Green Dot & Packaging Waste Directive Compliance in Europe
In the early 1990s, Europe (and especially Germany) realized it had a problem. Landfill capacity was shrinking, yet the amount of packaging and other waste generated by industry and consumers continued to grow. Faced with an impending long term crisis, Germany passed legislation to help curb the amount of packaging waste being generated. At the time, packaging accounted for 25 to 30% of the waste in European landfills and little was being done by industry to reduce the volume of packaging that accompanied their products.
Taking the lead, Germany passed the Packaging Ordinance in 1990 and founded Duales System Deutschland GmbH to help companies comply with the new legislation. This organisation and its subsidiaries collect, sort and recycle packaging waste. Duales also started the well known Green Dot® program, which will be discussed in more detail below.
Other governments throughout Europe saw the wisdom of Germany's efforts and in late 1994 the European Union (EU) adopted the European Packaging Directive, modelled on Germany's Packaging Ordinance, and now known as Directive 94/62/EEC on Packaging and Packaging Waste. In 2004, Directive 94/62/EEC was amended by Directive 2004/12/EC2. The goal was to harmonise national laws concerning the management of packaging waste and provide a high level of environmental protection.
One of the provisions of the Directive (and a basic tenet of European law) stated that none of the European countries would have an unfair competitive advantage over the others. Therefore, to avoid trade barriers, Duales System Deutschland GmbH (Germany), Eco-Emballages S.A. (France), FOST Plus (Belgium) and ARA Altstoff Recycling Austria AG formed an umbrella organization called PRO EUROPE which stands for Packaging Recovery Organisation EUROPE.
PRO EUROPE's mission is to help the other EU countries establish and maintain effective national packaging compliance organisations. This Directive covers all packaging placed on the market, regardless of whether it is released at the industrial or retail level. The purpose of the legislation is to provide an incentive for companies to reduce the amount of packaging that accompanies their products through educational and fee-based recovery programmes. Producer responsibility and the involvement of industry is the most efficient and effective approach to recover packaging instead of packaging taxes and other mandatory measures by which industry loses its flexibility and restricts a consumer's choice, notes Joachim Quoden, Managing Director of PRO EUROPE.
To date, the Packaging Waste Directive has been transposed into national law in the majority of European countries. Each country has specific recovery and recycling targets for each material that must be met in a specified time period. For countries such as Germany and Belgium, the recovery and recycling targets are quite high due to the mature nature of their programmes and widespread public participation. Bulgaria, Romania and other newer EU members, by contrast, have relatively immature programmes and lower targets.
Green Dot
Green Dot is a registered trademark of PRO EUROPE and is protected in 170 countries. PRO EUROPE has sublicensed the Green Dot trademark to numerous European countries plus Canada and Turkey. It is not a recycling logo but merely shows that the manufacturer has signed an agreement with a packaging recovery organisation in that country and the appropriate fees are being paid. By doing so, they are absolved of their responsibility to recover their own packaging. The fees you pay help fund recovery and recycling efforts by that organisation.
PRO EUROPE helps national recovery organisations offer a better service to their clients (industry) and administers the use of the Green Dot logo as a symbol of producer responsibility and efficient packaging waste management. PRO EUROPE acts as the worldwide guardian of the Green Dot trademark (outside Germany), promotes education about the benefits of reducing packaging waste and works to harmonise the services offered by the national collection and recovery schemes.
The Green Dot is the most widely-used trademark in the world, and certainly one of the most recognisable in Europe. More than 130 000 companies use the Green Dot trademark worldwide. Over 200 million people dispose of their packaging via a collection system set up by a Green Dot organisation and more than 14.7 million tonnes of used packaging were recovered and recycled in 2005 by these European organisations.
Compliance Options
It is important to understand the background of how the Packaging Waste Directive got started and how it has evolved in order to gain an understanding of how the Directive is applied practically. Still, it can be confusing. Despite the formation of PRO EUROPE and a well established network of national packaging recovery organisations in most European countries, there are still numerous Green Dot licensing organisations with whom a manufacturer may have to deal in order to be in compliance throughout Europe.
Manufacturers essentially have two options for complying with the Directive. They can join a pan-European compliance scheme such as Green Dot or choose to come up with their own packaging recovery programme that complies with the packaging waste recovery targets set forth in the national laws.
