The German Packaging Act (VerpackG)

The Packaging Act is the successor to the Packaging Ordinance (VerpackV). Introduced in 1991, the regulations were brought in to make those responsible for the packaging share in the waste disposal costs and therefore motivate them to use less packaging. As different materials generate different waste disposal costs, the regulations sought to encourage packaging manufacturers to change their materials, such as from plastic film to paper.

To prevent everyone from simply dumping their rubbish in a big hole in the garden, Germany has a waste disposal system for packaging. It is through this system that the waste is collected and recycled.

Packaging of all kinds makes up a large proportion of the waste, so the producers of this packaging must also participate and contribute to the running costs of the waste disposal system.

The remaining waste must be dealt with by the municipality (city administration) and this disposal is paid for by the householders through the waste fees.

So, you might be thinking that not only the packaging producer but also the private individual has to pay for the same waste and that the disposal company then also gets money for reselling the raw material.

However, the waste disposal companies are not only obliged to keep the disposal system running and stable, they also have to maintain a recycling quota. From 2019 onwards, at least 58 % of all plastics must be recycled (previously it was 36 %).

So in order to meet these higher quotas, the waste must be sorted more efficiently and effectively, which in turn entails higher costs.

The short answer: most likely yes.

The prerequisite is that you are a commercial trader and are the initial distributor of packaging that is typically used by private end customers. Whoever this applies to is considered to be the manufacturer of this “packaging that is subject to system participation”. The manufacturer should not be confused with the person who produced the packaging.

Private end users are not only private individuals, but also “comparable sources”. As a rule, the packaging waste is disposed off in the yellow sack or the yellow bin. There is more information on these terms below.

The easiest way to understand the topic is through examples:

You are an online retailer who sells and ships shoes from the German shoe manufacturer "S".

"S" 's shoebox must already be licensed, as the goods were handed over to you with the aim of selling them. However, you need to license the shipping box that you use to ship to your customer. And of course, also the filling material. You will need a confirmation from your supplier that the packaging of the products is already licensed.

One of the major changes to the Packaging Act is that shipping packaging is explicitly defined as product packaging that requires a license and not as transport or service packaging.

You are an online retailer who produces, sells and ships shoes yourself.

Now, in addition to the shipping packaging, you are also responsible for the actual product packaging and you have to license it.

You are an online retailer who imports, sells and sends shoes from shoe manufacturer "I" from Italy.

Anyone who imports packaging into Germany becomes the manufacturer of this packaging. Since it cannot be assumed that manufacturer "I" has licensed its packaging in Germany, the person who imports it will be held responsible. You have to license them as if you were a manufacturer yourself, or you have to prove that you have already been licensed. If the packaging is already licensed in Germany, you will need a confirmation from your supplier "I" for your documents.

You are an online retailer and only ship in used shipping boxes.

Here, too, you have to license or prove that you have already been licensed. Unfortunately, just because the packaging is used does not mean that it has been licensed.

You have a shop where you sell shoes from the German shoe manufacturer "S".

The bags that the customer receives are also subject to licensing. These belong to the service packaging, which is a special form of sales packaging. Service packaging is packaging that is only filled with goods at the final distributor in order to enable or support the handover to the private end customer. These include B. carrier bags, bun bags and coffee-to-go cups. Service packaging is the only packaging that can be purchased pre-licensed. This prevents every bakery and every café from having to license their own. The producer or wholesaler may already sell service packaging with a pre-license. However, you have to pay attention to whether they were sold to you pre-licensed. If this is not the case, you still have an obligation.

You are selling a box filled with sand and sealed as a rustling toy for children.

If the packaging is an integral part of the product and if both are consumed together and disposed of together at the end of the product, then it is not considered packaging. An example of this are tea bags and, surprisingly, coffee capsules as well.

There are a number of duties that you must follow. First, you have to register as a manufacturer for each of your brands in the LUCID packaging register. Registration is free.

Then you have to license your packaging with a so-called "dual system". There are a wide variety of system providers with a wide variety of prices, contract conditions and terms.

In addition to your system provider, you must also report the licensed quantity personally to the packaging register (double report). This notification depends on your quantity, but at least once a year. Your system provider decides whether they would like you to submit a different reporting cycle.

If you license over 80 tons of glass, 50 tons of paper / cardboard or 30 tons of metal / aluminum / plastic / composite packaging annually, you must also submit a declaration of completeness every year, which is certified by a registered examiner.

