Retailers Warn Net Zero Recycling Costs Will Hike Household Bills to £4 Billion

Undated file photo showing people shopping in a supermarket. (Aaron Chown/PA)

A net zero green levy that forces companies to take on packaging recycling costs could increase household bills, according to retailers.

In a letter sent to The Telegraph, the British Retail Consortium, the trade association for all UK retailers, has said that a net zero scheme that charges retailers and manufacturers for the cost of councils recycling their packaging will increase household bills up to £4 billion a year when it is rolled out next April.

Helen Dickinson, chief executive of the British Retail Consortium, said that the Extended Producer Responsibility scheme, as well as the introduction of a Deposit Return Scheme, which is set to be implemented in the next couple of years, is “an unambitious and ineffective strategy that will do little to improve our abysmal recycling rates.”

She called the government’s Resources and Waste Strategy, which the Extended Producer Responsibility scheme is part of, a “£4 billion-a-year headache for retailers and their customers.”

“Over the next year or so a raft of new regulations and taxes will burden retailers—and ultimately consumers—with higher costs. Just as inflation looks to be turning a corner, these new policies put this at peril,” she said.

Dickinson said that the government “needs to look at these in turn, and consider whether to implement, postpone or scrap each one.”

Plastic

There are upcoming far-reaching bans regarding plastic use and regulation in the UK.

In the UK, the collecting and disposing of packaging waste is funded by council tax and carried out by local authorities.

But as part of its commitment to achieve net zero by 2050, producers soon will be required to pay for both the collection and disposal costs of household packaging they supply when it becomes waste. The Extended Producer Responsibility scheme will see the full cost of collecting household packaging waste shift from the taxpayer to the producers.

Higher fees will be levied if the packaging is harder to reuse or recycle.

According to rules which came out in February this year, all obligated packaging producers in England, Northern Ireland, and Scotland must also collect information on the amount and type of packaging they have supplied during 2023.

Producers with a turnover of greater than £2 million and who handle more than 50 tonnes of packaging each year must also report this information to the Environment Agency twice a year.

The government claims that the revenue generated will support better local council services and mean that all households can recycle the same packaging materials.

A range of polluting single-use plastics will be banned that are not in the Extended Producer Responsibility scheme from October this year. The ban will include single-use plastic plates, trays, bowls, cutlery, balloon sticks, and certain types of polystyrene cups and food containers. People won’t be able to buy these products from any business any more.

A Defra spokesperson told The Epoch Times by email: “As the prime minister has set out, growing the economy is an immediate priority for this government.

“Supporting businesses to grow is a crucial part of this—which is why we want to ensure a simple and effective system for our Extended Producer Responsibility and Deposit Return schemes that benefits both businesses and consumers.

“We have been engaging closely with manufacturers, retailers, and packaging companies on the design of these schemes and on delivery plans. We will continue to work with these groups as we finalise plans to ensure that the schemes will deliver our environmental goals.”

Price Caps

The British Retail Consortium also warned of possible government plans for price controls, which it said “is surely a 1970s solution to a 2020s problem.”

Last month, the government faced a backlash from retailers over its unannounced plans to encourage supermarkets to impose voluntary price caps on food staples to help with the cost of living.

Downing Street is reportedly drawing up proposals to advocate for charging the lowest possible amount for some basic products like bread and milk.

In late May, Asda Chairman Stuart Rose warned the government of “unintended consequences” around encouraging supermarkets to impose price caps on food staples.

Rose, who also ran Marks and Spencer and chaired Ocado said: “My view on this is quite simple. I’ve been involved in retail for 50 years, and there’s been all sorts of schemes being followed by all sorts of governments over time about what they think we should be doing to control the market.

“You can’t interfere in the markets, the markets will control themselves. We are a very efficient industry, not just in Asda, across the retail piece. We have kept the price of electronics and clothing and food in real terms down to levels that are unprecedented in terms of our ability to be efficient.

“So, you know, I think we do a very, very good job for consumers, and if the government wants to start doing—in inverted commas—‘relatively clumsy things,’ they need to be careful about the unintended consequences of what they want to do. Let the shopkeepers do what they do well: shop keep.”

PA Media contributed to this report.