EU PPWR Set to Transform Packaging, Plastics, and Recycling Sectors
The EU’s Packaging and Packaging Waste Regulation (PPWR), which will shortly pass into law after the EU Council voted it through on 16 December, is one of the most significant pieces of legislation for the packaging and recycling value chains in decades and is set to fundamentally reshape both industries in the coming decades.
The wide ranging text will introduce:
- Mandated packaging recyclability
- Minimum recycled content and reuse targets across packaging – albeit with potential derogations based on availability of recycled material
- Mandatory deposit return schemes (DRS) and separate packaging collection targets
- New reporting and labelling obligations
- The extension of extended producer responsibility (EPR) schemes
- A restriction on the placing on the market of food contact packaging containing per- and polyfluorinated alkyl substances (PFAS) above certain thresholds
- A restriction on plastic collation films except for transportation purposes
- The possibility of bio-based plastic contributing to recycling targets
- The allowance of imports to count towards recycling targets provided they are of similar quality as domestic material and have been separately collected
The wording in the adopted document is the same as that adopted by the EU Parliament in April, for a full summary of the legislation, including derogations exemptions and scope for the EU Commission and nation states to alter the targets
MINIMUM RECYCLED CONTENT TARGETS FOR THE PACKAGING CHAIN
From 1 January 2030 – three years after the introduction of the related implementing act (whichever is later) – all plastic packaging placed on the market in the EU must include a minimum percentage of recycled content from post-consumer waste – by weight – of:
- 30% for contact sensitive packaging (this is generally packaging that comes into contact with food or medical supplies), excluding single-use bottles made from polyethylene terephthalate (PET) as the major component
- 10% for contact sensitive packaging made from plastic materials other than PET, except single use plastic beverage bottles
- 30% for single use plastic beverage bottle
- 35% for all other packaging
By 2040, this will increase to:
- 50% for contact sensitive plastic packaging made primarily from PET, except for single use plastic beverage bottles
- 25% for non-PET contact sensitive plastics, with the exception of single use beverage bottles
- 65% for single use beverage bottles and all other plastic packaging
These recycled content targets are seen by many as ambitious given current recycling penetration rates for materials such as recycled polyolefins, and are likely to further boost demand for recycled material in the coming years. The targets have already had a material impact on recycled polyolefin demand – particularly for recycled high density polyethylene (R-HDPE) white blow-moulding pellets. Demand for R-HDPE blow-moulding white has been increasing throughout 2024 as packaging players seek to utilize wider forms of material than natural, and increase their number of suppliers in order to better position themselves ahead of the introduction of the PPWR.
This has resulted in a narrow spread between blow-moulding white and blow-moulding natural pellet prices. The spectre of the PPWR has also meant that demand for recycled polyolefin packaging grades in 2024 has proved more resilient than in previous downturns, highlighting the increased importance placed on sustainability in the wider market place.
The recycled content targets will allow the use of material from ‘third countries’ – those outside of the EU provided it has been separately collected, and have equivalent specification to the requirements listed in the PPWR, the Waste Framework Directive (2008/98/EC), and the Directive on the reduction of the impact of certain plastic products on the environment ((EU) 2019/904). Nevertheless, there remain question marks over what ‘equivalent specification’ will mean in practice and depending on implementation this could either encourage or deter imports of recycled material into Europe.
Additionally, the EU Commission will be required to review the state of technological development and environmental performance of bio-based plastic packaging within 3 years of the entrance in to force of the PPWR (this is the date it is published in the Official Journal of the European Union.).
Following the review, the Commission will be required to bring forth legislative proposals for targets to increase the use of bio-based plastics in packaging. This will include the possibility of bio-based material contributing to recycling targets for food-contact material where recycled material is not available. This is likely to impact most heavily on the polyolefins and polystyrene (PS) sectors. While market players have broadly welcomed clarity on the role of bio-based plastics, the majority of players have argued that any bio-based plastic targets should be separate from recycling targets to avoid impacting the development of mechanical recycling.
Member states will be required to implement a Deposit Return Scheme (DRS) unless they can reach a separate collection target of 80% by weight of applicable packaging placed on the market for the first time in 2026.
Under a DRS, the buyer typically pays a deposit at the point of sale as part of the cost of the item. When the buyer later drop off the packaging at a deposit return point they are then given their deposit back. This incentivizes customers to return packaging, provided the deposit level is set at a high enough level.
Extended Producer Responsibility (EPR) schemes will be widened under the legislation and must be set-up to ensure that fees to producers (or those with producer responsibility in the case of imports) are sufficient to cover the ‘full waste management’ cost of packaging waste, but actual fees are not stipulated in the legislation.
The regulation states that players contributing to EPR schemes should be given priority access at market prices to recycled material corresponding to the amount of packaging placed in a Member State by each individual economic operator. How this will operate in practice and what ‘priority access’ means remains to be seen, but has the potential to reshape market dynamics by creating a hierarchy within the market and creating restrictions on sale.
