PPWR unpacked - part 18: Agreement in Trilogue - or not?

After nine hours of negotiations on the evening of 4 March 2024, the negotiating teams from Parliament and the Council reached a provisional compromise on the EU packaging regulation PPWR. After just two months of intensive negotiations, both sides are confident that they have found an acceptable compromise. Now the review of the compromise by the lawyers and the subsequent adoption at first reading should only be a formality, one might think. But one party is not in favour of the agreement: The Commission. We will take a look at why the Commission did not want to be in the traditional group photo and has not yet commented on the compromise. We will also address the growing concerns regarding the compatibility of the many special rules for plastic packaging and exemptions for other packaging materials with EU law.

It was already late on Monday evening when the Council announced the result of the agreement in a detailed press release, and Parliament soon followed with its press release. On X, Massimiliano Salini announced a victory for the EPP on the re-use quotas for wine and spirits (link). Rapporteur Frederique Ries (RENEW) celebrated the agreement as historic (link) and posted the traditional group photo of the negotiators.

The two representatives of the Belgian Council Presidency (in the background) give way to the MEPs dealing with the matter: from left to right: Salini, Toia, Ries, Canfin, Burkhardt. The person not in the picture is the third member of the group: EU Environment Commissioner Virginijus Sinkevi?ius, who left the room immediately after the end of the negotiations.

Why the Commission is silent and what this means

One reason for its hasty departure: By all accounts the Commission was unable to push through its demand to change the definition of plastic waste and allow recyclates made from waste from non-EU countries to be used entirely. The issue is very important because minimum quantities of recyclates will be prescribed for packaging containing plastics from 2030. The problem is that the Commission itself had originally proposed that recyclates should only be produced from waste from the EU, but not from other countries. Only recently, at the insistence of the Directorate-General for Trade, has it been recognised that this would contravene international WTO rules because, for example, a US chocolate manufacturer would first have to import recyclates from the EU in order to be allowed to market the chocolate with packaging in the EU. For the Commission, a change to this regulation is a must. In Parliament and among the Member States, however, there are some in favour of such protectionist measures, as is also the case with recyclers. However, the fact that the Commission's urgent request for WTO-compliant regulations was blocked on Monday is likely to cause the majority of Member States to frown. Only last week, the majority of them had called on the Council Presidency to find a WTO-compliant solution in line with the Commission. This is likely to cause quite a stir at the next COREPER meeting of the deputy ambassadors of the member states.

The trilogue is not called that for nothing: Although the two legislative bodies, Parliament and Council, ultimately have to reach an agreement, the Commission has the opportunity to amend or even withdraw its proposal until the Council formally adopts a decision on the compromise - and thus remove the basis for the compromise. It is still unclear whether, in addition to the dispute over the definition of waste, other red lines set by the Commission have been crossed . If the Commission sticks to its no vote, the Council would have to achieve unanimity in the vote, which is almost impossible given the still highly controversial proposal. The pressure on the Commission is therefore high.

What have the Council and Parliament agreed on?

Only excerpts of what Parliament and the Council have agreed on are known because a regulatory text with all the compromises is still missing. This so-called 4-column document is usually led by the Commission. In this respect, we have to rely on the statements in the press releases. If you look at the results, you can see the familiar pattern: whenever the negotiators were unable to reach an agreement contentwise, the regulations were limited to plastic packaging or other materials were excluded. This was the case, for example, with the bans, which are now only to apply to "single-use plastic packaging for fruit and vegetables, for food and beverages, condiments, sauces within the HORECA sector, for small cosmetic and toiletry products used in the accommodation sector", whereas the Commission had proposed material-neutral bans. Cardboard packaging is generally to be excluded from the reusable quotas, even though it is produced in very large quantities as waste in the retail, e-commerce and transport sectors, for example. The ban on having suitcases wrapped in plastic film at the airport for protection is also curious, since this is not even packaging.

Alternatively, the member states were often allowed to provide for national exemptions. This can be seen, for example, in the case of reuse quotas: here, Member States are not only to be able to introduce their own reuse quotas that go beyond the EU requirements (according to the Council proposal), but also, according to the compromise, issue general exemptions for their companies, although the conditions for this are still unclear. In future, there will therefore probably be very different reuse requirements in the EU, which will lead to chaos in particular for transport packaging. The fact that the Council negotiators were prepared to allow exemptions at all, despite resistance from many member states, is probably also due to the fact that the study carried out by the Commission's Joint Research Centre (link) on the environmental impact of reuse quotas for certain takeaway packaging did not come to a clear conclusion.

These exemption possibilities provide for a patchwork of different national packaging regulations in the future, for example if Member States exempt their companies from the general ban on plastic packaging for unprocessed fruit and vegetables or simply maintain existing bans. The Council also proposed at the last minute that Member States could exempt compostable packaging from the bans, as well as micro-enterprises. It is still unclear whether these two proposals have made it into the compromise.

Special rules probably violate EU principle of equal treatment

Many of the regulations on packaging bans, reuse quotas, recycling requirements and recycled content quotas only apply to plastic packaging or provide for exceptions for other packaging materials. The IK, together with EuPC and Elipso, therefore commissioned the international law firm Dentons to examine whether these material-specific regulations are compatible with European law. The expert opinion concludes that there is a high probability that they violate the principle of equal treatment under EU law, as there are no objective reasons for unequal treatment. Furthermore, procedural principles were violated as not all relevant facts were taken into account. The associations had therefore called on the decision-makers to create the same regulations for all packaging materials (link).

In contrast to the Single-Use Plastics Directive, affected companies can assert such violations of EU law themselves and have the regulations reviewed in court. It is expected that there will be legal action before the European Court of Justice against the special rules and exemptions and the reuse quotas for transport packaging in particular, simply because there is often no reason and this also contradicts the objectives of the PPWR.

What happens next?

As long as the Commission does not officially object to the compromise, the adoption process will continue: this means that COREPER and the ENVI Committee will first assess the outcome of the negotiations before the institutions' language lawyers analyse the text. There will probably only be final clarity if the new parliament agrees to a compromise. The original plan to finalise the negotiations before the European elections in June 2024 has been abandoned. The reason for this is that the legal review cannot be finalised before the end of April. The current Parliament could therefore still vote on the provisional compromise in its last week of session. However, the final text will probably only be decided by the newly elected parliament, which will not deal with the PPWR until the end of 2024/beginning of 2025.

To be continued...