The Environment Act 2021 – What does it mean for packaging?

If your business works with packaging, the Environment Act 2021 is one of the most important pieces of legislation shaping how you’ll operate over the next decade.

It sets the legal foundation for how the UK now manages environmental protection following Brexit, replacing most of the framework previously governed by EU law.

It also provides the authority needed to reform and strengthen existing systems, such as the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, bringing them into line with more ambitious environmental goals.

There are four key areas that are prioritised under the Act:

• Air quality
• Biodiversity
• Waste reduction
• Plastic pollution

While it addresses multiple priorities, its impact is particularly significant on how packaging waste is managed.

The Act introduces long-term, legally binding environmental targets. For your business, this means that the packaging materials you use directly affect your environmental impact.

This is where Extended Producer Responsibility (EPR) comes in. Enabled by the Environment Act 2021, EPR reforms the packaging waste regulations by shifting the full cost of managing packaging waste onto producers.

In this guide, we’ll look at the main parts of the Environment Act, how it relates to packaging, and what this means for packaging design and costs.

If you’re trying to understand how the Environment Act 2021 affects your business, it helps to break it down into its seven core parts.

These sections introduce a set of guiding principles, such as the “polluter pays” principle, and require the government to set long-term, legally binding targets for areas including air quality, water, biodiversity, and waste.

They also established the Office for Environmental Protection (OEP), an independent body responsible for holding public authorities to account.

Part 3 is where the Act is most relevant to packaging. This section focuses on waste and resource efficiency and provides the legal foundation for major reforms to the management of materials, including packaging.

It introduces powers to expand Producer Responsibility Obligations and enables Extended Producer Responsibility (EPR), under which businesses are required to cover the full cost of managing packaging waste at end-of-life.

In addition to EPR, Part 3 supports the introduction of Deposit Return Schemes (DRS), designed to incentivise the return and recycling of drinks containers. It also enables consistent recycling collections across local authorities, meaning your packaging will increasingly need to align with a more standardised national system.

Another important element of Part 3 of the Environment Act 2021 is the move towards digital waste tracking.

This is intended to improve the transparency across the waste chain and reduce waste crime. Still, it also means businesses will need to maintain more accurate and thorough records of the materials that they handle.

The remaining parts of the Act address other environmental priorities, but still have indirect implications for packaging.

Part 4 of the Act focuses on air quality and gives the government the power to introduce product recalls where environmental standards are not met.

Part 5 of the Act targets water quality, specifically reducing pollution from sewage discharges.

Part 6 introduces biodiversity measures, including a mandatory 10% biodiversity net gain for new developments and stronger rules to protect land use and supply chains.

This has implications for raw material sourcing, particularly for packaging that relies on natural resources such as paper, timber, or agricultural inputs.

Part 7 of the Act establishes conservation covenants, long-term agreements to protect land and natural resources. They support broader environmental goals set out in the Act.

While all parts contribute to the overall direction of travel, it’s Part 3 that will have the most immediate and measurable impact on packaging operations, costs, and compliance requirements.

If your business places packaging on the UK market, the Environment Act 2021 is highly relevant, as it provides the legal authority for the UK’s packaging waste reforms. While it does not directly regulate packaging design in detail, it enables the systems that do.

The most important of these is Extended Producer Responsibility (EPR), which is built on powers introduced through the Act.

Extended Producer Responsibility fundamentally changes how packaging waste is funded and managed, shifting responsibility from taxpayers and local authorities to the businesses that place packaging on the market.

This means packaging is treated as part of a national resource system and is built into the cost of doing business.

The Act also supports wider reforms such as consistent recycling collections and deposit return schemes, which influence how packaging is collected and processed across the UK. These systems directly affect how your packaging performs at the end of life.

For your business, this creates a clear shift in packaging decisions. They now sit within a regulated environmental framework, and aren’t just a supply chain decision.

If your business is involved in packaging, you are already affected by Producer Responsibility Obligations (PRO), even if you have not always used that term. These obligations have existed in UK law for decades, but the Environment Act 2021 significantly strengthens and expands them.

Before, producer responsibility obligations required businesses to contribute to the cost of packaging waste recovery through systems the purchase of Packaging Waste Recovery Notes (PRNs). However, this only covered part of the overall cost, with local authorities and taxpayers still funding a large share of waste management costs.

The Environment Act 2021 provides the authority to move the financial to producers with the introduction of the Extended Producer Responsibility (EPR) scheme under producer responsibility obligations that are set out within the Act.

Including the collection, sorting, recycling, and disposal. It’s a shift from partial contribution to full cost accountability, aligned with the “polluter pays” principle set out in the Act.

If you design or procure packaging, the financial impact to your business is an immediate one, the way your packaging is designed and the materials that you choose are all directly linked to your waste costs under Extended Producer Responsibility.

This means the type of packaging that you use will influence how much you pay. Materials that are harder to recycle or have a more complex structure are more likely to incur higher fees compared to those with easy-to-recycle and simple structures.

Now, packaging design has become a sustainability and cost-control issue, and decisions on material selection, weight reduction, and recyclability carry a direct financial impact.

The system also increases the importance of accurate data. To accurately calculate your EPR obligations, businesses must provide data on packaging volumes, materials, and formats used. Providing poor-quality data will result in higher charges.

Over time, the goal is to drive packaging towards simpler, more recyclable formats that fit existing UK collection systems.

If your business operates in packaging, the Environment Act 2021 is not a distant policy development – it’s the foundation of the system that now governs how packaging waste is managed and paid for in the UK.

The Act itself does not set the packaging rules directly, but it does enable the reforms that do – particularly Extended Producer Responsibility. This is where Producer Responsibility Obligations become central, shifting financial responsibility for packaging waste back to producers.

The result is a clear change in how packaging is viewed, and it has become part of a regulated environmental system where design, data, and cost are directly connected.

Looking ahead, businesses that understand and adapt to this shift early will be better placed to manage costs and reduce risk as the regulatory system continues to develop.

If you’re reviewing your packaging, GWP can help you find practical, cost-effective solutions that meet the latest requirements.

Get in touch with the team today to discuss how we can support your business.