Environmental policy experts at Ecoveritas have warned the UK manufacturing sector is facing increasing uncertainty around recycling, as new analysis shows the cost of complying with government-backed regulations is soaring by millions of pounds every year.
Ecoveritas, which has advised major British manufacturers on environmental regulations since 2003, has warned that current regulations are creating significant concern among producers, with widening cost volatility threatening to undermine confidence in recycled materials.
It is thought that UK businesses will face a collective bill of over £1.2bn this year to comply with a raft of new and existing compliance schemes, including the Packaging Recovery Note (PRN) system.
First introduced in 1998, PRNs allow large businesses to demonstrate compliance with recycling requirements by purchasing “credits” proving the materials they use have been recycled. PRNs can be traded between companies, with prices influenced by material availability, infrastructure capacity and regulatory demand.
2025 data collected by Ecoveritas shows that across the year, PRN prices showed exceptional volatility, with values fluctuating by as much as seven times within the same compliance year. PRNs for plastics ranged between approximately £62 to £440 per tonne (609%), for steel from £3.50 to £21 (500%), and for paper from £60 to £110 (83%).
James Walkerdine, Managing Director of Ecoveritas (pictured), said:
“The cost of compliance is being felt more heavily by producers at a time when regulations are getting stricter and the price of doing business is also going up.”
“This is making it harder for businesses to plan and invest with confidence, particularly when companies are endeavouring to use more sustainable and recycled materials.”
Based on its own analysis of packaging data across the sector, Ecoveritas estimates that PRNs could generate approximately £600m in total market value in 2026, roughly double the estimated value recorded in 2024. However, industry modelling suggests that the full cost of compliance could surpass £1.2bn in 2026.
The firm has warned that rapidly rising costs may undermine confidence and investment in recycled materials if not supported by clear data and supply chain understanding.
“Where data assessment and commercial outcomes sit closely together, there is a potential risk that incentives may not always be fully aligned,” James added.
“Clearer governance and role definition would strengthen trust, reduce unnecessary cost inflation and support the long term credibility of the UK’s recycling system.
“When businesses fully understand how packaging flows through their supply chains, they can ensure they are paying what they should, no more and no less.”