The UK’s Extended Producer Responsibility scheme entered its second operational year in April 2026, and with it came eco-modulation: the mechanism that adjusts the fees producers pay based on how recyclable their packaging is. Under the Recyclability Assessment Methodology (RAM), packaging is rated red, amber, or green.
From 2026, red-rated packaging attracts a 20% fee uplift above the amber base rate, while green-rated packaging receives a 9% reduction. This financial differential makes the recyclability of packaging, including the labels applied to it, a cost issue, not just a sustainability one.
Because the first modulated EPR invoices reflecting 2025 data are expected from October 2026 onward, the window to influence the 2026 fee position through packaging redesign has already closed. The packaging already on the market determines the fee.
What has not closed is the opportunity to influence future fee cycles. The label is one of the components that RAM assesses separately within a packaging format, and label specification choices have a measurable impact on the recyclability rating of the overall packaging system.
How Labels Affect RAM Ratings
RAM does not assess packaging as a single unit. Each component, including primary container, closure, label, sleeve, and adhesive, is evaluated separately, and the overall rating reflects the interaction of all components within the recycling stream. A recyclable primary pack can receive a lower RAM rating if its label introduces contamination, interferes with sorting, or reduces the quality of the recyclate output.
Label material matters. Full-wrap labels on plastic bottles can prevent correct material identification at automated sorting facilities if the label obscures the resin identification code or IR spectroscopy reading.
Oversized paper labels on HDPE or PET bottles can cause fibre contamination in plastic recycling streams. PVC labels on PET bottles are a known compatibility issue. Labels that cover more than 60% of a bottle’s surface area may affect the overall recyclability assessment of the format.
Adhesive specification also matters. Labels that do not wash-off cleanly during standard hot-caustic bottle washing processes can affect the recyclate quality of the primary material. Wash-off adhesive label systems preserve primary material recyclability and support green or amber RAM ratings.
What On-Pack Recycling Labels Need to Say
The UK’s mandatory on-pack recycling labelling has been paused while Defra aligns with PPWR guidance expected in 2026. Voluntary adoption of the OPRL scheme (using “Recycle” or “Do Not Recycle”) remains the prevailing standard and is explicitly aligned with RAM outcomes.
Packaging that has been RAM-assessed as green-rated should carry “Recycle” labelling; red-rated packaging should carry “Do Not Recycle”. A mismatch between the RAM assessment and the on-pack recycling claim is both a CMA green claims exposure and a signal that either the assessment or the label needs to change. Keeping the RAM assessment, the on-pack claim, and the label specification in alignment is the practical and financial priority for any producer managing EPR obligations in 2026.