper and card, GBP 266 for aluminium, GBP 259 for steel.¹

Note the ordering. Glass, which achieves over 80% recycling rates under current systems, is charged GBP 192 per tonne. Plastic, which manages 53.7%, is charged GBP 423.² The fee structure, assessed by weight, inverts the recyclability hierarchy. Heavy materials with strong infrastructure pay more. Light materials with weak infrastructure pay relatively less per unit of environmental damage.

Stay with me. The fee schedule is not the reveal. The reveal is what happens next.

A craft brewery in Wales named Gower Brewery uses approximately half a million glass bottles annually. Since EPR invoices began, its supplier has added GBP 5,000 per delivery — roughly GBP 45,000 in additional annual costs. The brewery chose glass because glass is infinitely recyclable. It is now penalised for that choice.³

Belvoir Farm, a drinks producer that uses glass bottles for the same reason, warns the costs "could potentially wipe out all our profits" — nearly GBP 800,000 from a GBP 30 million turnover.⁴ Vidrala, which was considering a GBP 500 million investment in Encirc — the UK's largest glass container manufacturer — is now reassessing that investment entirely.⁵

The fee schedule is government policy. The consequences are not accidents. When you charge by weight, you tax recycled glass more heavily than virgin plastic film. When you tax recycled glass more heavily, glass investment stalls. When glass investment stalls, the modal packaging shifts toward materials with weaker recycling infrastructure.

Of course. Why wouldn't it?

80%

This is the pass-through rate. According to a British Retail Consortium survey of leading UK retailers, over 80% of EPR costs are likely to be passed onto customers.⁶

Andrew Opie, Director of Food and Sustainability at the BRC, put it plainly: "Retailers support the polluter pays principle and are making significant changes to reduce and improve their packaging. However... [EPR is] a multi-billion pound levy that will be paid by consumers during a cost-of-living crisis."⁷

The 80% figure is consistent with economic logic. Retailers have already absorbed approximately GBP 5 billion in employment cost increases — National Insurance, National Living Wage adjustments. Margins are compressed. Additional costs flow downstream.

Follow a single pound from that GBP 423-per-tonne invoice to your shopping basket.

The producer receives the Notice of Liability. It adds the fee to supplier invoices. The supplier adjusts wholesale prices. The retailer updates shelf prices across affected SKUs. The GBP 423 per tonne dilutes across thousands of product lines, arriving as fractions of pennies distributed invisibly across the shop.

The Bank of England's Monetary Policy Committee estimated in August 2025 that the EPR scheme could add a little over 0.5% (to the level of food prices) if costs were fully passed through.⁸ Over 0.5%. Measurable to economists. Invisible to shoppers. No signal arrives at the checkout. No consumer knows they are paying for packaging waste management. No purchasing decision responds to the cost.

THE RECEIPT: WHERE GBP 1.4-1.5 BILLION IS EXPECTED TO GO (YEAR 1)

GBP 0

This is the amount ring-fenced for recycling infrastructure.

I will write that again. Zero pounds. Ring-fenced for recycling infrastructure.

The Local Government Association has explicitly rejected calls to ring-fence EPR funds. Councillor Arooj Shah, the LGA's Environment spokesperson, stated: "We reject the call to ring-fencing that says funds can only go on collections. That is, in practice, a call for industry control of council waste services."⁹

The industry position, to be fair, has a logic. The British Retail Consortium and Food and Drink Federation have called for ring-fencing precisely because they want to see funds directed toward recycling capacity. The LGA's counter-position also has logic: local authorities need flexibility to address local priorities, and prescriptive mandates constrain democratic decision-making.

But observe what the architecture produces. EPR funds flow from producers to PackUK, which distributes payments to local authorities to cover the net costs of managing household packaging waste. The money is intended to cover local authorities' household-packaging waste management costs, but it is not currently ring-fenced for new recycling infrastructure, and public tracing is limited. Councils face competing pressures: potholes, social care, school budgets. The funds enter a ledger where "recycling infrastructure investment" must compete with immediate visible needs.

Meanwhile, approximately 260,000 tonnes of UK plastic recycling capacity has been lost over the 18 months through January 2025.¹⁰ Plastics Recyclers Europe reported that 300,000 tonnes of mechanical recycling capacity closed across Europe in 2024 — half of that in the UK and the Netherlands alone.¹¹

The invoice funds collection. It does not fund transformation.

0.5%

This is the Bank of England's estimate of food price inflation attributable to EPR. A little over 0.5%, spread invisibly across the weekly shop.¹²

DEFRA disputes this figure. According to the government's 2024 Final Impact Assessment, the estimated impact on overall CPI is between 0.04% and 0.08%. A government spokesperson stated: "The estimated impact of the Extended Producer Responsibility for packaging on overall inflation is less than 0.1%."¹³ The precise number matters less than its character: whichever estimate you accept, the cost is real but imperceptible. A consumer cannot identify the EPR component of their grocery bill. They cannot respond to it. They cannot choose differently because of it.

This is where the scheme's architecture becomes legible.

If the purpose of Extended Producer Responsibility is revenue collection for waste services, the design succeeds. Money flows from producers to councils. The tax base is established.

If the purpose is behaviour change — shifting consumer and producer decisions toward more recyclable, lower-impact packaging — the design fails by its own internal logic.

Here is the evidence.

7x

In 2008, British Columbia introduced a carbon tax on gasoline. It was visible. Consumers saw it at the pump. The price per litre included a named, identified surcharge.

