In a decisive development for Australia’s packaging value chain, the Australian Packaging Covenant Organisation (APCO) has confirmed it will not introduce the proposed Extended Producer Responsibility (EPR) fee model in FY27. The decision follows months of structured consultation with nearly 220 members and key stakeholders across the industry, and reflects widespread calls for more regulatory clarity, governance rigour, and sector-specific nuance.
While industry remains firmly behind the intent of EPR, APCO CEO Chris Foley said it was clear the proposed model needed more time and refinement to be fit-for-purpose. “We heard you,” Foley said in a letter to members. “As a result of your feedback, we can confirm that we will not introduce an EPR fee model in FY27. While our commitment to delivering an EPR model that works has not wavered, we appreciate that this will take more time.”
Industry supports intent – but demands detail
The EPR proposal was designed to establish a fair, transparent mechanism for co-investment in the systems required to achieve Australia’s National Packaging Targets – particularly in areas such as collection, sorting and reprocessing. But while the principle of producer responsibility received broad support, stakeholders emphasised that good intentions alone are not enough.
“Industry told us loud and clear that a strengthened EPR system must go beyond intent,” said Foley. “Ambition must be matched by clarity, capability and commitment across the entire system – not just from those already doing the right thing.”
Members raised concerns about the timing of the new model, the scale of potential fee increases, and the lack of certainty around how new revenue would be allocated or governed. They also cautioned against adding reporting burdens without appropriate support or justification.
Seven core priorities from the consultation
From the roadshows, webinars and direct engagements between March and May 2025, seven recurring themes emerged as priorities for the sector:
1. Regulatory certainty: Industry needs government to provide certainty around reform. It urged APCO to avoid duplication and confusion, and to align with a nationally consistent framework that government has yet to fully articulate.
2. Fair and practical implementation: Members called for a model that reflects operational realities, is equitable across sectors, and genuinely drives results.
3. Proportionate fees: Many respondents flagged that fee increases must be underpinned by a clear value proposition – especially for smaller businesses or those already investing in sustainable packaging.
4. Stronger governance: Calls for transparency included clear rules for oversight, regular reporting and defined channels for member input.
5. Efficient reporting: Members highlighted the risk of increased data burdens and requested fit-for-purpose assurance requirements and capability-building support.
6. Sector-specific design: From compostables to food safety or therapeutic goods, stakeholders warned that a one-size-fits-all model risks excluding key nuances.
7. Time to transition: Many businesses are already planning budgets and systems for 2027. A longer lead time and phased implementation will be essential to enable a smooth transition.
As one member noted during the consultation, “We support EPR – but not at any cost. If it’s to succeed, it must be realistic, evidence-based, and trusted.”
What happens now?
For FY27, APCO will continue with the existing turnover-based fee structure, incorporating CPI-based adjustments and cost recovery requirements as needed. The proposed ‘base fee + EPR fee’ model will not be activated.
In parallel, APCO will now focus on refining its approach in collaboration with industry and in line with emerging government policy. A full summary of consultation findings is expected in the coming months, followed by a revised roadmap outlining next steps.
The updated timeline sees the current structure remain in place until at least July 2027, with the next stage of planning shaped by the feedback received this year.
A pause, not a pivot
Despite delaying implementation, APCO remains committed to establishing a long-term, sustainable EPR framework for packaging in Australia.
“Despite significant industry effort and voluntary commitments, our National Packaging Targets remain out of reach,” Foley said. “We need a model that’s fair, practical and well-designed – and we need to get it right, not rush it. That’s what we’re focused on delivering, in partnership with industry.”
As the sector calls for clear government signals on the broader regulatory landscape, the onus is now on APCO to build confidence in a system that works – and to bring members along every step of the way.
