Recyclable packaging as a financial incentive
How can financial incentives for recycling-friendly packaging be made even more attractive? The German government has been thinking about this for some time. A fund solution is to be implemented before the end of the current legislative period. Companies that adhere to the minimum standards for recyclable packaging, develop recyclable designs and use recyclates should benefit.
Similarly, the dual systems have developed a fund model that rewards manufacturers who bring recyclable packaging onto the market. Politicians emphasize that the legal framework must be passed quickly in order to ensure that the targets for reducing packaging waste are met in the long term. But what does the situation really look like, where do we stand in terms of recycling-friendly packaging designs and what exactly is the fund model all about? We shed light on these questions in this article.
The German government intends to reform the Packaging Act and implement a fund model that financially supports the use of recyclable packaging and recyclates. Competition between the dual systems currently prevents effective incentives, which is to be remedied by the planned amendment to the law. The EU will allow member states to design their own incentive systems by the end of 2024, whereby there is a consensus in Germany that manufacturers of recyclable packaging should be financially rewarded. This should not only improve recycling rates, but also strengthen the circular economy.
What is the fund model for recyclable packaging all about?
The German government plans to revise the Packaging Act in order to introduce a fund model that financially promotes the recycling-friendly design of packaging and the use of recyclates. Currently, Section 21 (1) of the Packaging Act does not provide sufficient incentives for recyclable packaging, as competition between the dual systems hinders effective implementation.
According to EU law, a financial incentive system is to be introduced for all recyclable packaging and types of packaging by the end of 2024. The EU gives the member states leeway in designing the systems.
There is a consensus in Germany that manufacturers who produce recyclable packaging should be rewarded financially. The income from the fund, generated by less recyclable packaging, should support projects to promote the use of recycled materials.
The current status of the amendment
The government is currently working on the design of the fund model. The aim is to overcome competition between the dual systems and enable the participation fees to be structured in an environmentally friendly way. This should ensure the comprehensive promotion of recycling-friendly designs along the entire value chain.
What does recyclable packaging currently look like
In the circular economy, avoiding packaging materials is a top priority. Reducing unnecessary packaging, minimizing the use of materials and promoting reuse not only has environmental benefits, but also makes economic sense.
If packaging cannot be avoided altogether, the focus is on producing packaging that is suitable for recycling. The German Packaging Act (VerpackG) provides initial financial incentives in this regard: in accordance with Section 21 VerpackG and the EU Packaging Directive, system operators must provide financial incentives for the recycling-friendly design of packaging and the use of recyclates and renewable raw materials. Although the production of recyclable packaging is increasing, many companies feel that the benefits have so far been insufficient.
Good to know: The aim of recycling-friendly design is to maximize the recyclability of packaging right from the design and production stage in order to keep the materials in the material cycle. This should be achieved by designing packaging in such a way that it can be recycled as completely as possible into a secondary product of the same material after use.
The dual systems are now proposing the introduction of a statutory, uniform surcharge for non-recyclable packaging. This surcharge is to be paid into the fund currently under discussion, which must be organized under private law. The Zentrale Stelle Verpackungsregister (Central Agency Packaging Register), in its private-law form, is to act as the body responsible for this fund in order to further promote the recycling-friendly design of packaging.
Implementation and challenges with recyclable packaging
In Germany, intense competition between the dual systems has so far hindered the introduction of effective financial incentives for ecological packaging. A planned reform of Section 21 of the German Packaging Act (VerpackG) should now change this and improve the framework conditions.
Many manufacturers use the industry-wide recognized minimum standards for recyclable packaging from the Central Agency Packaging Register to optimize their products, which means that in 2022 around two thirds of the packaging placed on the market in Germany was successfully recycled.
However, composite packaging is problematic for recycling as it often has low recyclability and undermines the goals of the circular economy. Non-standard materials such as bamboo, wood, jute, ceramics or cork, for which there are no specific recycling rates, are also often not recycled.
Ultimately, the success of recycling also depends on the correct separation of waste by consumers. This underlines the need to design recyclable packaging in such a way that it can be easily disposed of correctly in order to maximize the effectiveness of the recycling process.
In order to benefit from the fund and the financial incentives for recycling-friendly packaging in the future, we at Deutsche Recycling GmbH will support you in complying with all guidelines and provide you with sound advice on recycling-friendly packaging. Together with our experts, you can ensure an individual solution within a packaging law consultation that is tailored to your requirements.