Economists Nicholas Rivers and Brandon Schaufele studied what happened next. Their 2015 paper in the Journal of Environmental Economics and Management provides the most precise measurement we have of what visibility does to behaviour change.

Rivers and Schaufele estimate a 5-cent market price rise cut gasoline demand by about 2.2%. By contrast, a $25/tCO2e carbon tax cut demand by about 12.5% — roughly seven times larger than the market-price response.¹⁴

Rivers and Schaufele calculated that British Columbia's carbon tax reduced CO2 emissions from gasoline consumption by more than 2.4 million tonnes during its first four years. Of that total, 74.5% — 1.8 million tonnes — was attributable to the additional salience of a visible tax compared to an equivalent invisible price increase.¹⁵

The finding is not merely suggestive. It is the first empirical investigation into the salience of environmental taxation. It demonstrates, with peer-reviewed rigour, that naming a cost changes how people respond to it.

The UK's EPR scheme is designed for the opposite. Costs pass through supply chains invisibly. They dilute across products. They arrive at retail as fractions of pennies impossible to attribute. The scheme is architecturally incapable of producing the salience effect that Rivers and Schaufele documented.

If visible costs produce roughly seven times the behaviour change of invisible ones, then the UK has chosen a design that surrenders the majority of its potential impact before the first invoice is issued.

One reading is that policymakers did not know the research. Another is that behaviour change was never the primary objective.

The Ledger

Let us map the incentive structure.

The Producer

If you are a producer, you receive an invoice. You can absorb the cost (reducing margins), redesign packaging (expensive, uncertain), or pass costs through to supply chains (standard business practice). You pass costs through.

The Retailer

If you are a retailer, you receive increased supplier prices during a cost-of-living crisis with compressed margins. You can absorb the cost (reducing profits), refuse the supplier (losing product lines), or raise shelf prices fractionally across thousands of SKUs (invisible to consumers). You raise shelf prices.

The Consumer

If you are a consumer, you pay slightly more for groceries. You do not know this is happening. You cannot identify which products carry the cost or compare alternatives on EPR burden. You notice nothing. You change nothing.

The Council

If you are a local authority, you receive EPR funds alongside demands for road repairs, social care, and school maintenance. You can ring-fence the funds for recycling infrastructure (facing political pressure from other priorities), or allocate flexibly (preserving council autonomy). You allocate flexibly.

The Manufacturer

If you are a glass manufacturer, you face higher per-tonne fees than lighter materials with worse recycling outcomes. You can invest in UK capacity (facing uncertain returns), or pause investment (preserving capital). Vidrala is reconsidering GBP 500 million.⁵

Each actor is behaving rationally. The producer is not greedy. The retailer is not negligent. The consumer is not apathetic. The council is not corrupt. The glass manufacturer is not abandoning sustainability.

Each is being obedient to the logic of the scheme.

And that is precisely the problem.

The Year 1 Defence

The defence is familiar: "This is transitional. Modulated fees arrive in 2026. Recyclability incentives will sharpen. Give the scheme time to embed." DEFRA projects GBP 10 billion in investment and 21,000 jobs.¹⁶

The defence deserves acknowledgment. Modulated fees — charging more for packaging rated less recyclable — will create producer-facing incentives that flat fees do not. RAM (Recyclability Assessment Methodology) categories will distinguish materials.

But observe what 2026 does not change.

Ring-fencing does not arrive in Year 2. Consumer visibility does not arrive in Year 2. The pass-through mechanism does not change. The 7x salience gap remains. Capacity continues contracting now, during the transitional period, while investment decisions stall.

The scheme will modulate B2B signals while leaving consumer signals at zero. Rivers and Schaufele did not study producer invoices. They studied consumer perception. The mechanism that produces roughly 7x behaviour change operates at the checkout, not the supply chain.

One could argue that producer-facing incentives are sufficient — that redesigned packaging will reach consumers regardless of visibility. Perhaps. But the empirical record on consumer-facing salience exists. The empirical record on pure B2B schemes driving equivalent behaviour change does not.

I cannot tell you what to do with this. I am not a policymaker, and prescriptions are not my territory.

But now you have seen the ledger. The real one.

The EPR scheme is expected to raise about GBP 1.4-1.5 billion in year 1 (2025-26).¹⁷ Producers pass it through. Retailers pass it through. Consumers cannot see it. The money is intended for packaging waste costs but is not ring-fenced for recycling infrastructure. Recycling capacity contracts. Investment stalls. The scheme collects revenue.

If you design a tax to be invisible, you surrender the majority of its behavioural power. The UK designed this one to be invisible. Either the designers did not know the research, or behaviour change was never the primary objective.

You see the pattern.

The Levers

The lever here is visibility. This piece is itself an act of making the ledger legible.

What you now know:

• EPR costs flow through to consumer prices invisibly
• Research demonstrates visible costs produce roughly 7x the behaviour change of invisible ones
• Zero pounds are ring-fenced for recycling infrastructure
• Glass investment is stalling while the scheme funds general council budgets

Knowledge is the precondition for pressure. Local authorities, trade associations, and MPs are currently debating modulated fees for 2026. The salience question — whether consumers should see what they pay — is not yet settled.

If you believe environmental levies should change behaviour, not merely collect revenue, that belief can be expressed where policy is made: in consultation responses, in letters to MPs, in the trade press that shapes industry positions.

The system is working as designed. Which means it can be redesigned.