2026 pEPR Fee Changes Explained for Retailers with a Simple Cost Example

Packaging that looked “cheap enough” in 2025 may become noticeably more expensive in 2026. The reason is not only that PackUK has confirmed increased base fees for pEPR. It is also the arrival of recyclability modulation, which changes the bill according to how recyclable each packaging format is.

For retailers, this matters because the fee is no longer just about how much packaging is placed on the market. It is also about what that packaging is made from, how easy it is to recycle, and whether it is rated green, amber or red.

Red-rated packaging will face a fee multiplier. For the worst-performing materials, that multiplier is expected to rise towards 2.0x over successive years. Green-rated packaging can receive a discount. Amber-rated packaging sits in the middle.

That creates a clear commercial risk. Many small and mid-size retailers have not yet translated their packaging list into a likely 2026 cost. Fewer still have worked out which switches would reduce that cost before the next assessment window.

This article is a plain-English guide, not legal or financial advice. Use it to understand the moving parts, then check your own obligations and figures against PackUK guidance or a qualified adviser.

What pEPR is trying to change

Extended Producer Responsibility for packaging, usually shortened to pEPR, shifts more of the cost of managing packaging waste onto the businesses that place packaging on the UK market.

In simple terms, if a retailer uses packaging that later becomes household waste, the system is designed to make that retailer contribute to the cost of collecting, sorting and treating it.

For retailers, this can apply to packaging such as:

• Own-brand product packaging

• E-commerce delivery packaging

• Imported goods packaging, where the UK retailer has responsibility

• Transit or shipment packaging in some circumstances

• Packaging added at fulfilment, such as mailers, void fill, tape and labels

  
  

The exact obligation depends on the role the business plays in the supply chain and whether it meets the relevant reporting and payment thresholds. That detail matters, but the bigger commercial point is simple: packaging choices now have a more direct cost attached to them.

Under earlier thinking, many retailers focused mainly on weight. Less packaging usually meant a lower fee. Weight still matters, but from 2026 the recyclability rating can change the cost per tonne.

That is the important shift.

What changes in 2026

PackUK has confirmed increased base fees for 2026. These are the starting fees before any recyclability adjustment.

The bigger behavioural change comes from modulation.

Instead of every item in a material group being treated the same way, packaging is assessed for recyclability. It can then be placed into a rating band.

The bands are usually understood like this:

The red rating is the one that should get attention first. A red-rated format does not just miss out on a discount. It can actively increase the fee.

If the multiplier rises towards 2.0x for the worst-performing formats over successive years, a pack that costs £1,000 under the base fee could move towards £2,000 if it remains red-rated, before any other changes in base fees.

That is why the 2026 pEPR fee changes are not just a compliance issue. They are a buying, merchandising, packaging and margin issue.

Why retailers may feel the change more than expected

Retailers often carry a mixed packaging profile. A single online order might include a cardboard box, paper void fill, a product in a plastic pouch, a label, tape, and perhaps a returns insert.

A shop-floor product might combine card, a plastic window, adhesive labels, coatings, inks and security tags. None of those choices looks dramatic on its own. Together, they can decide whether the packaging is easy or hard to recycle.

The issue for many retailers is that packaging decisions are spread across different parts of the business.

Buying teams may choose supplier formats.

Operations teams may choose delivery packaging.

Finance teams may receive the pEPR bill.

Sustainability or compliance teams may collect the data.

If those teams have not joined the dots, the fee impact can come as a surprise.

Common problem areas include:

• Black plastic trays or dark pigments that are harder to sort

• Multi-material packs that cannot be separated easily

• Laminated pouches and films

• Plastic windows attached to paper or card

• Heavy labels or adhesives that affect recyclability

• Small-format packaging that falls through sorting systems

• Compostable or biodegradable materials used where standard recycling systems cannot handle them well

  
  

Some of these formats may be needed for food safety, product protection or shelf life. The aim is not to remove packaging blindly. The aim is to identify where a red-rated format can be redesigned, replaced or reduced without causing bigger problems.

A simple worked example for a mid-size retailer

The example below is illustrative only. The base fees and modulation factors are made-up numbers used to show the calculation method. They are not PackUK’s official fees.

Assume a retailer places the following packaging on the UK market in a year.

Now calculate the cost in two stages.

First, calculate the base fee.

Then apply the recyclability factor.

In this example, the retailer’s bill rises from £3,280 to £3,651 after modulation. That is an extra £371, even though two packaging types receive a green discount.

The reason is simple: the red-rated items carry enough weight and enough fee value to wipe out the savings from the green-rated items.

Now look at what happens if the red multiplier later moves to 2.0x.

The same packaging mix now costs £4,271 in this simplified model. That is £991 above the original base cost.

This is why retailers should not wait until the bill arrives. The biggest gains often come from spotting a small number of red-rated formats early.

What the example tells us

The worked example shows three practical lessons.

Green discounts help, but red penalties can dominate.

A well-performing cardboard or PET format may save money, but a smaller amount of poor-performing flexible plastic can still drive the total bill up.

Weight is not the only issue.

A lighter material can still be expensive if it attracts a high base fee and a red multiplier. Reducing grams helps, but improving the rating can matter just as much.

Future exposure matters.

A format that is “tolerable” at 1.50x may become a much bigger issue if the multiplier rises towards 2.0x. Retailers should model the future cost, not just the first-year cost.