SINGLE USE PLASTICS DIRECTIVE (SUPD)
The PPWR amends the SUPD, by superseding that regulation’s 30% 2030 minimum recycled content target for plastic bottles. While the PPWR target is identical to the SUPD, it specified that the calculation method for recycled content will be per manufacturer, removing the uncertainty within the SUPD.
SINGLE-USE PLASTICS, PACKAGING WASTE TO LANDFILL, PFAS BANS
There will be further bans on single-use plastics introduced by the PPWR.
Significantly, for the recycled low density polyethylene (R-LDPE) flexible market this includes a ban on plastic film wrap grouping bottles, cans, tins, pots, tubs, or packets together in multi-packs at point of sale, but will not include wrap used for business-to-business distribution. This could also impact on pyrolysis-based chemical recyclers because post-consumer flexibles have been identified by the sector as a potential key feedstock source.
The agreement also includes a ban on food-contact packaging containing PFAS above certain thresholds.
Further, there will be a restriction on sending packaging waste that can be recycled to landfill or incineration, which could result in a higher sorting requirements and costs for waste managers.
NEW RE-USE TARGETS
By 1 January 2030, 40% of most transport packaging used within the EU – including e-commerce – will need to be reusable and ‘within a system of reuse’. From 2040 this will increase to 70%.
By 2030, 10% of grouped packaging boxes for stock keeping or distribution will need to be re-usable. By 2030, distributors of alcoholic and non-alcoholic beverage sales packaging will need to meet a 10% reuse target, which will increase to 40% by 2040. Some classes of alcoholic beverage, including highly perishable alcoholic beverages will be exempted.
The wording of Article 29 (which sets out the re-use targets has caused concern within the recycled low density polyethylene (R-LDPE) flexibles market – particularly the wording of derogations contained in paragraphs two and three – with some players stating that the targets amount to a defacto ban on flexible plastic transport packaging because of the difficulty in reaching the reuse target. Earlier in December, the European Commission launched an assessment with a view to exempt pallet wrapping and straps from full re-usability obligations.
Controversially, though, cardboard boxes will be exempt from these reuse targets, which could see an increased shift to the material. In a statement published just prior to the EU Council’s vote, Virginia Janssens, managing director of trade group Plastics Europe said:
“As things stand, there is a real risk that the proposed measures will fragment the internal market for plastic packaging and create an uneven playing field with other materials.
“Whilst politically attractive to some stakeholders, arbitrarily targeting plastics is not the answer. This will jeopardize investments in sustainable plastic packaging solutions and encourage the substitution of plastics with other materials without any proven environmental advantages. It will not solve the issue of single-use packaging.”
RECYCLABILITY AND REUSE
By 2030 all packaging must be recyclable or reusable. To be classed as recyclable, packaging must be:
- Designed for recycling
- Separately collected
- Sorted in to defined waste streams without affecting the recyclability of other waste streams
- Possible to be recycled so that the resulting secondary raw materials are of sufficient quality to substitute the primary raw materials
Packaging recyclability performance grades are to be established by packaging category and classified as grades A, B or C. After 1 January 2030 any packaging that falls below grade C will be restricted from sale in the market. After 1 January 2038 packaging classified below grade B will be banned from sale in the market.
Under the legislation, along with design for recycling assessments from 2035 an additional assessment will be added based on the weight of material effectively recycled from each packaging category – with the packaging categories under the design for recycling assessment established in Article 6 paragraph 6 of the provisional agreement.
The EU Commission will be given power to adopt delegated acts to establish the detailed criteria for design for recycling under the packaging categories, which will be set-out by 1 January 2028.
Also from 2035, a requirement that material be ‘recycled at scale’ will be added to the recyclability assessment, with the EU Commission able to amend the thresholds.
The definition of packaging waste recycled at scale requires separate collection, sorting and recycling of material across the EU as a whole (including of waste exports) in installed infrastructure for each of the packaging categories of at least 55% for all materials except for wood which requires at least 30%.
Assessments of recyclability will include the impact on recycling systems of the inclusion of things such as barriers, inks and labels.
The short time-frame between setting out the assessment criteria and the initial 2030 targets is of concern to market players, given product and development cycles, and the seriousness of the penalties for non-compliance.
POSSIBLY MOST IMPORTANT LEGISLATION IN DECADES
Taken as a whole, the PPWR amounts to arguably the most significant piece of regulation to impact the packaging, plastic and recycling chains in decades. The penalties for non-compliance will make it unavoidable for market operators.
Shortages of packaging-suitable mechanical recycling grades mean players will need to act quickly to ensure compliance, and market impacts are likely to begin to be felt in the short-term. Nevertheless, there are a number of criteria around things such as the role of bio-based plastics and recyclability targets (along with wider debates over whether chemical recycling can count towards recycling targets), which remain unclear. These add uncertainty and if not quickly confirmed could delay market action or push players to alternative materials that may not have beneficial environmental outcomes.
“With multiple pieces of regulation at various stages of the regulatory process, including the SUPD, end of life vehicle directive and PPWR, there’s huge pressure across the value chain to comply with competing regulation. The lack of clarity on some aspects negatively affects investment conditions necessary to improve supply,” Helen McGeough, Global Analyst Team Lead, Plastics Recycling at ICIS said.
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