The European Packaging and Packaging Waste Regulation (PPWR) is intended to become a milestone on the path to a sustainable circular economy. From 2030, binding quotas for the use of recyclates will apply – but as things stand, these targets cannot be met. What was conceived as ecological progress now threatens to become a stress test for manufacturers, retailers and consumers. Severe market distortions could follow – particularly for the packaging materials industry.
Industry experts warn of overburdening, market distortions and looming supply shortages. So far, many speak out only behind closed doors. The new European packaging regulation reveals, they say, a lack of realism that could turn into a breaking point for the entire value chain.
“If packaging manufacturers don’t wake up before 2028, they’ll disappear from the market,” warns an expert in conversation with Lebensmittel Praxis. The consultant voices what many in the industry confirm when asked: small and medium-sized packaging manufacturers are being put under regulatory and economic pressure by the PPWR – pressure that many will struggle to cope with. While recyclate quotas, packaging minimisation requirements and technical standards are well-intentioned, they are often deemed impractical – not only by the packaging industry, but also by food producers and retailers. “The quotas are set for 2030, even though the required recycled materials simply won’t exist by then. That’s already 99 percent certain,” says the managing director of a medium-sized packaging company.
A look at the recycling market underscores this: even though the recycling rate for lightweight packaging collected in the yellow bag system reached nearly 70 percent in Germany in 2023 – thus exceeding legal targets – the collected material is still far from sufficient. For Germany alone, the industry expects a shortfall of 1 million tonnes of recyclate by 2030. Across Europe, the recyclate gap is estimated at around 3.5 million tonnes. This is confirmed by a Conversio study commissioned by BKV (the German recovery and plastics recycling organisation), which forecasts a recyclate shortfall of around 30 percent in Germany by 2030 – unless substantial investments are made in recycling infrastructure and other waste streams are more intensively exploited. But that currently seems more than unlikely.
Dr Carl Dominik Klepper, Managing Director of the German association Alliance for Packaging and the Environment (AVU), is equally sceptical: “Using recyclates in food packaging is hardly feasible across the board with current technologies.” Deposit-return PET is in short supply, and there are almost no EFSA-compliant recycling capacities for other applications. The result? Market distortions in favour of multinational corporations who are already securing access to available recyclates. The European Food Safety Authority (EFSA) plays a key role in assessing and approving materials that come into contact with food, particularly food packaging. According to many experts, EFSA’s approval procedures are far too slow to meet the timelines of the PPWR. Yet speed is crucial if new recycling technologies and innovative packaging materials are to be introduced to the market.
Retail voices sound a similar alarm. The challenges are real, says one central office. The PPWR requirements – such as mandatory recyclate use by 2030 – are considered ambitious.
The situation is especially tense in the PET segment, since most material is reserved for beverage applications. Contact-sensitive products like sliced meats or cheese can only use recyclates from strictly defined sources – either from deposit-return bottles or traceable tray-to-tray systems. And this is exactly where the bottleneck lies. Across Europe, there are only a handful of suppliers capable of producing EFSA-compliant tray-to-tray recyclate. At the same time, large companies are securing access to the highest-quality material, often colouring it to make it unusable for other applications such as meat or cheese packaging. From a sustainability perspective, this is nonsensical. The battle over clean recyclates has already begun.
And it gets worse: food-grade PET recyclate is increasingly diverted to non-food applications through downcycling – making it permanently unavailable for food packaging.
No Fair Distribution Mechanism for Scarce Recyclates
If recyclate quantities fall short in 2030, prices will rise and the strongest players will prevail. According to critics, the PPWR’s creators failed to anticipate this outcome. “There’s no logic for distributing the limited supply,” says a packaging consultant. In other words: whoever comes late goes empty-handed – this is the unspoken rule of the market. “Even if a small manufacturer tries hard – if the multinationals want the recyclate, they’ll get it,” he says. This market logic, he argues, should have been anticipated.
Retail chains are also caught in a dilemma. A sustainability manager from a major grocery chain reports: “Sometimes I have to coordinate with four stakeholders just to set up a single packaging loop. Many still don’t even realise that they fall under the scope of the PPWR.” What’s missing, she says, is information, guidance, and realistic timelines. “Even we as a large corporation can only manage this with specialised teams. How are smaller companies supposed to cope?”
