How EPR Fees Are Calculated
Under the UK's Extended Producer Responsibility (EPR) scheme, every obligated producer must pay fees that cover the full cost of managing their packaging once it becomes waste. This includes collection from households and businesses, sorting at Material Recovery Facilities, reprocessing into secondary raw materials, and disposal of any residual waste that cannot be recycled.
The fee system is designed so that producers who place more packaging on the market — and especially producers whose packaging is harder to recycle — pay proportionally more. If you have been wondering "how much are EPR fees?", the answer depends on three key variables: what materials you use, how much tonnage you handle, and how recyclable your packaging is.
The three components of your EPR bill
Your total EPR cost is composed of three main elements:
- Registration fee — A flat annual fee paid to the scheme administrator to cover the administrative costs of registration, data processing, and compliance monitoring. This is typically a fixed cost that does not vary by tonnage.
- Per-tonne disposal fee — This is the main cost. Each tonne of packaging you place on the UK market incurs a fee based on the material type. Different materials have different base rates reflecting their actual end-of-life management costs.
- Modulation adjustment — A multiplier applied to your per-tonne fee based on your packaging's Recyclability Assessment Methodology (RAM) rating. Green-rated packaging pays less; Red-rated packaging pays more.
The fee formula
For each packaging component you report, the fee calculation follows this formula:
The base rate varies by material. The modulation multiplier varies by RAM rating and increases each year as the scheme matures.
This is applied per packaging component, per material, per format. A single product might contain multiple components — for example, a cardboard box (paper/card base rate), a plastic window (plastic base rate), and a steel staple (steel base rate). Each is calculated independently and summed for your total liability.
Why component-level data matters
Because fees are calculated per component, producers who report at a granular level can identify exactly where their costs are concentrated. A single Red-rated plastic component might be responsible for a disproportionate share of your total bill — and replacing it could yield outsized savings.
Who pays what
Fees are allocated based on the packaging activity type you perform. Brand owners typically bear the largest share as they make the key decisions about packaging design. Packers/fillers, importers, distributors, and online marketplaces each have defined obligations under the regulations. The activity type you select in your DEFRA submission determines how fees are apportioned.
Large producers (turnover above £2 million and handling more than 50 tonnes of packaging) report twice per year and are subject to the full fee regime including modulation. Small producers (turnover above £1 million and handling more than 25 tonnes) report annually with simplified requirements. Organisations below both thresholds are not obligated.
Base Rates Per Material
Base rates reflect the actual cost of managing each material through the end-of-life cycle. Materials that are expensive to collect, sort, and reprocess have higher base rates. Materials with established recycling infrastructure and strong secondary material markets have lower rates because their end-of-life management costs less.
The following table shows indicative base rate ranges per material category. Exact rates are published by DEFRA annually and may be adjusted based on actual scheme costs and updated infrastructure assessments.
| Material | Base Rate (£/tonne) | Why This Rate |
|---|---|---|
| Plastic | £350 – £500 |
Highest rates due to sorting complexity, polymer variability, and contamination challenges. Flexible plastics cost more than rigid. |
| Paper / Card | £80 – £120 |
Well-established collection and reprocessing infrastructure. Strong secondary fibre markets keep costs low. |
| Glass | £120 – £180 |
Heavy material with high transport costs. Colour separation required. Cullet markets are stable but logistics-intensive. |
| Aluminium | £60 – £90 |
High intrinsic value of recycled aluminium offsets collection costs. Eddy current separation is efficient and mature. |
| Steel | £50 – £80 |
Lowest rates. Magnetic sorting is simple and cheap. Steel recycling markets are deep and global. |
| Wood | £100 – £150 |
Limited recycling infrastructure for treated wood. Clean wood can be chipped; contaminated wood goes to energy recovery. |
Important: these are illustrative ranges
Exact base rates are published by DEFRA each year and may differ from the ranges shown above. Rates are reviewed annually based on actual scheme costs, infrastructure capacity, and market conditions for secondary materials. Always refer to the latest DEFRA guidance for the current year's official rates.
Within each material category, rates can vary further by sub-type and format. For example, rigid HDPE bottles are cheaper to manage than flexible multi-layer film, even though both are classified as "plastic." Clear glass costs less than mixed-colour glass because it has a wider range of end markets. These nuances are captured in the detailed rate tables that DEFRA publishes, and they are why accurate material classification in your submission matters so much.
The rate differential between materials creates a clear financial signal. Switching even a portion of your packaging from high-rate materials (like flexible plastic film) to lower-rate alternatives (like paper/card or aluminium) can meaningfully reduce your EPR bill — before modulation multipliers are even applied.
Modulation Multipliers Timeline
Fee modulation is the mechanism that makes EPR fees dynamic rather than flat. Instead of every producer paying the same rate per tonne for a given material, the rate is adjusted up or down based on how recyclable the packaging actually is. This is where your RAM rating directly hits your bottom line.
DEFRA has published a phased timeline for introducing modulation, with multipliers increasing gradually over four years. The intent is to give producers time to adapt their packaging while progressively strengthening the financial incentive to improve recyclability.
