Waste Packaging Fraud: Investigations and Prosecution Risks

Dawn Raids 

In March 2026, Environment Agency (EA) officers worked alongside West Midlands Police to arrest a suspect in Birmingham for conspiracy to defraud and money laundering in connection with the alleged unlawful selling of more than £2 million in packaging waste credits for exports suspected of never taking place.

That arrest followed a similar raid the previous month, when two individuals in Penzance were arrested in connection with alleged waste packaging fraud worth more than £6 million. Those involved are suspected of selling credits for packaging they claimed to have reprocessed, when a significant proportion of the alleged reprocessing is suspected never to have taken place.

The EA, having faced widespread criticism for not doing enough to effectively tackle a “plague” of waste crime, claims that these raids are sending a clear message that it will “hunt down” waste criminals. There are likely to be more raids and arrests to follow. 

The following is a primer for those operating in the packaging waste and recycling sectors who may be impacted by these investigations. 

The Regulatory Framework

The Packaging Producer Responsibility Regulations[1] place an obligation on UK producers of packaging waste – such as glass and plastic packaging – to cover the cost of recycling and disposing of that waste. The system operates through Packaging Waste Recycling Notes (PRNs) and Packaging Waste Export Recycling Notes (PERNs), which are issued as evidence that packaging has been recycled – by UK-based accredited reprocessors in the case of PRNs, and by accredited exporters sending material overseas in the case of PERNs.

Obligated businesses must purchase sufficient PRNs or PERNs to demonstrate compliance with their recycling obligations. The 2024 Regulations apply to any UK business that is not a charity, has an annual turnover of £1 million or more, handles more than 25 tonnes of packaging, and carries out relevant packaging activities[2] – including supplying branded packaged goods, importing packaged products, owning an online marketplace, or supplying empty packaging.

PRNs are traded on an open market, with prices fluctuating according to supply and demand. This commercial value creates the key fraud risk. 

Fraud Risk

Because the PRN system is self-reporting – with accredited bodies uploading details to the National Packaging Waste Database and being issued credits accordingly – it is vulnerable to fraud. The principal methods appear to include: issuing PRNs or PERNs for material that has actually been landfilled or sent for energy recovery; double counting the same bale of material; and passing off non-packaging waste as packaging waste.

The EA has reportedly observed fraudulent information being uploaded to the National Packaging Waste Database and evidence of consignments being bulked out with contaminated or non-recyclable materials – a particular problem with exporters, where accountability reduces once material has left the UK. The EA believes that criminal gangs have infiltrated the sector specifically to exploit the monetary value of packaging credits, diverting money away from legitimate businesses and investment in the UK's recycling infrastructure.

There is a range of fraud offences that apply to corporates and individuals. Reforms of corporate criminal liability including the recently introduced failure to prevent fraud offence for “large” organisations and the introduction of the “senior manager” test for fraud and other economic crimes[3] significantly lower the bar for corporate prosecutions. 

The EA has described the investigations as “highly complex” and there is likely to be considerable work required to distinguish criminal from legitimate business, with the position complicated by money laundering legislation. 

Money Laundering 

In both recent arrests, money laundering is suspected alongside the underlying fraud. The principal money laundering offences under the Proceeds of Crime Act 2002 – including concealing, transferring or converting criminal property; entering into arrangements to facilitate another person's acquisition, retention and use of criminal property; and acquiring, possessing or using criminal property – carry a maximum sentence of 14 years' imprisonment. 

These offences are extremely broad. Anyone who receives payment, transfers funds, holds accounts through which fraud proceeds pass, or assists in making money appear legitimate will have money laundering risks, even without full knowledge of the underlying fraud. 

The mental element of the principal offences requires that the person committing the prohibited act either knows or suspects that the property concerned constitutes or represents the proceeds of criminal conduct (“criminal property”). For “suspicion”, a person need only have thought there was a possibility, more than fanciful, that property was the proceeds of crime. (R v Da Silva [2006])

The EA's Economic Crime Unit has said that it will “follow the money”, conducting financial investigations across the sector. This means real risk for directors and finance staff of businesses who handled relevant funds, intermediaries who structured transactions, compliance scheme operators who processed payments, and connected persons who received transfers. 

Investigation Powers

By notice in writing, the EA may require producers, scheme operators, PRN and PERN issuers and traders, and reprocessors and exporters to maintain records and furnish specified information within a set time period. 

The scope is extensive: signed waste supplier declarations, purchase orders, invoices, delivery notes, payment records, weighbridge tickets, bills of lading, customs declarations, extruder logs, timed loading photography, and evidence of sampling and inspection may all be required. Failure to comply without reasonable excuse, or furnishing information that is false or misleading – knowingly or recklessly – is a criminal offence under the Regulations.

The EA also holds wide investigation powers under section 108 of the Environment Act 1995, including the power to enter premises, make examinations and investigations as necessary, and inspect and take copies of records. Obstructing an officer is a criminal offence under section 110 of the Act.

As the recent arrests demonstrate, the EA can also work closely with the police. Individuals under investigation can therefore be arrested with full police powers, have their homes and business premises searched, and be interviewed under caution as suspects. 

Next Steps

The EA has made clear that its enforcement activity is intensifying and that it intends to “follow the money”. If your business has received an information notice, been contacted by investigators, or operates in the packaging waste supply chain and you have concerns about the matters raised, you should seek expert legal advice

[1] The Producer Responsibility Obligations (Packaging Waste) Regulations 2007 were recently replaced by the more expansive Extended Producer Responsibility regime under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024.