Proposal for Revision of EU Legislation on Packaging and Packaging Waste
On 30 November 2022 the European Commission (EC) published a Proposal for a Regulation on Packaging and Packaging Waste (the Proposed Regulation) to tackle the ever-growing amount of packaging waste, the low levels of recyclability, and the re-use and uptake of recycled content.1 While there are various exceptions for manufacturers of medicinal products and medical devices, if adopted, the Proposed Regulation will require life sciences companies to make significant amendments to their current and future product packaging, with resulting cost impacts.
As the existing rules (in place since 1994) are in the form of a Directive, Member States have taken inconsistent approaches on packaging requirements, defining recyclable and reusable packaging, and on enforcement. The Proposed Regulation will have a direct impact on Member States and be enforceable by national courts, removing inconsistencies and improving legal certainty for businesses. Member States will remain free to adopt their own sustainability requirements as long as they do not contradict the Proposed Regulation.
The Proposed Regulation is aligned with the EU’s green aspirations and implements the goals set forth in EU’s Circular Economy Action Plan,2 namely to (1) reduce (over)packaging and packaging waste, (2) boost re-use and recyclability of packaging, and (3) harmonize the labelling requirements at the EU level to ensure correct separation of packaging waste.
Key Obligations and Requirements
1. Ambitious targets on companies within short deadlines. The core obligations and the proposed deadlines for their implementation are summarized in the table below.
|Minimize concentration of lead, cadmium, mercury, and hexavalent chromium in packaging materials (below 100 mg/kg)
|As from adoption
|Require all packaging to be fully recyclable (i.e., designed for recycling, separately collected and sorted, resulting in good quality secondary raw materials and recyclable at scale)
|From 1 January 2030 (although the recyclable at scale requirement comes into force 1 January 2035)
|Require all plastic packaging to include a minimum amount of recycled content (initially between 10% and 35%, depending on use case)
|Different targets per type of packaging starting from 1 January 2030, with increased targets from January 2040
|Limit packaging weight and volume to the minimum level necessary to ensure functionality (including reducing empty space to <40% and removing unnecessary layers)
|12 months after entry into force
|Ban certain single-use plastic packaging formats
|As of adoption
|Design all packaging to be reusable
|Different targets per industry starting from 1 January 2030, with increased targets from 1 January 2040
|Introduce uniform labels with information on material composition to facilitate and encourage customers to sort waste and to differentiate between different types of plastic packaging
|42 months after entry into force
Note: Before placing packaging on the market, manufacturers would have to carry out a conformity assessment procedure, or have it carried out on their behalf, and draw up the technical documentation and an EU declaration of conformity.
2. Parallel obligations for Member States. As with the current Directive, the Proposed Regulation also places obligations on Member States to:
- Reduce packaging waste generation per capita by 5% by 2030, 10% by 2035, and 15% by 2040, all compared to 2018 levels
- Set up return, collection, and recovery systems
- Promote the establishment of systems for re-use and refill
If Member States do not implement their obligations under the Proposed Regulation within the required deadlines, individual companies can invoke non-compliance before their national courts, especially where this has prevented the company from complying with its own obligations, and as a result, it has faced sanctions.
Exceptions for Medicinal Products
The Proposed Regulation contains limited exceptions. One of the exceptions is in favour of producers of immediate packaging of medicinal products, veterinary medicinal products, and contact sensitive plastic packaging of medical devices and in vitro medical devices. According to the proposal, for health and safety reasons, this group of operators would be exempt from the recyclability and minimum recycled content requirements until 2035. Once the derogation expires, these two requirements are expected to have a tangible cost impact on pharma product and medical device manufacturers. Materials that are known to be most effective in preserving medicines are not as easily separable for recycling purposes. This will raise the time and cost for innovation in alternative packaging materials for pharma producers. It will also likely lead to increased prices and create collateral issues, including the impact on existing long-term commitments to sell medicinal products at a fixed price.
Monitoring and Enforcement
Monitoring and enforcement are envisaged as a mix of monitoring and reporting obligations on the designated Member State authorities and reporting obligations for companies (regarding the fulfilment of the reuse and refill targets starting as of January 2030). Member States are given new powers to request that companies put an end to infringing activities, prohibit them from placing products on the market, order product recalls and withdrawals, and impose administrative fines (at a level to be set by Member States).
Procedure and Next Steps
A round of consultations with stakeholders ended in February 2023, but more heavy lobbying is expected going forward and likely the text of the proposal will undergo significant changes.
The Proposed Regulation is now in the hands of the European Parliament and the Council of the EU. Based on the initial debates at the Council’s Environmental Committee, Member States are principally in favour but disagree on a number of points which will have an impact on timing. Critically, there is no consensus on the choice of appropriate legal form and basis for the new legislation as several Member States are calling for more flexibility and consideration for their national circumstances, while others welcome the harmonization efforts.
Other major points raised by Member States and some industry representatives include:
- Whether the reuse and refill targets should be pushed forward as strongly as other measures considering health, safety, and hygiene concerns that the reuse and refill targets may give rise to, and while taking into account their own impact on climate change, freshwater consumption, and resource depletion
- The need to strike a balance between achieving quick results and setting realistic targets within business-friendly deadlines, specifically for SMEs with limited resources
- Setting out clearly the obligations of all operators at the different level of the supply chain and making sure that all essential requirements that businesses need to comply with are known well in advance of the prescribed deadlines. The deferral of important details to delegated legislation to be issued by the EC in the future arguably puts this at risk.
Impact on Businesses
If adopted, the Proposed Regulation will have a major impact on the regulation of packaging and packaging waste in the EU. All companies involved in the packaging of products destined for EU markets will be impacted and will have to adapt their business practices, and Member States will be under pressure to improve their monitoring and enforcement efforts.
The adoption of the Proposed Regulation is not expected until 2024 at the earliest, but companies should be aware of the proposals and start planning to ensure a smooth transition to the new regime without business interruption.
© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
When adopted, the Proposed Regulation will apply in parallel to other EU rules on packaging, such as those regarding safety, quality, the protection of health, and the hygiene of the packed products, or to transport requirements, as well as to the provisions of Directive 2008/98/EC that deals with the management of hazardous waste.
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, and the Committee of the Regions entitled “A new Circular Economy Action Plan: For a cleaner and more competitive Europe”, 11 March 2020 COM(2020) 98 final.