In our politics block this time, we offer you a review of the year and take a look ahead. The protagonists: EUDR (EU Deforestation Regulation), CSRD (Corporate Sustainability Reporting Directive), PPWR (Packaging and Packaging Waste Regulation), ECGT and GCD (Green Claims Regulations) and LKSG (Supply Chain Act).
2024 was also a ride through the unknown for everyone involved in regulation in our industry (whether voluntarily or involuntarily). It seems we are currently taking two steps forward, one step back and three steps sideways. Political framework shifts, such as the newly elected EU Parliament, suggest that the DEAL will gain priority in the Green Deal – not only at European level, but also nationally.
There are more and more discussions about what constitutes a sensible legal framework with a view to sustainability and what should be left to the “power of the market”. The debates about deregulation and debureaucratisation are increasing in volume. In principle, this is to be welcomed and we can do with a good dose of it. But we should not overdo it. Particularly in the areas of climate protection and transparency in the supply chain, we must continue to make progress and not fall behind. Otherwise we risk a hangover with serious consequences.
EUDR (EU Deforestation Regulation)
The EUDR is of great importance for the import and use of virgin fibres. It was actually due to come into full force on 1 January 2025. Now there is a short-term (albeit expected) postponement of one year.
But what a European trembling party – a coalition of conservatives from the Group of the European People’s Party (Christian Democrats) had used the Commission’s proposal, which in itself was sensible, to propose far-reaching changes six weeks before the EUDR came into force. To this end, a previously unknown manoeuvre was used and an alliance was formed with forces that want to divide the EU.
After a chaotic vote in the EU Parliament on 14 November 2024, the following key points were agreed for the time being:
- Large operators and retailers would have to comply with the obligations arising from the EUDR from 30 December 2025 (and no longer from 1 January 2025). Micro and small businesses have until 30 June 2026, the argument being that the extra time will allow operators around the world to implement the regulations smoothly from the outset without undermining the objectives of the law.
- Parliament also adopted other amendments proposed by the political groups, including the creation of a new category of countries that pose “no risk” in terms of deforestation (in addition to the existing three categories of “low”, “normal” and “high” risk). A country is categorised as “no risk” if it has stable or increasing forest cover. These countries are subject to significantly less stringent requirements, as the risk of deforestation is negligible or non-existent. The Commission is required to complete a country benchmarking system by 30 June 2025.
Is all well now? Have European forest owners been saved from excessive bureaucratic reporting obligations? That remains to be seen, because…
The amendments were referred back to the committee for the necessary interinstitutional negotiations, where they were rejected by the member states.
This was the start of a pre-Christmas trembling party, because if the changes are not published by the beginning of the year, the old text will apply from 1 January 2025. Fortunately, all parties involved were able to reach an agreement and so the postponement by one year has been agreed, meaning that the EUDR will come into force on 1 January 2026.
Our assessment: All companies that have not yet finalised their preparations for the EUDR can use this time now and should do so.
CSRD (Corporate Sustainability Reporting Directive)
The CSRD came into force in 2024 and significantly expands the reporting obligations for companies. From the 2024 financial year, very large companies will be the first to have to disclose comprehensive information on their environmental, social and governance practices.
From the 2025 financial year, large companies would also be required to report, including companies in the packaging industry, even if they do not have the critical mass. As companies subject to the reporting obligation are required to present their sustainability strategies transparently and assess their impact on the environment and society, they will also be caught up in this force field as part of the supply chain.
There are also new developments at CSRD that will ensure that the excitement will not let up in 2025. You can find a more detailed article on this in the sustainability section of this newsletter.
PPWR (Packaging and Packaging Waste Regulation)
The Packaging and Packaging Waste Regulation has kept us all on our toes in 2024, at least since its “first official adoption” in April this year. Now the second official adoption is almost through (the Council still has to approve it in December, Parliament did so on 27 November 2024).
If you are one of the 30 per cent of businesses that have not yet engaged with the PPWR, then I can recommend our policy overview articles throughout the year – and/or our PPWR spotlight campaign.
