Lorax EPI

The differences between plastics taxes and EPR fees

The differences between plastics taxes and EPR fees
by Annis Mapleston at 12:36 in Circular Economy, Environmental, Packaging

​Countries around the world are considering the best way to fund waste management. It is becoming increasingly common for governments to believe that producers should finance the significant majority of the costs of waste management - but should this be through a plastics tax or extended producer responsibility (EPR) fees - and what's the difference?

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Sometimes thought to be the same thing, EPR fees and plastics taxes are very distinct mechanisms, and are typically used for very different reasons.


EPR fees

  • Are used to directly fund the waste management system and are closely linked to the waste placed on the market by an individual producer;​
  • Are, or should be, directly linked to the costs of this system. As a result, materials that are easier to recycle (or which can be sold for a higher price once recycled) generally incur lower EPR fees;
  • Can be modulated to encourage environmentally friendly design choices - such as lack of carbon black pigments or material combinations that disrupt the recycling process;
  • Are generally incurred at the time a product is placed on the market for the first time;
  • Are typically paid to a producer compliance scheme / stewardship scheme (although some countries mandate payment directly to the national authorities);
  • Are not viewed as taxes, and do not require the appointment of a fiscal representative for non-local producers.

Plastics taxes

  • ​Are imposed by national governments to trigger certain behaviours (such as increased use of recycled materials);
  • May not have any link to the costs of waste management or recycling - many are currently set at a flat rate for all plastics;
  • May or may not be ringfenced to fund either waste management or the development of recycling infrastructure;
  • Are often incurred at a certain point in the manufacturing process, or at the time of import into the country;
  • Are typically paid directly to the local customs agency through the tax system, and may require the appointment of a fiscal representative for non-local producers.

Most plastics taxes are relatively new, with few currently in effect. As a result, exact reporting requirements are still unclear for many countries. However, it is becoming increasingly certain that the data used for EPR reporting may not be adequate for plastics tax reporting - while the first is usually based on sales data, this may not be appropriate for tax reports.

Lorax EPI is closely monitoring the emergent requirements of key plastics taxes​, such as ones in the EU, UK, Spain, Italy and the United States, so that we can help our clients determine their obligations and comply where necessary. For assistance navigating this developing landscape or to discuss roadmaps for mitigating some of these taxes, contact us at info@loraxcompliance.com today.​


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