We put a special focus this time on the adoption of the Carbon Border Adjustment Mechanism (CBAM), which affects all machinery and tooling companies as well as aluminium packaging. We also look at the updated minimum standard for recyclable packaging, taxonomy or Environmental Delegated Act, CSRD reporting standards, the Supply Chain Directive (CSDDD), the Green Claim Regulation and news from the PPWR.
The regulations on the Single-Use Plastic Fund have been adopted
On 28.09.2023, the Bundestag approved the regulation on the Single-Use Plastic Fund, which means that the regulations for the registration of manufacturers and entitled parties (municipalities and waste disposal companies) will come into force on 01.01.2024 and the first fees will be due from spring 2025.
Whether the additional bureaucratic effort is in proportion to the funds collected and whether the level of the rates leads to the desired result of less waste on the streets and reduced accumulation of certain disposable packaging remains to be seen – but may be doubted.
Updated minimum standard for recyclable packaging
On 30 August 2023, the Central Packaging Register (ZSVR) published the minimum standard for recyclable packaging edition 2023.
- The minimum standard is aimed exclusively at the dual systems. Contrary to what is sometimes perceived, it is not a binding “design for recycling” guideline for the economy.
- Financial disadvantages in the context of participation fees at the dual systems are not expected at present. However, this could change when the reform of Section 21 of the Packaging Act announced by the Federal Government is completed.
- Recycling of used glass: The ZSVR defines a limit value for the light transmission (translucence) of glass. This determines whether glass packaging can be recycled. If a glass packaging is not translucent, it is sorted out in the plants as a contaminant because it is not recyclable. This is the case with lacquered bottles, for example.
- NC printing inks: Printing inks in intermediate printing based on nitrocellulose lead to a classification as non-recyclable, as NC impairs the mechanical recycling process due to limited temperature resistance and reduces the recyclate quality.
- The new “rule” so far only applies to polyethylene (PE) films larger than DIN A4 and to PP films in general. Direct printing is also not yet affected. However, this could change soon, so companies should check the use of NC-based printing inks.
The Packaging Act stipulates that packaging may only be classified as recyclable if a functioning recycling infrastructure is in place. As part of a study by the Federal Environment Agency, the concrete sorting and recycling capacities for the different types of packaging are scientifically determined every year and these results are used to update the minimum standard.
EU Taxonomy now complete – Environmental Delegated Act enacted
The EU Commission adopted the Environmental Delegated Act (EDA) and amendments to the Climate Change Delegated Act as part of the EU sustainability taxonomy.
The EDA sets technical screening criteria for activities under the non-climate objectives of the taxonomy. This is relevant for all companies reporting under the CSRD from 2025/2026.
Much talk about the CSRD – Now the reporting standards are published
The EU Commission has adopted the delegated act that sets the first 12 European Sustainability Reporting Standards (ESRS). This means that the time of guesswork for this one regulation is over.
Our detailed analysis of what this means for corporate reporting can be found in our article “ESRS and CSRD: What you need to prepare for now“.
EU Supply Chain Directive (CSDD)
The EU Parliament adopted its position on the Corporate Sustainability Due Diligence Directive (CSDDD) on 01 June 2023, making numerous amendments to the text proposed by the Commission in the area of human and labour rights in the supply chain.
The EU Council and Parliament will now start negotiations on the final text of the directive. This makes adoption before the EU parliamentary elections in May 2024 more likely.
The Green Claim Regulation is entering the final stretch
At the end of September 2023, the EU Parliament and the EU Council reached an agreement on the Green Claim Regulation. Formal adoption is now only a matter of time. After formal adoption, the member states have 24 months to transpose the regulation into national law and bring it into force.
Content of the Regulation
- The core of the regulation: In future, companies should only be allowed to make environmental claims if they are fact-based, transparent, and verifiable.
- Environmental claims must therefore be based on scientific data that has been verified by independent third parties and is regularly reviewed.
- Environmental claims should be communicated transparently, which means, for example, that companies justify their statements to consumers.
What are Green Claims?
Green claims are voluntary statements by companies about their or their products’ and services’ environmental friendliness. These include statements such as climate-friendly, nature-friendly, recyclable, or compostable. Even the statement climate neutral may no longer be used as a claim if the “climate neutrality” is predominantly based on compensation.
