New laws to promote recyclable packaging will come into force next January

The UK’s shift to Extended Producer Responsibility (EPR) for packaging continues into 2026, bringing new fee structures and updated regulations that will begin applying from January.

This means businesses will need to accurately report packaging waste – and those not using sustainable packaging could potentially face higher fees.

For small retailers and ecommerce sellers, changing packaging may bring increased costs, as well as other challenges around compliance and red tape.

A silver lining is that with the wider shift towards recyclable materials, greener packaging may actually become cheaper and easier to source, thanks to the increased demand.

What are the new 2026 packaging laws?

EPR already requires certain businesses to report detailed packaging data, including materials, weights, and how easily each type can be recycled. However, from 2026, modulated fees (fees which increase or decrease based on how environmentally friendly packaging is) will begin phasing in, meaning:

• More recyclable packaging is cheaper
• Hard-to-recycle packaging becomes more expensive

The EPR changes are due in January 2026. The idea behind the EPR is that businesses which meet the threshold should cover the full cost of dealing with packaging once it becomes waste.

Under the new rules, firms will need to report detailed packaging data, including materials, weights and recyclability. Businesses that use sustainable packaging will benefit from paying lower fees, while those using fewer green options will pay more.

The regulations apply to manufacturers, importers, brand owners, and certain retailers. If you sell products in packaging, ship orders, or apply your own branding, you may need to follow the new rules.

The shift is in addition to other changes to traceability, advertising and sustainability reporting. 5th January brings increased restrictions on the advertising of unhealthy food, and there will be increased rules on the traceability of ingredients coming into play throughout 2026.

Who will be affected — and how?

According to the government’s guidance, you’ll need to take action if you’re an individual business, subsidiary or group with an annual turnover of £1m or more, and you imported or supplied over 25 tonnes of packaging to the UK market in the previous calendar year, while carrying out any ‘packaging activities’.

That means manufacturers will be the most affected by the new EPR regulations, but small online shops, independent boutiques and DTC brands will also be indirectly affected.

Many suppliers are already responding to the planned changes by phasing out non-recyclable options. While others are promoting lower-cost recyclable alternatives because lowered fees make them more attractive options for businesses.

If you’re ahead of the times and already using eco-friendly packaging, you might see immediate benefits in the form of cheaper materials and lower fees. If you rely on budget single-use options, you may not be so lucky.

SMEs that switch early can secure better rates, avoid green packaging shortages, and strengthen their image as a sustainably-minded brand, which is increasingly noteworthy for customers. Not to mention, the invaluable benefits of greener packaging to Mother Earth herself.

What can small retailers do to prepare (and save)?

Firstly, start by reviewing what you already use. Look at boxes, tapes, mailers, filler and branded packaging to spot anything less planet-friendly that might incur higher fees.

Next, chat with your suppliers. Ask about any planned changes, recommended alternatives, and following that, how long it’ll take to switch. Consider ordering early or negotiating improved rates before the regulations come into force in January.

Remember, it’s not just about switching packaging, you also need to record accurate data. A good start is reviewing your existing packaging data. Even small retailers will need accurate records of the types of packaging used and in which quantities. Getting organised now avoids dreaded late-minute admin rushes.

Finally, why not tell your customers? Turn this required shift into a positive brand moment, that is, without veering into greenwashing. Show them you’re making sustainable choices and staying ahead of industry changes.

While it’s understandable to begrudge compulsory regulation changes, by responding to this one early, you have an opportunity to reduce costs, simplify compliance, improve your brand image, and reduce your carbon footprint.