In November 2022, the European Commission (EC) unveiled its proposal for a new Regulation on packaging and packaging waste (PPWR). This proposal, aimed at replacing the existing framework established in 1994, addresses the urgent need to harmonise divergent regulatory practices across member states, which have been creating significant barriers in the internal market for packaging, such as obstacles to trade, distortion and restriction of competition. Furthermore, it seeks to foster circularity and eco-friendly packaging, addressing the whole life-cycle of packing, and by setting ambitious targets for companies and Member States (MS) to reduce waste and enhance recyclability.
A Long Way to Go: Intense Negotiations on the Horizon
Last Wednesday 22 November, the European Parliament took a decisive step by adopting its negotiating position on this proposal. This development signals a pivotal moment in the legislative process, setting the stage for the Trilogue with the EU Council, expected to commence in Q1 2024 under the Belgian Presidency. The considerable number of amendments, more than four hundred, adopted by the Parliament, as well as conversations with institutional and industry stakeholders, anticipates intense negotiations, reflecting the proposal’s complexity and controversy.
Commission Proposal: Aiming for an EU-wide Circular Economy
Although it is expected that the specific targets and figures agreed by the Trilogue should substantially differ from the EC’s Proposal, below a summary of the PPWR’s policy measures:
- Packaging Design: Mandating that all packaging should be designed to be recyclable by 2030, with a transition to being effectively recycled at scale by 2035, and that the weight and volume of packaging be minimised;
- Extended Producer Responsibility (EPR): The modulation of financial contributions are based on recyclability and recycled plastic content to align with the new packaging design requirements;
- Minimum Recycled Content in Plastic Packaging: Setting obligatory targets for recycled content recovered from post-consumer plastic waste by 1 January 2030, varying with the type of polymer and its usage;
- Labelling: Label marking containing information on material composition to ease consumer sorting, its reusability and the share of recycled content;
- Re-use and Refill: Setting sector and product specific mandatory targets for reusable packaging within a system for re-use or refill;
- Deposit and Return Schemes (DRS): Setting up of deposit and return schemes for single use plastic and metal beverage bottles and containers;
- Targets for MS: Establishing recycling and waste prevention targets, with particular emphasis on plastic packaging.
Industry Response and Stakeholder Insights
Many of the proposed measures are not consensus-based. For example, the recycling industry advocates that packaging with high circularity performance should be exempt from reduction and reuse targets, arguing for a nuanced approach that balances environmental aspirations with practical industry capabilities.
Another example is the ongoing debate on reusable packaging solutions in take away and fast food restaurants. While environmental organisations advocate for a prohibition on single-use packaging, mirroring France’s approach, industry organisations insist that reusable packaging would predominantly rely on plastic and involve high energy and water consumption.
In its vote, the EU Parliament appears to have addressed some of the industry’s demands e.g., adjusting the provisions on reuse, lifting the ban on certain single-use packaging, postponing the enforcement of mandatory recycling targets.
Legal and Tax Implications: Navigating the New Landscape
This paradigm shift in packaging norms brings excessive legal and tax considerations along companies’ value chains. Stakeholders must now closely examine the implications of enhanced EPR systems, potential plastic taxes, and other regulatory mechanisms designed to incentivise sustainable packaging on operations.
For all businesses, the PPWR will entail the need to reassess the packaging strategy, investments in green supply chain solutions, and compliance with new legal requirements. Compliance and reputational decisions are at stake, and are linked to sustainable choices and global targets.
This article is made available by PwC for educational purposes only as well as to give you general information and a general understanding of these matters. Any content of this article should not be used as a substitute for competent professional advice.