How to wrap up EU´s proposal on packaging?

Article by Alena Mastantuono, Vice-President of the EESC Transport, Energy, Infrastructure and the Information Society Section

On 30 November 2022, the European Commission proposed the draft packaging and packaging waste regulation (PPWR), which aims to reduce waste and ensure all packaging is reusable or recyclable by 2030. The review contributes to reaching the objective of the European Green Deal and the new circular economy action plan. While it is right to minimize the amount of packaging waste, the proposal lacks detailed impact on human health and environment. It also provides zero guidance for industry how the 2030 goal should be achieved in a sustainable way.

The proposal has reached the European Parliament and the Council. The MEPs in principle agree with the need to reduce the environmental impact of packaging, but are divided on how to achieve this. The reason behind is that the proposal does not provide them with quantitative impact on food security and product waste as stressed by the ITRE Chair in a letter to the EC Vice-president Šefčovič. MEPs who signed the letter asked for more complete assessments of the Commission’s proposed requirements. The civil society is of the same opinion, as missing data might lead to unintended consequences impacting the environment and the safety of consumers negatively.

Big question marks regarding the impact on environment and health

The proposal aims to prevent the generation of packaging waste, reducing it in quantity, and promoting reuse and refill. However, reusing and refilling are far from the best choices, from a climate-change and environmental point of view. Due to long transport distances, compared to local collection and recycling, the increased logistics will have a negative effect. Additionally, cleaning refillable bottles increases water, energy consumption and emissions. In this regard, it is regrettable that the proposal does not include the detailed analysis of impact reuse and refill has on the environment. In the case of reuse, the goals of which are the focus of the regulation and are directly applied to individual businesses, the impact study explicitly states that the necessary data are in principle unavailable. However, the regulation will have a drastic change across the economic sectors. An SME entrepreneur producing drinks in one-way bottles would have to buy the technology to fill 25 % of its beverages into reusable containers. In few years the Commission might find out it is not efficient or friendly for the environment and the investment would be harmed. The entrepreneur may not even be able to invest into the new technology in the first place and only the biggest players in the sector would survive. The competition could be endangered. Industries in transition, as well as employees and small owners in some sectors under scrutiny, are expected to face severe difficulties and income or job losses due to a decrease in total turnover caused by the substitution effect. This should not be neglected by EU decision-makers.

The second aim is to ensure that all packaging on the EU market should achieve 70% recyclability in an economically viable way by 2030 via increased use of recycled plastics in packaging. However, the proposal lacks the definition of packaging recyclability, including the definition of those materials that are safe and suitable for repeated use. The impact study accompanying the proposal assumes that ensuring sufficient quality for food, cosmetic and pharmaceutical packaging will be possible through advanced recycling technologies, especially chemical recycling. However, the impact study calls into question the feasibility of the mandatory use of recycled content in packaging. It explicitly states that these technologies have not yet been developed, the possibility of their commercial operation has not been verified, and neither a regulatory framework has been prepared for them, nor has the method of crediting this regulation towards the fulfilment of recycling goals been defined. Therefore, the extent to which the recycled content is required is determined arbitrarily, because the amount of available recyclate is determined in the impact study precisely on the basis of the assumption of the existence of recycling technologies, whose commercial application is not certain, their effectiveness is not verified and in general they are energy intensive.

Missing details prolong investors uncertainty

Another stumbling block creates the uncertainty for economic entities. The proposal does neither provide clear definition on high-quality recycling, nor the detailed parameters for calculating the reuse of packaging for certain companies which creates a huge uncertainty for investors. The details should be defined in delegated acts which will be presented only after the adoption of the proposed regulation. This framework therefore creates a five-to-seven-year period of expectation when no investment in technologies and production lines will be made. In soft drink sector, reusable packaging would require additional 15 to 22 billion euros by 2030 according to the soft drinks association UNESDA. This money will have to be parked elsewhere.

Moreover, the Commission – by means of delegated act – foresee the possibility to limit or abolish some of the requirements of the regulation, when it turns out that they are too financially demanding, difficult due to a lack of recycled material or technology, potentially hazardous to health, or due to unforeseen negative impact on environment. This threat of possible change in the rules pose a great risk to the investment and innovation cycle, which is so needed for a green transition.

Big polluters might not be motivated enough

The regulation is also discriminatory towards consumers from countries having currently a relatively low per capita production of packaging waste. According to available statistics, the production of packaging waste in countries with very high consumption is up to three times higher than in countries with low consumption, yet all countries are expected to reduce the amount of packaging per consumer by 15%. Therefore, the proposal incorrectly asks the consumers from countries with low packaging waste production per capita to make the reduction effort bigger than those with high consumption. Instead, the requirement for a 15% reduction must be replaced by taking into account also economic activity, industrial production and the income of the inhabitants, not only the number of inhabitants.

Is the regulation the right instrument?

While it is welcome that the Commission wanted to ensure better harmonization, the mix of obligations addressed to the Member States and individual economic entities at once through the regulation does not seem to be the right legal instrument. The direct application of reuse goals to individual companies via regulation makes it impossible to address reuse effectively and can often lead to environmentally negative applications of this obligation. 

Instead of a regulation, two legal acts should be used - directive and regulation. The directive which usually sets targets for Member States and takes into account national differences, could address the management of packaging and packaging waste. The regulation could have basic qualitative requirements for packaging placed to market, requirements for their recyclability and marking.

Measure twice, cut once

The proposal has certainly good intention but the volume of packaging which is growing must be managed in a sustainable way. The proposal should give the right signals to the market which technologies can be used and provide clear definitions which materials are safe and suitable for repeated use for beverage and food packaging. The Council and MEPs should work on clear definitions but also on details of the proposal. More studies and data are needed in order to ensure that recycled packaging will not harm consumers health and that the new rules will not contribute to the increase in CO2 emissions and therefore not contradict with Green Deal goals.