The four-year phase-in schedule
The trajectory is unmistakable. In the baseline year (2025-2026), all packaging pays the same rate regardless of recyclability. By 2028-2029, Green-rated packaging receives a 20% discount (0.8x multiplier) while Red-rated packaging pays double (2.0x multiplier). That creates a 2.5x cost differential between the best and worst recyclability ratings for the same material and tonnage.
The real cost of inaction
A producer handling 200 tonnes of plastic packaging at the Red rate would pay approximately £200,000 in EPR fees by 2028-2029 (200 tonnes × £500/tonne × 2.0x). The same tonnage rated Green would cost £80,000 (200 tonnes × £500/tonne × 0.8x). That is a £120,000 annual difference for a single material stream. Over four years of escalating modulation, the cumulative cost of Red-rated packaging is substantial.
It is also worth noting that these multipliers are minimum projections. DEFRA has indicated that multipliers may be adjusted based on scheme cost recovery requirements and the pace of industry progress. If the recycling rate for a particular material category does not improve as expected, Red multipliers could increase further. The numbers above represent the current baseline plan, not a guaranteed ceiling.
How RAM Ratings Affect Your Fees
Your packaging's Recyclability Assessment Methodology (RAM) rating is the single most important factor in determining your modulated fee. Each packaging component is assessed across five stages — Classification, Collection, Sortation, Reprocessing, and End-Market Application — and assigned a Red, Amber, or Green rating based on whether it can be effectively recycled through UK infrastructure.
The connection between RAM and fees is designed to be a direct financial lever. Producers who invest in improving their packaging's recyclability are rewarded with lower fees. Those who continue to use packaging that cannot be recycled through UK infrastructure pay a surcharge that reflects the higher cost of managing that waste — typically through energy recovery or landfill.
Why Green ratings matter more each year
In 2025-2026, the difference between Green and Red is zero — no modulation is applied. This is deliberate: it gives producers a year to understand the system, get their data in order, and begin planning packaging improvements. But from 2026-2027 onwards, the financial penalty for Red-rated packaging escalates rapidly. Producers who treat the baseline year as "business as usual" will face a sharp cost increase in year two.
The strategic producers — the ones who will gain competitive advantage from EPR — are using the baseline year to audit their portfolios, identify high-cost Red items, and begin switching to more recyclable alternatives. By the time modulation fully kicks in, they will already be paying Green rates while their competitors are still scrambling.
Component-level modulation
Fee modulation is applied per component, not per product. A product with four packaging components could have four different RAM ratings and four different modulation multipliers. A corrugated cardboard outer box (Green, 0.8x by 2028-2029) might be packaged alongside a carbon-black plastic tray (Red, 2.0x) and a PET blister (Green, 0.8x). Each component is assessed and charged independently.
This component-level granularity is why producers who report accurate, detailed data gain an advantage. If you lump all your packaging into broad categories, you may end up paying higher average rates than necessary. But if you report at the component level with accurate RAM ratings, you ensure that your Green-rated components get the discount they deserve.
For a deeper understanding of how RAM assessments work and what each rating means, see our complete guide to RAM ratings. For practical tips on improving ratings, read our guide on how to improve your RAM rating.
See your fees broken down by component
Repackd calculates your exact EPR liability per component, per material, per RAM rating — with projections through 2029 as modulation increases.
Try the Fee Calculator →How to Reduce Your EPR Fees
The EPR fee system is explicitly designed to be reducible. Unlike a flat tax, your fees decrease as your packaging improves. Every Red-rated component that you shift to Amber or Green directly reduces your bill. Here are the most effective strategies, ranked by typical impact.
Switch problematic materials to recyclable alternatives
The highest-impact change you can make. Replace carbon black plastic trays with detectable alternatives (dark green, dark blue, or brown pigments achieve the same shelf appeal while being sortable by NIR). Switch multi-layer flexible pouches to mono-material PE or PP alternatives. Move from PVC to PET or rPET where possible. Each material swap can shift a component from Red to Amber or Green. See our guide on carbon black alternatives for specific options.
Remove non-recyclable components entirely
Audit every component of every product packaging. Are there elements that serve no functional purpose but damage recyclability? Non-detectable labels, metallic foil overwraps, PVC shrink sleeves on PET bottles, excessive adhesive use — these all drag ratings down. Removing them is often cheaper than replacing them with recyclable alternatives, and the fee savings compound year on year.
Design for sortation infrastructure
UK Material Recovery Facilities use Near-Infrared (NIR) sorting, eddy current separators, and ballistic screens. Packaging that works with this infrastructure gets sorted efficiently and achieves better RAM ratings. Avoid full-body shrink sleeves that mask the base material. Keep labels small relative to the container. Use adhesives that release during the wash process. These seemingly small design choices have measurable fee impacts.
Reduce overall packaging weight
While this does not change your RAM rating, it directly reduces your tonnage — and fees are calculated per tonne. Lightweighting your packaging reduces your base cost before modulation is even applied. A 15% weight reduction across your portfolio is a 15% fee reduction, full stop. Combine lightweighting with material improvement for maximum savings.
