Why the EU’s new packaging rules are such a nightmare for small UK businesses

As the majority of the EU’s Packaging and Packaging Waste Regulation (PPWR) came into effect on the 12th of August, small ecommerce businesses have been left reeling – but not in the way many expected.

The recycling and labelling rules don’t actually apply until 2028 to 2030, but businesses are required to register and pay compliance fees separately in every EU country they ship to today – regardless of the size of their operation – with costs ranging from €300 to €1,100 per market, per year.

With small sellers’ margins already stretched thin, we spoke to compliance experts, fulfillment specialists, and business owners, to unpack what the new rules mean in practice, and to help you decide whether the cost of staying in the EU market will be worth it.

New PPWR rules: what rules changed on the 12th of August?

After an 18-month transition period, most of the PPRW provisions took effect on August 12, 2026, marking the start of active legal compliance obligations for businesses selling goods to the EU. 

Rather than requiring businesses to redesign packaging or switch materials overnight, the initial rules focus on who is responsible for the packaging entering the EU market and proving it with paperwork.

In practice, this involves issuing a declaration for each type of packaging they use and registering with each EU state’s Extended Producer Responsibility (EPR) scheme individually, as there’s no EU-wide registration. Most states also require sellers to appoint an in-state “authorised representative” to handle registration on their behalf.  

Sophie Ashley, Head of Marketing at Parcel2Go, says this distinction is where most of the confusion lies: “What kicked in on 12 August is the compliance side, registration… The bit everyone pictures when they hear “packaging regulation”, recyclability, labelling, changing materials, is still years off.”

Despite this, many sellers are rushing to change their packaging unnecessarily. Lee Bryan, founder and CEO at Arcus Compliance, has a message for those jumping the gun: “If you are redesigning your outer packaging this month against numbers that do not exist yet, you are guessing with your own money.”

Why the new packaging rules disproportionately hurt small businesses

Experts and small businesses agree that the main sticking point of these new rules is the fixed costs. Since PPWR compliance costs are charged per country, not by parcel or revenue unit, microbusinesses are subject to the same fees as large corporations. 

Lee Bryan sees this play out across every business he advises. “Forty parcels a month costs roughly what forty thousand costs. Compliance has stopped scaling with revenue and started scaling with the number of flags on your shipping map,” Bryan told us, highlighting the imbalance. 

For many businesses, the cost of entering each EU market could reach four figures, even if they send a low number of parcels to the country. Natasha Dauncey, Founder & Owner of Apothaka Skincare, has experienced this firsthand.

“Even if I just send a few parcels a year to EU markets, I’m now faced with registration fees of 300-1100 Euros per market per year, plus authorised rep fees,” Dauncey tells us, adding “These fees are the same whether you’re a solo-run business or a massive corporation, which is inherently unfair.”

With the cost of staying compliant, in many cases, exceeding the packaging fees themselves, the burden of PPWR is landing hardest on the businesses least equipped to absorb it.

As a result, small sellers are being forced to make difficult decisions, from scaling back EU trade to dropping out of the market for the foreseeable future.

Automatic crackdowns are forcing many small sellers to leave the EU market

As tempting as it may be to ignore the paperwork and hope for the best, the risks of not complying with PPWR regulations are real. According to Lee Bryan, instead of non-compliant parcels being stopped at the border, the check now happens on the listing page itself. 

“Marketplaces have to check that a seller is registered before they can trade, and fulfilment providers sit in the same chain. What that produces is not a fine, it is a delisting. No warning, no negotiation, no inspection,” Byran tells us, adding that this automated enforcement is causing many sellers to retreat rather than take risks.

This is reinforced by Natasha Dauncey, who says “most microbusinesses have had to stop shipping to the EU as they simply can’t afford the cost” associated with registrations and authorised representatives. 

There’s an irony to the timing, too. The EU is discussing exempting EU-based micro businesses from requiring an authorised representative. But with the relief unlikely to extend to the UK, many smaller sellers are still facing the same fixed costs.

What can small sellers do to stay on top of PPWR?

While the costs of staying compliant will force some smaller sellers out of the EU market, there are still ways to manage the new regulations rather than retreat entirely.  

Lee Bryan recommends avoiding spreading your sales too thinly and narrowing your focus to markets that create meaningful revenue: “Pick the three or four countries that actually pay, register there, appoint there, and stop dribbling single orders into another twelve where you will never recover the fixed cost.” 

For sellers with enough sales volume, shifting the legal responsibility to an EU-based partner can prove to be more affordable than managing registrations yourself.

He explains that if an established EU business places your goods on the market, the producer role sits with them rather than with you, “for anyone with real volume, it is usually cheaper than running 27 relationships.”

Finally, don’t make an impulsive decision to pull out of the EU market; crunch the numbers first. If EU sales make up a small fraction of your overall revenue, and sales are spread out among several countries, retreating might be the sensible move.

But if a handful of markets are driving consistent revenue, it may be worth absorbing these fixed costs rather than walking away from the income altogether.