Lawyer Prof. Dr Gottfried Jung, from Kunz law firm in Mainz, also sees major practical hurdles. “The regulation theoretically allows flexibility. But without early coordination between industry, the recycling sector and legislators, we risk ending up with a patchwork of exemptions and legal uncertainty.” Jung expects a wave of legal disputes in the coming years – for example, over unequal requirements for different materials or disproportionate sanctions within the EU.
Packaging Manufacturers Must Act Now!
The legal expert and PPWR specialist urges SMEs in the packaging sector to take action. Jung notes that the delegated acts under the PPWR are currently being developed by the EU Commission together with national experts. Businesses – especially small and medium-sized enterprises – should start advocating for their interests with the German government and the Commission. He emphasises the need for experts who represent the perspective of SMEs. For these companies, the requirements of the PPWR – such as minimum recyclate content or design-for-recycling obligations – may pose serious financial and logistical challenges. Since large corporations will likely have easier access to recyclates, SMEs risk being disadvantaged or even excluded from the market. Jung also warns that powerful corporations may exert disproportionate influence. That’s why it’s vital, he says, for SMEs to organise themselves early, make their voices heard and engage political decision-makers.
Tom Ohlendorf from the World Wide Fund for Nature (WWF) is another critic of the PPWR. The Senior Manager for Circular Economy with a focus on packaging says: “The targets cannot be achieved with today’s collection and sorting systems. We urgently need new input streams and technical standards.” He also calls for greater transparency around recyclate distribution in Europe: “What ends up in the yellow bag in Spain differs drastically from Germany. That’s not harmonisation – it’s random.” Ohlendorf adds: “All requirements listed in the EU packaging regulation should apply across all materials. Special rules for plastics and exemptions for other materials lead to unintended shifts and goal conflicts. One example is the growing use of paper-based composite packaging.” Paper is not automatically more sustainable, he says. Simply replacing plastic with paper is not enough to tackle the rise in packaging waste. The real goal must be to slow down material flows, reduce overall consumption and close the loops. “Top priority must be given to waste prevention and optimised reuse systems,” he concludes.
Recyclability assessments also remain controversial. A packaging consultant warns: “By 2030, 50 percent of today’s products won’t be on the shelf anymore because they’ll be classified as non-recyclable – including small items like lipstick or glue sticks.” The reason? They’re too small for sorting systems. She calls it “absurd”. Article 10 on packaging minimisation is also causing serious issues. “We don’t make packaging bigger or heavier for fun – there are logistical, technical and hygiene requirements,” she explains. Changing machinery requires multi-million-euro investments. And many production lines – especially fast-running food lines – can’t simply be reconfigured. The makers of the PPWR, she says, lack understanding of industrial processes. That hits a nerve.
Planned Economy Approach is Killing Innovation
Another criticism is the loss of differentiation. “The PPWR is heading towards a kind of socialist packaging,” one packaging expert says pointedly. What he means is: standardised, legally defined packaging formats with no room for differentiation – whether for branded whisky or discount vodka. “If everything looks the same, brands lose their power, and customers go for the cheaper private label.”
The effects of the PPWR are already reaching deep into retail distribution logic. “The higher the requirements, the more vertical integration becomes worthwhile,” insiders say. Lidl, with its Prezero system, is leading the way. “Whoever controls the loops controls market access,” explains Prof. Carsten Kortum from Heilbronn University of Applied Sciences. Increasingly, retailers are developing their own packaging solutions – or acquiring packaging manufacturers outright. “It makes total sense,” says one packaging consultant, “because packaging ultimately determines whether a product is available.” Whoever controls the raw materials, the machinery and the know-how, controls the shelf – by 2030 at the latest.
Meanwhile, traditional brand manufacturers are coming under pressure. “If packaging no longer differentiates, the branded product loses its value,” says one retail executive. Private labels are on the rise. Studies show that, in case of doubt, consumers increasingly choose the cheaper lookalike. The PPWR could accelerate this trend even further.
The accusation of central planning looms large. Too many demands, too little infrastructure, too much symbolism. “It’s killing innovation,” say several industry observers. They call for a more realistic timeline, clearly defined exemptions and, above all: common sense instead of overregulation.
The conclusion from one industry insider is intended as a wake-up call: “A regulation like the PPWR is right and necessary – but it mustn’t end up ensuring that only the big players survive.” Small and medium-sized packaging companies must act now if they want to remain viable by 2030.
The clock is ticking. It’s already five to midnight!
Guest article by Matthias Mahr
