The UK Packaging Industry is Set to Face Hurdles Due to Compulsory Energy Audits

The UK packaging industry is experiencing an upward growth trend for its packaging products with this increase in demand due in some part to growing investment in the housing and construction domain.

An increase in the number of retail chains and increases in the number of routes to market has also added additional demand for the packaging of their products.

Experts predict that the UK packaging sector will grow at a yearly rate of 4% till the end of 2018. As the industry experiences steep growth, the pressure on it to become eco-friendly is also on the rise. Energy prices are also predicted to rise further into the future which will make the balance of being cost efficient versus being economically supportive a challenge for some companies.

The Impact of Compulsory Energy Audits on UK Packaging Industry
The UK packaging sector is set to face some challenges as the government has announced plans to introduce compulsory energy audits for businesses. This could mean that packaging companies will need to invest time and resources into ensuring that their operations are energy-efficient, or face penalties.

In the UK, the new Energy Savings Opportunity Scheme (ESOS) has been introduced by the UK government. This is typically a savings identification and energy assessment method for larger companies in the packaging market. These new rules are forcing bigger organisations within the UK packaging manufacturing industry to conduct compulsory energy audits and will encourage packaging companies to become smarter concerning their energy consumption. However, many fear these measures will heavily impact company finances.

The packaging market is a vital part of the UK economy, and the introduction of energy audits could help to improve its environmental performance and reduce waste. However, it is important to note that these audits can be costly and time-consuming and may place an additional burden on already stretched resources.

The packaging industry UK will need to work closely with the government to ensure that the implementation of compulsory energy audits does not adversely impact its operations. The sector must work to find a balance between meeting environmental targets and ensuring that its businesses can remain competitive and not affect annual sales.

When and which Companies Need to Conduct Energy Audits
The new rules mean that if a packaging company has more than 250 employees or an annual turnover of £38.9m or over it will need to comply with the new rules and its balance sheet must also show over £33.5m. A packaging business has only six months’ warning to adhere to this new rule and prepare themselves for upcoming audits.

If a business does not adhere to these audit guidelines that have been set by 5th December this year, it will face huge financial penalties that could end up running onto tens of thousands of pounds.

Some recent studies have shown that on average a firm required to comply with ESOS could end up saving 13% on its energy costs on the basis that it minimises energy consumption in line with the audit findings. This means that companies in the packaging industry can enjoy the main benefits of ESOS if it doesn’t end up being seen as the usual ticking box exercise.

The worldwide packaging sector is a huge market that continues to experience continuous and rapid growth. If packaging companies comply with the ESOS audit diligently, the industry will soon be the leading sector in terms of energy consumption reduction rates and set a positive example to other industries.

Energy Saving Scheme Means Money Savings?
The actions should not be overlooked as just gaining green credentials, which have become a badge of honour for consumer packaging products but instead the energy it takes to produce them should be gaining attention. The energy savings scheme should also mean that long-term business growth for companies, including within the packaging sector, should increase as they will be able to save a considerable amount of money due to increased measures of managing energy consumption within their business processes and within the packaging supply chain.

Conclusion: A Welcome Change?
The news of the introduction of compulsory energy audits should encourage change among manufacturers, suppliers, and retailers and create not only business activities that encourage sustainability but also keep companies focusing on supporting environmental change throughout their operations including sustainable packaging, reduction of waste, supply chain efficiency, flexible packaging options (including foil packaging, paper, etc) and developments in environmental awareness to their customers. Another advantage of the robust change of being more energy efficient in the packaging sector is not only good for the environment but also can help packaging brands to increase sustainability which may shape a new selling point to potential customers.