That future view helps decide which projects deserve attention now.

For example, suppose the retailer can replace black plastic trays with clear PET trays of the same weight and base fee. In the example, that changes the factor from 1.50x to 0.85x.

The annual cost for that tonne falls from £645 to £365.50. That saves £279.50 in 2026 under the simple model. If the red multiplier later reaches 2.0x, the saving becomes £494.50.

The same thinking applies to flexible plastics. If 1.5 tonnes of red-rated flexible garment bags could be replaced with a green-rated recyclable alternative at the same base fee, the cost would fall from £1,215 to £688.50 under a 1.50x red multiplier. That is a saving of £526.50 in this example.

At a 2.0x red multiplier, the saving would be £931.50.

The real-world numbers will differ, but the direction is the point. Improving the rating of high-volume red packaging can have a direct and repeatable effect on cost.

How to work out your own exposure

Retailers do not need a perfect model on day one. A useful first pass can be built quickly if the right data is gathered.

List the packaging you place on the market

Start with a packaging inventory. Do not limit it to the obvious product pack.

Include:

• Primary packaging that touches or contains the product

• Secondary packaging used to group products

• Delivery packaging used for online orders

• Imported packaging where responsibility may sit with the retailer

• Labels, sleeves, inserts, tapes and closures

• Returns packaging if supplied to the customer

  
  

Group similar packaging together. For example, all small corrugated mailer boxes can sit in one line if they use the same material construction and weight.

Add material and weight data

For each packaging format, record the main material and the average unit weight.

If exact data is missing, ask suppliers. Do not rely only on catalogue descriptions such as “eco pouch” or “recyclable mailer”. They are not enough for fee modelling.

Useful fields include:

• Packaging name

• Supplier

• SKU or pack family

• Material type

• Unit weight in grams

• Annual units placed on the market

• Total annual weight

• Current recyclability rating, if known

  
  

Once unit weight and annual volume are known, convert the total into tonnes. That gives the base for fee modelling.

Assign a likely red, amber or green rating

Use the latest PackUK assessment rules and guidance to classify each format. Some packs will be straightforward. Others may need supplier evidence or technical review.

Watch for details that can change the rating, such as:

• Pigments and colour

• Labels and coverage

• Adhesives

• Laminates and coatings

• Mixed materials

• Removable or non-removable components

• Size and sortability

  
  

If a pack combines several materials, assess whether they separate easily and whether each part can enter a recycling stream.

Model more than one multiplier

Do not model only the first expected fee outcome. Build a simple spreadsheet that lets the red multiplier change.

A useful version might show:

• Base fee only

• Green discount applied

• Red multiplier at the first-year level

• Red multiplier at a higher future level

  
  

This makes the risk visible. It also helps teams compare packaging redesign costs with fee savings.

Rank the biggest opportunities

The best first projects usually sit where three things overlap:

• High annual tonnage

• Red or uncertain rating

• A realistic alternative exists

  
  

Do not spend months debating a tiny label if a high-volume tray or mailer is causing most of the exposure. Start where the cost and practicality line up.

Packaging changes that may improve the rating

There is no universal fix. A packaging format has to protect the product, meet safety rules, work in fulfilment and satisfy customer expectations. Still, several changes often deserve review.

Move away from hard-to-sort colours

Dark plastics, especially black plastic, are a common concern because they can be harder for sorting systems to detect. Where product needs allow, moving to clear or natural-coloured plastic may improve recyclability.

Reduce mixed-material formats

A paper pack with a bonded plastic window may look simple, but it can create recycling issues if the materials cannot be separated easily. The same concern applies to laminated pouches and multi-layer films.

Where possible, choose mono-material formats or designs where components separate without tools.

Check labels, inks and adhesives

A recyclable container can be dragged down by a label, sleeve or adhesive that interferes with sorting or recycling. This is easy to overlook because labels are often bought separately from the main pack.

Avoid vague “green” claims

Compostable, biodegradable and plant-based packaging can still be problematic if it does not match the waste system customers actually use. A material’s origin is not the same as its recyclability.

For pEPR planning, the practical question is: can this packaging be collected, sorted and recycled through the relevant system?

Ask suppliers for evidence

Retailers should ask packaging suppliers for clear data, not general claims.

Ask for:

• Material specifications

• Unit weight

• Recyclability assessment evidence

• Details of coatings, laminates and adhesives

• Confirmation of any changes since the last order

• Alternative formats with better ratings

  
  

If suppliers cannot provide this, it becomes harder to forecast cost or defend the rating.

What to do before the next assessment window

The best next step is to build a short, practical workplan.

Start with the 20 packaging formats that account for the most weight or spend. For each one, confirm the material, weight, annual units and likely rating. Then apply the 2026 base fee and modulation approach when the relevant figures are available.

From there, split the list into three groups.

This gives finance, buying and operations a shared view. It also turns pEPR from an annual reporting task into a packaging cost control exercise.

The retailers that act early will have more options. They can test alternatives, negotiate with suppliers and phase in changes without last-minute disruption. Those that wait may find themselves paying higher fees on packaging that could have been improved months earlier.

The key takeaway is simple: do not treat the 2026 fee changes as just another compliance update. Build a packaging cost model, identify the red-rated formats, and start with the changes that offer the biggest fee reduction with the least operational risk.