PPWR unpacked - Part 2: "All packaging shall be recyclable"

In this second part of the blog on the EU Packaging Regulation (PPWR), we look at what regulations the EU Commission is proposing on the recyclability of packaging. We examine which proposals make sense and which do not and what is missing. In the subsequent third part of this blog, we then turn to the highly controversial specifications for the minimum recycled content quotas for plastic packaging. If you have missed the first part in which we assessed the legislative process and the people involved, here you can catch up.

The Proposal

It all starts with Recyclability

The recyclability of packaging is rightly placed at the beginning of the proposed regulation, because obviously only recyclable packaging can be recycled in an economic and energy-efficient manner and the material thus be reused. Recycling packaging is an important contribution to the circular economy. In this way, the EU can reduce its dependence on fossil raw materials and its CO2 emissions. According to the New EU Circular Economy Action Plan adopted in 2020, all packaging in the EU internal market “is reusable or recyclable in an economically viable way by 2030”. There are national standards to assess whether a packaging is recyclable, e.g. the German Minimum Standard. What is missing are harmonised requirements for the recyclability of packaging across the EU. With regard to the envisaged transformation towards a circular economy, companies need a reliable legal framework for design-for-recycling innovations. The Commission has recognised this.

Criteria for Recyclability

The basic concept of when packaging is considered recyclable is outlined in Article 6 of the Commission proposal. Unfortunately, there are no criteria in the proposal to guide companies in their packaging design. The Commission has limited itself to describing only the framework and wants to define the concrete criteria only later.

In principle, according to the proposal, packaging should be considered recyclable if it fulfils the following five conditions, which are staggered over time:

From 12 months after entry into force:

1.???Packaging is separately collected and

2.???Sorted into defined waste streams without affecting the recyclability of other waste streams and

3.???Can be recycled so that the resulting secondary raw materials are of sufficient quality to substitute the primary raw material.

These three criteria, which are to apply as early as one year after the regulation comes into force, i.e. possibly as early as 2025, will presumably have little relevance in practice because the Commission does not describe what they mean specifically for individual companies and has delegated the matter to the member states.?

From 2030:

4. Packaging is designed for recycling. The Commission wants to define detailed design for recycling criteria for each of the 30 (!) packaging types mentioned in Annex II at a later stage. The proposal does not contain any time frame for this.

From 2035:

5. Packaging can be recycled at scale. The Commission also wants to wait until later to define what this means, but again without specifying a time frame. Among other things, the following criteria shall be taken into account: Quantity of packaging placed on the market, quantity of separately collected packaging and recycling rates (each criteria differentiated for all 30 packaging types and for EU and Member States) as well as the sorting and recycling infrastructure capacities in the EU by packaging type. We will come to the bureaucratic burden of the new regulations later.?

Packaging Recycling Performance Grades

Even though concrete design-for-recycling criteria are lacking, the Commission proposes five Recycling Performance Grades, following partly the RecyClass concept (link), depending on the mass percentage of a packaging that is recyclable:

Packaging that is less than 70 per cent recyclable by mass is to be banned from 2030. All other packaging is considered recyclable and shall not be prohibited, restricted, or impeded by Member States.

Recycled at scale

From 2035, according to the Commission proposal, only packaging that is “recycled at scale” should be allowed. This criterion is defined as “collected, sorted and recycled through installed state-of-the-art infrastructure and processes covering at least 75% of the EU population". A look at other language versions shows that percentage refers to the collected packaging waste (e.g. German version: "die die Verpackungsabf?lle von mindestens 75 % der Bev?lkerung der Union abdecken").

Exemptions for innovative packaging and medical products

Because new packaging may not be able to be recovered from the outset in existing sorting and recycling infrastructures, the Commission proposes an exemption for innovative packaging from the above five criteria for a period of 5 years after being placed on the market. According to the proposal, "innovative" means packaging that offers "significant improvements" in the core functions of packaging and in demonstrable environmental benefits.

Also, criteria shall only apply from 2035 for primary packaging that is in direct contact with medicinal products, as well as contact-sensitive plastic packaging of medical devices and of medical devices for in vitro diagnostics.

Financial incentives should reward recyclability

In addition, the Commission proposes that the licence fees to be paid by the producers within the framework of Extended Producer Responsibility should be modulated according to the recycling performance grades - already 12 months after the entry into force of the Regulation.

In the course of last-minute changes to the text, a special provision was inserted for plastic packaging, according to which the recycled content is (also?) to be taken into account for plastic packaging when calculating the licence fee.

Currently, such eco-modulation fees for packaging apply in only 6 of the 27 EU Member States. Especially in countries where there are many EPR organisations and they are in intense competition with each other, such as Germany and Poland, there is currently no effective eco-modulation.