More than half of the environmental claims made by companies are vague, misleading, or simply false. This means that companies that make an honest effort to be sustainable are competing with those that are merely greenwashing. Therefore, it is almost impossible for consumers to make informed and, in the best case, sustainable decisions.
Who is affected?
The Green Claims Directive is intended to apply to all companies that
- have more than 10 employees and
- make more than 2 million in turnover per year.
Conclusion and our advice
Companies can and should prepare themselves for the Green Claim Regulation. For example, by recording their status quo in terms of sustainability, setting measurable goals and professionalising their sustainability communication.
Because one thing is clear: for all stakeholders who sincerely strive for more sustainability, the Green Claims Directive means a real competitive advantage.
News from the Packaging & Packaging Waste Regulation (PPWR)
The debate on the PPWR continues. In a world without a crystal ball, we must continue to wait with bated breath for the things that are sure to come. The meeting of the ENVI Committee has been postponed to 24 October, so the subsequent trialogue with the participation of the EU Commission would have to reach an agreement by the beginning of April 2024 at the latest, so that the result can be formally adopted before the elections to the EU Parliament in June. It is likely that if the ENVI Committee does not reach its decision on 24 October and the EU Parliament in November, there will then be a postponement of the decision on the PPWR after the parliamentary elections, purely for technical-structural reasons. This would possibly mean adoption in Q1 2025. As B+P, we think that a postponement would not be a good signal, as it would further increase uncertainty and not provide a clear framework. It would also encourage further nationalisation of packaging legislation.
Three main issues of contention are:
- Design for Recycling and the definition of “Recycling at Scale”,
- use rates for recyclates and
- the reusable/re-use targets.
It is becoming clear that there will be major changes to the Commission’s proposals on all three issues.
- For example, the item “Recycling at Scale (from 2035)” could be deleted altogether.
- When it comes to recycling quotas, it could end up being two-track.
- On the one hand, the 30% target for PET bottles is likely to be actuated in this way. The other quotas, however, are hotly contested. One important factor is the doubt as to whether the amount of recycled material needed in 2030 can realistically be achieved. According to new estimates, the amount of recycled polyolefins (PP and PE), by far the most important packaging plastics, would have to increase at least fivefold, while the amount of recycled PET would have to double.
- On the other hand, we see in the recycled material market that a quota is obviously necessary to achieve the urgently needed push for a higher recycling of materials. You can read more on this point in the article “Price war and concerns about the future of recycled material” in this newsletter.
The topic remains exciting and in the next newsletter we can (toi toi toi) already report the result of the parliamentary decision.
Finally – the German implementation of the EU Whistleblower Directive is in force
The Whistleblower Protection Act (HinSchG) is the German implementation of the so-called EU Whistleblower Directive (Directive (EU) 2019/1937 of the European Parliament and of the Council of the European Union of 23 October 2019). It was promulgated in the Federal Law Gazette on 2 June 2023 and entered into force on 2 July 2023.
- The aim of the HinSchG is to protect people who have obtained information about infringements of Union law in the course of their professional activities and report them.
- The HinSchG prohibits any reprisals against whistleblowers and obliges companies to set up secure channels for whistleblowing.
- Companies with usually at least 250 employees must have implemented the requirements under the HinSchG by 2 July 2023 at the latest. But: The provision on fines, according to which a fine of up to 20,000 euros may be imposed if an internal reporting channel is not set up or operated, will not come into force until 1 December 2023. No fine will be imposed for lack of set-up or operation until then.
- For companies with 50 to 249 employees, the HinSchG provides for an extended establishment period until 17 December 2023. These companies are also permitted under section 14(2) HinSchG to share resources and operate a “joint reporting office” with other companies.
Agreement on reform of EU emissions trading
The revised Emissions Trading Scheme Directive was published in the Official Journal of the European Union on 5 June 2023 and entered into force on 1 October 2023.
The European Emissions Trading Scheme will thus be gradually extended to almost all sectors, in particular to the areas of buildings and transport from 2027. Approximately 85 percent of all European CO2 emissions will be tied to certificates or emission rights in the future. Their quantity will decrease continuously – in accordance with the European climate goals.