The dual systems are obliged to create incentives to avoid packaging and to use “more environmentally friendly” materials. Therefore, the kg prices differ for each material (film, paper, glass, etc.).

Every component of the packaging must be licensed, including the plastic lids of the muesli packaging, the viewing window on the product packaging, etc.

If applied or attached materials do not make up more than 5 % of the main material, you can add their weight percentage to the weight of the main material.

Example:

You seal a shipping box with adhesive tape.

The cardboard shipping box weighs 300 grams, the tape used 10 grams. The adhesive tape accounts for less than 5 % of the total weight. You can therefore license 310 grams of corrugated cardboard and ignore the adhesive tape.

Only service packaging (French fries trays, bread roll bags, etc.) may now be sold pre-licensed. All other packaging must be licensed by the distributor. This is not really an innovation, but it took some time for suppliers to stop offering pre-licensed packaging. However, you are allowed to be assisted by "competent and reliable" third parties, e.g. brokers.

However, you remain responsible and must personally register yourself and report the quantities.

A major pillar of the Packaging Act is the definition of equivalent sources as those that are equivalent to private households and are therefore considered to be end users.This explicitly includes, for example, restaurants, hotels, administrations, hospitals etc.

If packaging typically arises here, then it is subject to licensing.

Again, a few examples:

You produce handmade soap, package it individually and sell it exclusively to a hotel.

The soap packaging is subject to licensing. The hotel is not a private household and is a commercial customer for you, but it is considered an equivalent source of waste.

You produce handmade soap, pack it in boxes of 100, stack the boxes on pallets and sell them exclusively to a large industrial company so that they can use them to clean their machines (Editor's note: It is very difficult to think of these examples. :-) )

Here, the packaging is not subject to licensing because this packaging does not typically accrue to the private end consumer. The industrial company has its own disposal system.

However, if you sell the same soap (distinguishable e.g. by your brand, article number or EAN number) to hotels, you have to license everything again.

There is no final interpretation of the law on this point yet, but it can be assumed that there will soon be court decisions on how manufacturers should proceed.

You make handmade soap, package it individually for sale, stack 20 bars in a counter display and ship it with an outer carton to a retailer.

The soaps are for individual sale, so the individual product packaging is subject to licensing. The counter display typically does not accrue to the end customer, but is used in the trade and disposed of or refilled when empty. Therefore, you do not have to license it. You have to license the outer box because it is a shipping package. If you stack several of them on a pallet and send it to the retailer, you do not have to license it. However, you are obliged to take back the emptied retail packaging or contribute to the cost of disposal.

As you can imagine, there is a lot of debate about what is and what is not system-participating packaging. Anyone can therefore submit an application to have their packaging tested. The result is published in the catalogue of packaging subject to system participation and thus provides legal certainty.

The packaging register checks and decides whether this type of packaging typically accumulates at the end consumer. An overarching "winner-takes-it-all" principle applies on a packaging type basis, so to speak.

For example, it has decided that packaging for drills with an output of less than 900 watts typically accrues to the end consumer. Those with a power above 900 watts do not. This decision has made it irrelevant whether you manufacture special drills that you sell exclusively to industrial companies. If a drill has less than 900 watts, you must license it.

Congratulations, the issue just got 27 times more complicated. Germany and all other EU countries implement the European Packaging Directive Regulations. However, each country has a different implementation with its own set of rules.

In case of doubt, you will have to license your packaging in every country you sell to.

We don't know. According to the packaging register, deductions are only permissible if the manufacturer has taken it back (exclusively) due to damage or unsaleability and has documented the return in each individual case in a verifiable form. General deductions – without concrete proof in each individual case or via expert opinions – are not permissible. However, it can be assumed that large online retailers will clarify this issue in the near future. It is important that you have the packaging waste disposed of by an authorised disposal company and that you can provide evidence of the corresponding order and weighing documents.

A big advantage is that you can now check for each brand whether a manufacturer has registered. Unregistered brands are subject to a distribution ban. So traders can check whether they can carry products of certain brands.

Packaging of products that are given away free of charge also falls under the system participation obligation if this is done in the course of carrying out a trade.

"Der Grüne Punkt" is a brand of Duales System Deutschland GmbH. It is the market leader, but by no means the only provider of a "dual system" with which you can license your packaging. The green dot on a package only says that you are licensed in their system. However, you can also pay a license fee and use the green dot even though you are licensed elsewhere or even not licensed at all.