Participation in the Green Dot recovery scheme - or any scheme - is not mandatory. A company may choose to carry out the obligation to comply on its own. This may make sense, for instance, if the company markets a very small amount of products in the EU or a specific country. For example, if a company manufactures magnetic resonance imaging scanners, it may be easier to recover the ‘packaging' associated with the relatively small number of installations done each year. If the company does choose to create its own compliance scheme, it is still obliged to report the amount of packaging waste that it recovers.
Although the Green Dot programme is the most widely-known and established in Europe, it is not the only such scheme. Many others exist, mostly on a national level. There are 19 recognised schemes in England and Wales, for example. Only one (Valpak Ltd) is officially sanctioned by PRO EUROPE to offer the Green Dot programme in the UK. None have the widespread recognition and acceptance that Green Dot enjoys on a pan-European level.
Using the Green Dot Logo
Only companies that have signed a licence agreement can use the Green Dot trademark. The use of the Green Dot trademark and participation in the Green Dot programme allows manufacturers who sell their products in the EU to comply with the EU's Packaging Directive, which requires producers to collect their packaging waste. Companies that are registered in the Green Dot programme are exempted from their individual obligation to take back and recycle used packaging.
Let us say that a manufacturer of knee braces has joined Eco-Emballages, the national recovery organisation in France. They have paid licensing fees to use the Green Dot logo on their packaging and pay ongoing fees for packaging sold in France.
However, they also have a distributor in Germany that sends products all over Europe. The manufacturer is obliged to join the Green Dot programme in all countries where their product is sold and pay the appropriate fees depending on the volume of packaging entering each country. If they use the Green Dot logo in Germany without permission, that would be a violation of trademark law.
The Green Dot logo has been used for more than a decade and European consumers and retailers recognise, and more importantly, look for the Green Dot logo on goods they buy. As a result, more pressure is being placed on manufacturers from the distribution and retail levels to make sure their products carry the Green Dot trademark. Not having it may be a competitive disadvantage.
Payment of Fees
Green Dot fees are paid by the producers of packaging. The fees themselves vary by country and differ based on the type of material (e.g. paper, plastic or metal). The structure is based upon the ‘producer pays' principle and takes into account the varying costs of collection, sorting and recycling of various packaging materials. The system encourages waste reduction since manufacturers that cut down on packaging waste ultimately pay less in fees.
Essentially, there are two fees you may need to pay. Some countries only charge an annual licence fee. Others only charge a variable fee based on the quantity of packaging generated in their country. Finally, some countries levy both - an annual Green Dot licence fee and variable fees. Fees are usually based on packaging material type, ‘recyclability' of the material, weight and in some countries, a volume fee per product unit sold.
Depending on the volume of the product sold, payments of the Green Dot fees are made on a monthly, quarterly or yearly basis. The frequency of reporting is determined by country. Specific fee amounts are determined using samples of packaging and the quantity shipped to each country. In all cases, each national recovery organisation requires a report to be submitted showing the amount of packaging that stayed in their country (not the amount initially shipped there) and compute the appropriate fees to be paid. Based on that report, some countries will generate invoices, but others will ask for payment based on the packaging volume report submitted. This often presents a problem for larger companies whose accounting departments require an invoice for payment to be made.
Application to Medical Devices and In Vitro Diagnostics
The Packaging and Packaging Waste Directive applies to all packaging, independent of industry. There is some confusion in this regard because there are some limited exclusions for specific types of packaging used in the medical and pharmaceutical industries in Article 20 of the original and revised Directives. It reads, ‘The Commission, in accordance with the procedure outlined in Article 21, shall determine the technical measures necessary to deal with any difficulties encountered in applying the provisions of this Directive in particular to inert packaging materials, put on the market in very small quantities (i.e. approximately 0.1% by weight) in the European Union, primary packaging for medical devices and pharmaceutical products, small packaging and luxury packaging.' Currently, no ‘technical measures' have been published and therefore medical device companies are bound by the provisions of the Directive as written.
Examples of Application
EXAMPLE 1
A manufacturer of examination gloves packages their gloves 100 to a package inside a small cardboard box used to dispense the gloves. The gloves are then packaged inside a larger corrugated cardboard box with 36 cardboard boxes inside. The corrugated cardboard boxes are then loaded onto a wooden pallet and shrink wrapped with plastic for shipment to the EU.
Obligation: In this case, the manufacturer is responsible for reporting the volume and weight of the cardboard boxes, corrugated cardboard outer boxes and the shrink wrapping. The wooden pallet, although considered transport packaging, does not count as it is considered a ‘road, rail, ship or air container' excluded in Article 3 of the Packaging and Packaging Waste Directive.
EXAMPLE 2
A manufacturer of a delicate electronic instrument packages their device inside a clear plastic bag, which in turn is placed inside a hard plastic protective case. The hard case is then placed inside a cardboard box with removable foam inserts. The device includes a removable warning sticker. An Instructions for Use manual is included along with a CD, which itself is placed inside a rigid plastic CD case. Both the Instructions for Use and CD are finally placed inside a separate, re-sealable plastic bag.
Obligation: In this case, the cardboard box, foam inserts, clear plastic bag that wraps around the instrument inside its hard case, plastic bag that holds the Instructions for Use and CD, and the sticker are considered packaging and must be reported. The hard plastic case that holds the instrument is NOT considered packaging. According to Article 3 of the Directive, this would NOT be considered packaging because it ‘is an integral part of a product and is necessary to contain, support or preserve that product throughout its lifetime and all elements are intended to be used, consumed or disposed of together.
This is also why the blister packs used so commonly with pharmaceuticals are not considered packaging, nor is the primary packaging for sterile medical devices. Any other packaging associated with those products (outer box) would be considered packaging.
EXAMPLE 3
A manufacturer of in vitro diagnostic assays packages their plastic cassettes containing a reagent inside a non-sterile foil bag. The cassettes inside the bags are then placed in a cardboard box, with 20 to a box. The cardboard boxes are packaged into varying sizes of corrugated cardboard boxes, depending on the order size.
Obligation: In this case, the manufacturer is responsible for reporting the volume of corrugated cardboard and cardboard boxes, plus the volume of foil bags. However, even though the plastic cassettes containing the reagent are used and then immediately disposed, they are not considered packaging because they are a bio-hazard. Some would argue that because the foil bags are filled with a gas that prevents evaporation of the reagent in the cassette, the foil is necessary to ‘contain, support or preserve' the product ‘throughout its lifetime' and therefore does not constitute packaging.
What Constitutes Placing a Product on the Market?
If a company manufactures a device in the USA and ships them to a master distributor in Germany who then sells the product throughout Europe, should the packaging recovery obligation be to the packaging scheme in Germany (Duales System Deutschland GmbH) or to each individual scheme in the countries where the products are sold? That question perplexes many companies.
As most companies sell through distributors and not directly to their end-user, it can sometimes be a problem for a manufacturer to extract country-specific sales data from their distributor. Sometimes the manufacturer does not know exactly how many of their products end up in one country versus another because the distributor holds all of this information. Nevertheless, the national organisations require the licensee to report exact volumes of packaging dispensed in each country. The distributor has this information of course, but the manufacturer often has a challenge getting it from the distributor. In many cases, the distributor fulfils this role for the manufacturer.
A further complication is the fact that most national compliance organisations require the licensee to be based in their country. That is a problem for companies located outside Europe or those selling through master distributors who distribute to multiple countries.
EU Packaging Waste Directive Compliance and Enforcement
European government authorities and Green Dot organisations are increasing surveillance and their regular checks of retail locations to ensure that all products displaying the Green Dot trademark are registered under a genuine Green Dot licence. If they are not, the manufacturer is infringing on international trademark law and will be held accountable.
In the UK, for example, it is considered a criminal offence not to comply with the Packaging Waste regulations and cases may be heard by the High Court. Similar legal action can be taken in other European countries as well.
Conclusion
Legal obligations aside, companies should heed their moral responsibility to comply with the regulations. Recovery and recycling is widely embraced in Europe and those who choose not to participate may feel pressure from retailers or distributors who refuse to carry their products or end-users who consciously or unconsciously choose another brand based on their perception of the company's dedication to sustainability. Therefore, the relatively small amount paid to maintain compliance can easily be offset by a gain in sales among environmentally-conscious buyers.
The smartest companies look beyond the seemingly complex maze of regulations and embrace the ultimate goal of the Directive - to promote sustainability in Europe through a reduction in the amount of packaging generated.
References
1. Official Journal of the European Communities, 1994, L365, 10 (31 December 1994).
2. Official Journal of the European Union, 2004, L47, 26 (18 February 2004).
3. Personal communication with Joachim Quoden, Managing Director, PRO EUROPE, March 2007.