Let’s take a quick look at the finish of the PPWR:
- On Wednesday 25 November, the European Parliament finally adopted the linguistically and legally revised version of the EU Packaging Regulation (corrigendum).
- Now all that remains is for the Council to give its final approval. This is expected to take place at the last meeting of the year at the end of December.
For 2025, this means that the discussions and preparations for the implementation of the PPWR will pick up speed in companies. We will be happy to support you and guide you through the process.
ECGT and GCD (Green Claims Regulations)
The Green Claims Directive has almost been somewhat lost in the many discussions about the various regulatory projects. The English title of the directive, which came into force on 26 March 2024, is “Empowering consumers for the green transition” and is also abbreviated as ECGT or EmpCo. Together with the “Directive on empowering consumers for the green transition through better protection against unfair practices and better information” ((EU) 2024/825), it forms a new framework for sustainability claims and logos.
The ECGT Directive must be implemented in the Member States by 27 March 2026 and will apply from 27 September 2026.
- The amendments provide for stricter requirements for the presentation of reliable, comparable, substantiated and verifiable information on the environmental characteristics of products and companies. In future, text statements will only be possible with justification and certain climate claims will no longer be permitted at all.
- In addition, new requirements such as publicly accessible criteria and a third party certification system will streamline the seal market.
As a result, consumers, market players, consumer organisations and courts will be given more precise guidelines as a result of the changes under the ECGT Directive to assess when a case of unfair environmental advertising exists.
The ECGT Directive is to be supplemented by another EU directive, the “Green Claims Directive (GCD)” (“Environmental Claims Directive”). This is intended to lay down more specific requirements for the justification, verifiability and communication of explicit environmental claims. Final negotiations on the GCD Directive will take place in 2025.
LKSG (Supply Chain Due Diligence Act)
The LKSG remains a central element of the regulatory sustainability landscape in Germany and was further amended in 2024. Even though the reporting obligations have been postponed, the responsibility for human rights and environmental standards along the supply chain remains. Companies in the packaging industry must ensure that their entire supply chains comply with these standards.
The FAQs of the Federal Office of Economics and Export Control (BAFA) provide new insights into the control of the law in an update.
- For example, BAFA has announced under point 13.3. that it will check the availability of reports in accordance with the LkSG for the first time on 1 January 2026. Only from then on will BAFA issue warnings for missing or late submission and publication. Companies can therefore submit non-binding reports until 31 December 2025 or refrain from doing so without penalty.
- According to BAFA’s assurance, reports submitted before 1 January 2026 will only be provided with instructions for improvement. Requests for rectification with regard to deficiencies in content will therefore be refrained from for the time being.
The background and reason for the renewed extension of the deadline is a directive from the Federal Ministry of Economics and Climate Protection (BMWK) and the Federal Ministry of Labour and Social Affairs (BMAS).
- In their “Immediate action programme for sub-legislative measures for the practical application of the LkSG”, the BMWK and BMAS had announced that the LkSG reporting obligation would be postponed.
- The postponement takes place against the background of the forthcoming implementation of the Corporate Sustainability Reporting Directive (CSRD) and is intended to avoid double reporting obligations for companies.
Conclusion and outlook for 2025:
- Postponing the deadline for submitting reports gives companies additional time to optimise their reporting processes. This allows them to ensure smooth implementation of the requirements at a later date.
- The other due diligence obligations of the LkSG and their review and sanctioning by the BAFA remain unaffected by the new deadline regulation.
- Companies are also required to regularly document their due diligence obligations and ensure compliance with them.
- Ongoing monitoring by BAFA can still lead to sanctions if violations are detected.
Obligation to register for the Single-Use Plastics Fund Act
The registration deadline for the single-use plastic fund for domestic and foreign manufacturers (processors in the field of rigid plastic packaging for food and beverages as well as manufacturers of shirt bags and fillers in the field of flexible bags and film packaging) is 31 December 2024! From 1 January 2025, goods may no longer be placed on the German market if the manufacturer/filler is not registered! Further information can be found under this link. We will be happy to help you if you are unsure whether you are subject to registration or not.
