The New German Packaging Regulation and its Influence on the “Green Dot System”

United Kingdom

Introduction

The Packaging Regulation 1991 (Verpackungsverordnung), like the equivalent UK Producer Responsibility Obligations (Packaging Waste) Regulations 1997, imposes legal obligations on the manufacturers and distributors of packaged products, but unlike the UK, it does not impose obligations on retailers. Specifically:

  • Manufacturers and distributors of packaging used for transportation purposes are obliged to take this back after use and then to reuse, recycle or dispose of it outside the public waste disposal system (Section 4 Packaging Regulation).
  • Distributors are obliged to remove outer packaging before sale to the end user or make it possible for this to be returned to the point of sale (Section 5 Packaging Regulation).
  • Distributors must undertake to accept sales packaging at the point of sale or on site, whilst manufacturers and distributors are required to reuse the packaging or to recycle or dispose of it outside the public waste disposal system. These obligations do not apply to manufacturers and distributors who participate in a scheme that guarantees a regular and sufficient collection of used packaging materials from the end user and fulfils certain criteria (Section 6 Packaging Regulation). The only scheme that has established itself as meeting the requirements of Section 6 Packaging Regulation is the Duales System Deutschland operated by the Duales System Deutschland Ag (both known as DSD). This scheme allows members to use the Green Dot (Der Gruene Punkt) which is attached to sales packaging to indicate participation in the "Green Dot system". The actual handling of Green Dot waste is carried out not by DSD itself but by contractors. Although the idea of reducing packaging waste was generally applauded, the "Green Dot system" was severely criticized for a number of reasons, the most important being:
  • DSD is effectively a monopoly. Although the Packaging Regulation does not prohibit competition, the onerous conditions set out for such schemes under Section 6 Packaging Regulation have made a second system commercially unviable, thereby giving DSD a very strong position with regard to both its licensees and its contractors. For these reasons the German Government was criticized by the German Federal Cartel Office and the European Commission, although neither took any formal action.
  • The difficulties in ensuring companies not willing to participate in the "Green Dot system" nevertheless fulfil the duties under Section 6 Packaging Regulation.

These and other points led to an amendment of the Packaging Regulation which came into force on 1 January 1999. The new Packaging Regulation implements the EC Directive on Packaging and Packaging Waste 94/62/EC, thereby extending its scope to all types of packaging.

Innovations

Most parts of the new German Packaging Regulation were already contained in the Packaging Regulation 1991. However, the following major amendments should be mentioned:

  • Under the old law, a scheme conforming to § 6 Packaging Regulation had to fulfil a certain quota of collection of all packaging of a specific type. This requirement was dropped in order to foster competition to DSD. Now a scheme need only guarantee regular and sufficient collection of packaging from the producers and distributors (as well as certain other criteria, especially a sufficient quota of further use of the packaging materials).
  • All waste disposal services contracted out by a scheme operator must be put out to tender, its costs must be disclosed and the packaging meant for further use may only be given away under certain conditions (Appendix I Nr. 3 para. 3 Nr. 2 - 4).
  • Producers and distributors not participating in a scheme are now under an obligation to provide and prove the same quota of further use of their packaging (Section 6 Packaging Regulation; Appendix I Nr. 2 para. 1). The obligation for proof does not apply to the distribution of so-called Òservice-packagingÓ in bakeries, butchers and fish shops (thereby granting them an exemption).
  • Every scheme operator has the right to charge the producers and distributors not participating in the scheme for all packaging nevertheless handled by the scheme (Appendix I Nr. 3 para. 5).

Comments

It is not clear yet, whether the amendments to the Packaging Regulation will foster real competition for DSD. Although some companies have already shown interest in becoming operators of competing schemes, it may be that DSD will keep its monopoly for most packaging waste, leaving room for other operators only in small niche markets.

The obligation of system-operators (including DSD) to create conditions of competition for their contractors should foster competition and it is hoped that contractors from other EU member states will get the chance to enter the German market.

The obligation of producers and distributors not participating in a scheme to guarantee and prove the same share of use of packaging material and the rights of scheme operators to charge these companies for packaging handled by them will reduce the chances of avoiding the legal obligations under the Packaging Regulation.

The author of this article, Dr. Volkmar Wagner, is specializing in German and European environment and planning law at CMS Hasche Sigle Eschenlohr Peltzer, the German member of our transnational legal services organization CMS; he wrote this article during a secondment to the Environment Law Department.