Evaluation of the proposal

The proposal on recyclability is strangely lifeless. The Commission has merely delivered the skeleton for a harmonised definition of recyclable packaging. Bringing it to life will take considerable effort, for the Commission, the member states and the companies:

Wave of bureaucracy looming

The Commission faces a mammoth task: criteria for design-for-recycling and "at scale" must be established for each of the 30 packaging types. Maybe certain types of packaging can be dealt with together, but it will still be a task for years, even if CEN standards will be available by mid-2025. In addition, rules to harmonise the calculation of the eco-modulation for EPR-fees have to be established. Member states are also faced with an avalanche of statistical and reporting obligations: For each of the 30 types of packaging, they must determine how much of it was put on the market, how much was collected separately and how much was recycled. The existing statistics cover only a fraction of the 30 types of packaging. For businesses, the proposal brings little clarity: Companies cannot be sure which packaging can be put on the market in 2030. For this, they have to wait for the delegated acts of the Commission. According to the proposal, once the criteria have been developed, companies should prove their compliance through a "conformity assessment procedure" and a comprehensive technical documentation of the packaging (according to Annex VII).?The bureaucratic burdens for SMEs in particular will therefore increase considerably.

Getting financial incentives right

Effective financial incentives are a decisive lever for better recycling of packaging. The proposal for an eco-modulation is ambitious, even if the Commission does not propose any concrete licence fees, which would be very difficult in view of the very different levels in the EU. However, setting up national eco-modulation schemes takes years. In addition, there is up to date no model for an eco-modulation in a system of competition between EPR organisations that has been tested in practice.

With regard to the criteria to be used to differentiate the licence fees for plastic packaging it unfortunately remains unclear in the Commission's proposal which are to be used (recyclability and/or recycled content, see for Article 6 (7(d)) and (11) and Article 7(6)). The Commission's own impact assessment recommends that the licence fee be based solely on recyclability - for all packaging. A calculation based on the recycled content was rejected at an early stage in the preparation of the impact assessment - for good reasons: For instance, the requirements for the use of recyclates in food packaging are much stricter than for other types of packaging. For example, it is in principle only allowed to use mechanically recycled PET plastics from a deposit bottle system in food packaging; other mechanically recycled plastics are not allowed in food packaging. Also, the costs of using recyclates in packaging are often higher than the benefits of lower licence fees, so that the financial incentives come to nothing, for example like in France.

Therefore, since recyclates are not yet available in sufficient quantities for many plastic packaging, e.g. for food or hazardous goods, the licence fees within the framework of extended producer responsibility should also be graded for plastic packaging exclusively on the basis of their recyclability.

Plastic packaging can do more

The basic concept of recycling performance grades according to the recyclable mass fraction of a packaging generally meets with approval. However, the German IK has proposed to increase the requirements for recyclability, concretely to increase the minimum recoverable mass fraction of a packaging from 70 to 80 mass percent in order to limit design-related material losses in recycling to a maximum of 20%. The background is that composite packaging, e.g. made of paper-plastic or aluminium-plastic, currently has a plastic content of up to 30% for functional reasons. This plastic content is irretrievably lost when the composite packaging is recycled, which contradicts the goal of a circular economy. In addition, this makes it even more difficult to meet the plastic recycling quotas as well as the minimum recycled content quotas for plastics in packaging. According to the IK experts, the 80%-limit can be achieved without discrimination by all packaging formats and materials without restricting the functionality of the packaging.

"At scale" criterion should be based on industrial infrastructure instead of "75% of EU population"

The Commission's proposal to base the at-scale criterion on the EU population (75%) is not practicable due to the complexity and excessive reporting obligations of the Member States. Defining a minimum rate for the separate collection of a packaging type as a market requirement also contradicts the requirement for member states to ensure that all packaging is collected separately nationwide. Furthermore, the 75%-criterion is not meaningfully applicable to industrial packaging, as industrial packaging is not accumulated in private households but in industrial and commercial enterprises and the extent of its recycling cannot therefore be measured on the basis of a proportion of the population. The Regulatory Scrutiny Board of the Commission has even recommended to consider abandoning the "at scale" criterion due to the lack of practicability (see Opinion of 30.9.2022, link). See here for a deeper look into the discussion about this criterion.

It is therefore recommended to base the definition of "recycled at scale" on the availability of recycling facilities on an industrial scale, following e.g. the example of the German minimum standard.

Industrial packaging is different

The special conditions of industrial packaging should be taken into account when defining the design-for-recycling criteria. For example, the machine-based, NIR-supported material recognition that is used in sorting centres for household-related packaging does not play a role for industrial packaging waste treatment. Also, some types of material, such as EPS, are recycled to a much higher degree from commercial packaging collection than via household packaging collection.

Therefore, separate design-for-recycling criteria need to be developed for such packaging and commercial and industrial packaging should be added to the packaging types in the Annex of the proposal.

Stay tuned, because in the next episode we will look at the Commission proposal for minimum recycled content quotas for plastic packaging exclusively.

See for Part 1 - People and Process: link.