Understanding Modulated Fees (2026): What UK Producers Need to Know
How 2026 fee changes will affect your business and how to prepare now.
What Are Modulated Fees Under UK EPR?
Modulated fees are packaging charges that vary based on recyclability and material type. From 2026, producers will pay higher fees for packaging that is difficult or expensive to recycle and lower fees for recyclable materials.
The goal is to encourage the use of recyclable packaging formats and reduce overall environmental impact.
Modulated fees are expected to apply from 2026, subject to final confirmation of fee structures by government. Final fee rates and material bands have not yet been published, so producers should prepare for several possible scenarios using available guidance.
Your 2025 RAM classifications will directly influence your 2026 modulated fee outcomes.
Why Modulated Fees Matter for SMEs and Large Producers
Modulated fees represent the biggest financial shift in the EPR system.
They will influence:
Total EPR compliance costs
Packaging design decisions
Supplier contracts
Material choices
Long-term budgeting and forecasting
For many businesses, modulated fees may account for a significant portion of annual packaging compliance expenditure from 2026 onwards.
Understanding the implications early allows businesses to avoid unexpected costs and make informed changes to packaging formats.
What Will Modulated Fees Apply To?
Modulated fees will apply primarily to household and household-like packaging, with commercial packaging expected to follow separate fee mechanisms.
Modulated fees are expected to apply to:
Primary packaging
Secondary packaging
Transit packaging
Household and household-like packaging
Online marketplace packaging
Imported packaging placed on the UK market
Fees will vary by:
3.1 Material Type
Examples include:
Plastic (recyclable vs non-recyclable)
Paper/card
Aluminium
Glass
Steel
Wood
Composite materials
More recyclable formats are expected to attract lower fees.
3.2 Packaging Format and Function
Fee modulation may reflect:
Rigid vs flexible formats
Labels, films, and laminates
Multi-layered packaging
Product categories (e.g., food vs non-food)
Packaging with complex construction or multi-material layers is expected to attract higher fees due to lower recycling efficiency.
3.3 Recyclability and End-of-Life Pathway
Factors that may influence fees include:
Ease of sorting
UK recycling availability
Contamination potential
Market value of materials
Design features that improve or hinder recovery
These elements incentivise producers to optimise packaging for real-world recyclability, not just theoretical recyclability.
How Modulated Fees Will Be Calculated (Expected Approach)
While final fee tables are not yet published, the UK is following similar principles to EU fee models, where:
Fully recyclable packaging attracts lower fees
Hard-to-recycle materials attract higher costs
Composite materials incur premiums
Contamination-prone formats may be penalised
Producers should expect a tiered fee structure that grades materials and formats.
What Businesses Should Do NOW (Before 2026)
Because final fee tables are pending, the smartest approach is to prepare using a structured readiness plan. this is why data accuracy in 2025 will influence modulated fee outcomes in 2026.
5.1 Review Packaging Portfolios
Identify which materials you currently use:
Are they widely recycled in the UK?
Do they require changes?
Are suppliers able to provide recyclability evidence?
5.2 Check Supplier Data Quality
2026 fee accuracy will depend heavily on:
Correct material descriptions
Layer composition for composites
Recyclability labels
Packaging weights
Format-specific data
Any incorrect or missing data will directly affect fee calculations.
5.3 Model Scenarios for Cost Planning
Producers should assess potential outcomes:
Best case: majority recyclable packaging
Mid case: mixed recyclable/non-recyclable
High-cost case: significant use of hard-to-recycle formats
This supports budgeting and allows businesses to anticipate changes.
5.4 Consider Packaging Design Adjustments
Where practical, producers may choose to:
Shift to recyclable mono-material formats
Reduce composite packaging
Avoid unnecessary decorative laminates
Explore recyclable alternatives
Work with suppliers on optimised formats
Small changes can significantly reduce future fees.
Unsure Whether You’re a Large or Small Producer?
Your 2025 data submissions will lay the foundation for:
Baseline calculations
Producer categorisation
Future fee allocations
Readiness for 2026 complexities
Accurate data in 2025 reduces the risk of incorrect modulated fee charges later.
Businesses should ensure:
Correct tonnage reporting
Supplier evidence is reliable
File formats meet DEFRA’s required structure
Material splits are accurate
Composite packaging records are complete
Errors now will compound in 2026 when fees become more granular.
Common Challenges Businesses Face
Typical issues include:
Incomplete supplier information
Unclear packaging composition
Multi-layer packaging with no breakdown
Lack of internal ownership or documentation
Incorrect assumptions about recyclability
Missing data for imported packaging
These gaps increase the risk of higher fees or compliance errors.
How EPR Horizon Helps Businesses Prepare for 2026
EPR Horizon provides structured, compliant support to help businesses prepare for modulated fees well in advance.
Our approach includes:
✔ Packaging data structuring and validation
Ensuring data is accurate and ready for fee calculations.
✔ DEFRA-aligned submission files
Reducing errors before reporting begins.
✔ Modulated fee scenario modelling
Helping businesses forecast potential cost exposure.
✔ Supplier engagement support (with producer approval)
Standardised requests and formats to secure reliable information.
✔ Packaging portfolio review
Identifying materials and formats that may attract higher fees.
✔ Long-term readiness planning
Ensuring businesses are compliant for both 2025 and 2026 requirements.
Unsure How Modulated Fees Will Affect You?
If you're uncertain about:
Whether your packaging formats are at risk of higher fees
What your 2026 cost exposure might be
Whether your supplier data is reliable
How to prepare for accurate reporting
What packaging changes may improve outcomes
