Municipal Packaging Tax: Dispute Over Costs and Environmental Benefits

Municipal packaging taxes cover just 0.7 per cent of total packaging consumption in Germany. This is the finding of a study by GVM Gesellschaft für Verpackungsmarktforschung and ifeu – the Institute for Energy and Environmental Research Heidelberg. According to the study’s authors, the tax also imposes substantial economic and administrative burdens on businesses, municipalities and consumers, while contributing little to waste prevention and climate protection. Eight business organisations commissioned the study: Allianz Verpackung und Umwelt, the German Federal Association of System Catering, the German Chamber of Commerce and Industry, the paper industry association Die Papierindustrie, the German Folding Carton Association, the German Retail Federation, the German Association of Paper and Film Packaging, and the service packaging association Pro-S-Pack. The commissioning organisations oppose municipal packaging taxes.

“The study shows that municipal packaging taxes fail to achieve their central objective of effectively reducing packaging waste. Instead of genuine waste prevention, they create additional burdens for the hospitality sector, retailers, consumers and municipalities. Additional bureaucracy is no substitute for effective environmental policy,” commented Kristina Harrer-Kouliev, head of the legal department at the German Federal Association of System Catering (BdS), in a DIHK press release published on 6 August 2026.

The business associations also question the choice of policy instrument. The DIHK advocates expanding existing circular economy systems and encouraging reductions in material use.

“The study is consistent with what we hear from businesses already affected. The municipal packaging tax is neither effective nor low on bureaucracy. Rather than imposing new burdens, existing circular economy systems should be strengthened and developed further in a targeted way. Expanding effective recycling systems and innovative solutions to reduce material use would be considerably more effective,” explains Dr Sebastian Bolay, head of Energy, Environment and Industry at the German Chamber of Commerce and Industry (DIHK).

The Association of German Cities, by contrast, focuses on the impact on public spaces. It believes municipal packaging taxes can help reduce litter. Dr Christine Wilcken, the association’s deputy chief executive, highlighted this point in comments to the Frankfurter Allgemeine Zeitung: “A municipal packaging tax can be an effective tool against litter in cities. Recent findings from Konstanz, where a packaging tax has been in place since the beginning of 2025, demonstrate this. Between January and September 2025 alone, the volume of waste there fell by 14 tonnes compared with previous years.” However, whether and how a packaging tax works in a city depends heavily on local circumstances, she said. The decision must be made by local policymakers.

Alongside waste prevention, municipalities also consider the relationship between tax revenue and administrative costs. In a press release, Helge Kropat, head of the tax department in Konstanz’s municipal treasury, gives a positive assessment of the fiscal impact: “In Konstanz, we can see that the packaging tax more than pays for itself. Revenue is considerably higher than expected – for the first year of the packaging tax, we currently have a cost-benefit ratio of 1:20. Looking at administrative costs in isolation, as the industry study does, therefore fails to reflect the cost-benefit ratio.”

Assessing Local Experience

A positive outcome for the municipal budget does not, however, answer the question of environmental benefits. This is where Freiburg’s criticism comes in: the decisive factor, it argues, is whether the tax supports the shift from single-use to reusable packaging within the city.

“The study confirms that the packaging tax can significantly encourage the transition to reusable solutions. Contrary to what the study suggests, its aim is not to measurably reduce Germany’s total packaging consumption or CO₂ emissions, but to advance reuse and resource conservation within the scope of municipal action. Municipalities that have introduced such a tax are actively using this scope,” explains Dr Klaus von Zahn, head of the City of Freiburg’s Environmental Protection Office, in the Initiative Verpackungswende press release dated 26 August 2026.

Environmental Action Germany (DUH) also criticises the study’s assessment criteria. It considers national waste volumes and emissions an unsuitable benchmark for assessing the impact of a municipal measure. “Anyone assessing municipal packaging taxes must use their local impact as the benchmark. Instead, the study compares potential savings with national waste volumes and emissions. This approach can be used to downplay the impact of almost any local environmental measure. Actual experience in Tübingen, Konstanz and Freiburg tells a clear story: single-use packaging is declining, waste is being prevented and reuse is being strengthened,” explains Barbara Metz, executive director of DUH, in the joint Initiative Verpackungswende press release. In Tübingen, 73 per cent of the businesses surveyed had reduced their consumption of single-use packaging since 2019. DUH therefore continues to call for taxes on single-use packaging as an effective instrument for reducing waste and encouraging reuse.

Tax as an Incentive for Reuse

Another point of contention is the assessment of reusable packaging systems. While the study links their environmental benefits to sufficiently frequent use and reliable returns, WWF emphasises that the tax could help improve precisely these conditions.

“The study confuses cause and effect. It assesses reuse in its current state, in which it is still not sufficiently widespread in many places,” states the press release published by WWF. In doing so, the study turns low numbers of reuse cycles into an argument against reusable packaging. Yet the packaging tax is intended to encourage more people to use it. Reusable packaging can offer environmental advantages after just a few cycles. Reusable packaging systems in cities with a packaging tax are already reporting rising return and usage rates. “Anyone who ignores this development and instead counts reusable containers as additional packaging consumption underestimates the potential of reuse,” says Eva Badem, project manager for reuse at WWF Germany.

The controversy illustrates how widely assessments and conclusions differ. A robust evaluation therefore depends on how single-use packaging consumption, the actual use of reusable packaging systems and local litter levels develop – and on the costs and effort involved. The experience of individual cities provides some indications. The key question remains how far these findings can be applied to other municipalities and how much of the change can be attributed to the tax itself.