Work with suppliers on packaging specifications
If your packaging is supplied by third parties, ensure your procurement specifications include recyclability requirements. Mandate detectable pigments, mono-material construction, and MRF-compatible label formats. Many suppliers can meet these requirements at minimal additional cost — they just need to be asked. Our guide on improving your RAM rating includes specification templates you can share with suppliers.
Consolidate packaging formats
Reducing the number of distinct packaging formats in your portfolio simplifies compliance, improves purchasing power for recyclable alternatives, and makes it easier to track and optimise RAM ratings. A producer with 50 SKUs on 12 packaging formats has more optimisation opportunities than one with 50 SKUs on 50 unique formats.
The ROI on packaging redesign
For most producers, the cost of switching from Red to Green materials is recovered within 12-18 months through fee savings alone — and that is at current modulation levels. As multipliers increase through 2029, the payback period shrinks. By 2028-2029, many material swaps will pay for themselves within a single fee cycle.
Worked Examples
Abstract fee structures are hard to reason about. Here are three realistic scenarios showing how EPR fees work in practice for different types of producers. All calculations use 2028-2029 modulation rates to show the full impact of the scheme at maturity.
A direct-to-consumer skincare brand ships all products in corrugated cardboard boxes with paper tape and paper void fill. Total packaging tonnage: 30 tonnes per year. All components are paper/card, all rated Green.
A regional food brand uses a mix of packaging: cardboard outer cases (Green), PP rigid trays (Amber), PE film wrapping (Amber), and glass jars (Green). Total: 150 tonnes spread across four material streams.
A national FMCG brand uses 500 tonnes of packaging, predominantly carbon-black plastic trays and multi-layer pouches (Red-rated). After a packaging redesign programme, they switch to detectable pigment trays and mono-material pouches.
Example 3 illustrates the transformative potential of packaging optimisation. By shifting 70% of their plastic packaging from Red to Green and 24% to Amber — while accepting that 6% remains Red for technical reasons — this producer reduces their annual EPR bill by £198,600. Over four years, that is nearly £800,000 in cumulative savings, dwarfing the cost of the redesign programme.
Note on worked examples
These examples use illustrative base rates within the ranges published by DEFRA. Your actual fees will depend on the specific rates in effect for each compliance year. Repackd's fee calculator uses the latest published rates and produces precise figures for your specific packaging portfolio.
Payment Timeline
Understanding when EPR fees are invoiced and when payment is due is essential for cash flow planning. The EPR fee cycle follows the DEFRA reporting schedule, with invoices issued after each reporting period.
Scheme registration
All obligated producers must register with the scheme administrator. Registration fee payable at this point. This is a one-off administrative cost covering your account setup and initial compliance period.
H1 2025 data submission (large producers)
Large producers submit packaging data for April–September 2025, including tonnage by material and RAM ratings. No fee invoice at this stage — this is a data submission deadline.
H2 2025 data submission + annual submission (small producers)
Large producers submit H2 2025 data (October–March). Small producers submit their full 2025 annual data. This completes the first full year of reporting.
First fee invoices issued
The scheme administrator issues invoices covering the April 2025 to March 2026 compliance period. Fees are calculated based on reported tonnage, material type, and RAM ratings. Payment terms: 30 days from invoice date.
Second compliance year invoices + modulation begins
Invoices for the 2026-2027 period include the first modulation multipliers. This is when Green-rated producers start seeing the financial benefit, and Red-rated producers start feeling the surcharge. Fee amounts may be significantly different from the baseline year.
Late payment and non-compliance penalties
Late payment of EPR fees incurs interest charges calculated from the due date. Persistent non-payment can result in enforcement action by the Environment Agency, including civil penalties of up to £100,000. Directors can be held personally liable for compliance failures committed with their consent or connivance.
Beyond financial penalties, non-compliant producers may also face reputational risk. The Environment Agency publishes enforcement actions, and non-compliance with packaging regulations is increasingly scrutinised by retailers, investors, and consumers. Several major UK retailers have already indicated they will require EPR compliance evidence from suppliers as a condition of listing.
Plan your cash flow now
The first fee invoices in October 2026 will cover a full year of packaging activity. For larger producers, this could be a six-figure bill arriving in a single invoice. Build this cost into your 2026-2027 budget planning now, and use the time before modulation starts to reduce your projected fees through packaging improvements.
Calculate Your EPR Fees with Repackd
Every number in this guide is an approximation. Your actual EPR fees depend on your specific packaging portfolio — the exact materials, tonnages, formats, and RAM ratings for every component you report. The only way to know your true liability is to calculate it.
Repackd's EPR fee calculator takes your packaging data and produces a precise, component-level breakdown of your fees — including projections through 2029 as modulation multipliers increase. You can model "what if" scenarios to see exactly how material switches, weight reductions, and design changes would affect your bottom line.
Know your exact EPR liability
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Related Resources
This guide covers the fee structure. For more on the broader EPR scheme, RAM assessments, and practical compliance strategies, see these related resources: