The Packaging and Packaging Waste Regulation (PPWR) in Europe is aimed at developing a more harmonized and sustainable packaging policy in Europe. However, while the regulation is being implemented, there are growing fears regarding the administrative burden that could be put on smaller companies as a result of some of the PPWR's provisions.
There have been calls in Germany for changes to be made to the PPWR. This includes changes related to the relaxation of some PPWR provisions for small retailers, changing authorized representatives’ requirements and more time for the new producer registration system to be implemented. The changes are still suggestions so businesses need to prepare for the PPWR as it is right now.
Why Germany Wants Changes to the PPWR
Germany continues to work in support of the PPWR environmental aims, such as recycling, reuse, less packaging waste and developing a more circular economy in Europe. The point here is not the goal of the regulation, but rather the question of the reasonableness of some of its administrative provisions for small companies.
It especially turns into an important problem when the firm sells its packed products to several EU member states. Even with small sales in each single country, the firm will have to go through several steps of registration, reporting, extended producer responsibility and appointment of an authorized representative, all of which will cost quite a lot, considering the quantity of packaging put on the market.
Proposed Relief for Smaller Retailers
Another proposal put forth by Germany relates to providing an exemption to traders who place less than 10 tons of packaging annually on the market. In accordance with this proposal, these businesses will no longer be obligated to designate an authorized representative in each individual EU Member State in which they market products directly to the consumer.
Such a proposal would make a huge difference in the level of administrative work done by small and medium-sized businesses. This will give the smaller businesses the opportunity to function without having to establish representative positions in various countries despite their low sales volume.
Why Cross-Border E-Commerce Is a Major Concern
One such field is cross-border e-commerce in which an e-retailer can be located in one country but sell their packaged products to buyers in many different EU member states, hence the compliance requirement changes according to the location where the packaging is put in the market.
Larger organizations may have compliance processes in place to handle the requirements of different nations. However, smaller organizations might feel that such requirements may be difficult to deal with as they sell only small amounts of product in different countries.
A 10-Tonne Threshold Could Change the Compliance Burden
The proposed German 10-tonne threshold aims to differentiate between smaller amounts of packaging and commercial ones. The underlying logic here is that companies placing limited amounts of packaging on the market do not have to be subjected to similar levels of bureaucracy as companies which distribute much larger amounts of packaging across Europe.
In case the threshold is used, it may be especially relevant for niche retailers, small-scale manufacturers, D2C companies, and businesses that are exploring their opportunities in the European market. It is important to remember, though, that such a threshold cannot be considered an existing exemption, as any changes have to enter the EU regulatory environment.
Germany Also Wants More Time for Producer Registration
Other significant elements included in the proposal made by Germany relate to the introduction of a new registration scheme for producers. In particular, the German Government has stated its request for delaying the implementation of registration under the new regime to mid-2028 to give more time to develop and introduce a centralized European registration scheme.
According to this suggestion, firms should not have to spend a large amount of money on a temporary scheme if a better harmonized European scheme is going to be introduced soon. Such an approach would help to eliminate duplicate efforts and facilitate producers who operate in several Member States.
Why a Centralized Registration System Matters
Centralized registration will help PPWR compliance to be more streamlined for companies who are operating in various parts of Europe. Rather than having to deal with different national frameworks that can vary in terms of their requirements, businesses would have the ability to operate under one European framework.
This will become very beneficial for e-commerce firms, multinational retailers, and manufacturing firms selling their products in several Member States. Harmonization of registration can lead to less duplication of information and facilitate compliance as business grows into other parts of Europe.
Germany Cannot Change the PPWR Alone
PPWR is an EU Regulation, which means that Germany is unable to amend any of its main provisions by making alterations to the national law. In case there are any alterations regarding provisions such as authorized representatives and producer registration, the matter must be resolved at the European Union level.
Hence, Germany seeks the assistance of other EU Member States in promoting its proposals. However, until the amendment is officially approved, companies should base their actions upon the existing regulatory requirements.
What the Proposal Could Mean for Small Businesses
If the German proposal is adopted, small enterprises will find it easier to work within a proportional compliance structure. Businesses that produce minimal amounts of packaging will have less administrative work when marketing their products in other EU member states.
It would be especially relevant to smaller online merchants, specialized manufacturers, direct-to-consumer marketers, and firms expanding into new markets within Europe. For these firms, simplifying their administrative processes across each country would allow them to better reach customers in the EU while not hindering more sustainable packaging practices.
What Businesses Should Do Now
Despite the above changes, businesses should not stop preparing for PPWR. The recommendations from Germany have not yet altered the law, and the businesses still need to be aware of and comply with the legal requirements they are subject to.
Businesses need to figure out where they position the packaging into the market, determine the legal role of their company in each country, measure the volumes of the packaging, and keep track of information about the packaging materials, weight, format, providers, and market.
Accurate Packaging Data Is Becoming More Important
The German proposal also illustrates how accurate packaging information is becoming a critical element in compliance with PPWRs. Where thresholds, such as the 10-tonne exemption mentioned above are implemented, organizations must have clear information as to what volume of packaging they are putting on the market and where those volumes lie.
Where organizations struggle with inaccurate spreadsheet data and fragmented information, it can become difficult for them to ascertain their obligations properly. The collection of information in a structured manner will allow organizations to adapt to changing regulations and prepare relevant reports on the same.
PPWR Compliance Will Continue to Evolve
PPWR establishes the regulatory framework in general, while implementation will further develop via guidance, delegated acts, implementing measures, and possibly also legislative amendments. The recent German proposal serves as an example of how practical implementation questions can result in further regulation discussion.
Companies should thus regard compliance with PPWR regulations as a process instead of a project. The compliance system needs to be flexible enough to allow changes in the regulatory framework without forcing organizations to redesign their whole packaging data management and reporting system every time there is a change.
The Environmental Objectives Remain Unchanged
German officials have pointed out that their proposals are by no means designed to undermine the environmental goals of the PPWR. On the contrary, the Government is still in favor of increasing recycling, enhancing re-use and circularity of packaging, and minimizing dependence on primary materials.
The issue under discussion is rather one of proportionality. It is about achieving environmental targets without imposing unnecessary red tape on businesses that release relatively modest amounts of packaging into the European market environment.
What Happens Next?
The proposed amendments will require backing from other EU Member States if Germany is going to push them through. The negotiations on the European level will decide whether the 10-tonne threshold, the proposed registration postponement or other simplifications will be incorporated into the PPWR framework. Those businesses that are engaged in cross-border trade should closely watch all the developments on that front. The amendments will finally make it easier for small firms to comply, but before that happens, PPWR requirements have to serve as the basis for compliance.
Conclusion:
The German demand for PPWR exemptions raises the question of how to balance environmental results and proportional administration within the framework of European packaging regulation. The suggested measures would be very useful for small companies operating in cross-border e-commerce.
Currently, however, the suggested measures do not impact existing obligations. Companies need to prepare for the PPWR, collect packaging and market information, and track the situation on the EU level in case these simplifications become applicable in Germany.
