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5 Central Challenges in New Draft of Executive Order...

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5 Central Challenges in New Draft of Executive Order…

... and many other issues. Emballageretur has submitted our consultation response to the latest draft of the Executive Order on certain requirements for packaging, extended producer responsibility for packaging, and other waste collected with packaging waste. Read here to get the full overview.
Date: November 6th, 2024

For nearly two years, Emballageretur has been providing input on the legal framework that will shape the Extended Producer Responsibility for Packaging. Along the way, we have repeatedly pointed out specific issues that could hinder producer responsibility in several ways.

Unfortunately, the new draft of the executive order shows that these concerns are still not being sufficiently addressed.

Therefore, we have once again highlighted the challenges in our latest consultation response.

There are particularly 5 points that we are focusing on:

 

  1. Administrative costs and increased bureaucracy

The Extended Producer Responsibility for Packaging is intended to be a simple and efficient system, where the cooperation between Producer Responsibility Organisations (PROs) and municipalities becomes less complex. Therefore, it is highly concerning that the upcomming producer responsibility still seems to bring significant administrative burdens and extensive bureaucracy along with it.

At Emballageretur, we also see a troubling imbalance in the proposed structure, which primarily benefits municipalities over producers.

This imbalance could mean that the main purpose of the producer responsibility — to reduce packaging waste, streamline its handling, and promote the development of environmentally friendly packaging — risks being lost in a jungle of bureaucratic processes and cumbersome procedures.

The increased bureaucracy could also drive up the prices of packaged goods when the producer responsibility takes effect. Still, it is difficult to assess the full consequences, as the latest executive order does not provide a clear picture of this.

Therefore, at Emballageretur, we are critical of whether concrete economic calculations have been made regarding the costs of this additional administration for Danish businesses — beyond the fees that producers already have to pay.

Emballageretur urges that both now and during the 2027 evaluation, efforts be made to actively reduce the administrative burdens on Danish businesses.

Read more: Draft for the new regulation is ready: Here are 7 important news

 

  1. Financial Clearing House ensures fair competition

With the Extended Producer Responsibility for Packaging, around 15,000 Danish businesses must manage costs of DKK 2.3 billion annually.

However, the chosen hybrid model creates unequal competitive conditions that producers cannot influence themselves. Unequal municipal costs mean that two identical producers could end up paying significantly different amounts for the same service, depending on whether they are linked to an expensive or cheap municipality.

Emballageretur has calculated the differences and found that the costs for similar producers can vary by as much as 19%.

Such an imbalance could harm businesses’ competitiveness and thus work against the purpose of the producer responsibility: to promote environmentally friendly packaging solutions.

To ensure fair competition and uniform cost conditions, we propose the establishment of a Financial Clearing House. This unit would receive and distribute municipalities’ invoices and allocate costs proportionally among producers so that everyone pays the same price for the same service.

The Fnancial Clearing House model, which Emballageretur has proposed several times, can ensure a more transparent and fair distribution of costs and help businesses focus on climate and environmental goals without being hindered by competition-distorting price differences.

Without a Financial Clearing House, we risk larger players gaining market advantages, while smaller or new players are excluded, weakening the competitive conditions.

To ensure a sustainable, fair, and competitive solution, Emballageretur therefore calls for a Financial Clearing House to be a central part of producer responsibility for packaging.

Read more on this subject: Inadequate legislation can lead to distortion of competition and chaos in waste handling

 

  1. Need for transparency in municipal fees

It is crucial that all municipalities calculate and report their costs for producer fees in the same way, but since no common service level for waste collection has been established, it becomes difficult to compare and assess municipal costs consistently.

Therefore, Emballageretur recommends that common templates and standards be developed within the producer responsibility cooperation forum. This would create transparency and ensure that all relevant data is collected and reported consistently.

Additionally, we suggest that greater uniformity be introduced in the rules for different producer responsibilities — such as those that already apply to electronics and batteries.

Common rules will ensure fair conditions, reduce the administrative burden, and make it easier for businesses and collective schemes to comply with producer responsibility.

 

  1. Lack of registration and reporting — the fight against “free riders”

By the end of October 2024, only 5,700 businesses had signed up for the producer responsibility scheme and reported their packaging volumes for 2024.

This is far below the 15,000 businesses that authorities have estimated will be covered, meaning many are not contributing to the scheme on equal terms.

The low registration creates unfair competition for businesses that are already complying with the rules.

We recommend that authorities develop a plan to get the remaining businesses to sign up and enforce rules against those avoiding their responsibility. Platform companies, such as Temu and Amazon, which contribute to packaging waste, should be prioritized, as many of them are not yet registered.

At Emballageretur, we support the introduction of clear rules that oblige authorities to supervise producer responsibility for packaging, electronics, and batteries.

The nearly 20 years of experience from our sister schemes in these two producer responsibilities have shown us that a lack of supervision has meant that law-abiding companies have shouldered the costs while others have avoided their obligations.

To ensure effective supervision, we recommend two central measures:

  • Regular inspections
  • Stricter sanctions with a real deterrent effect.

We should also introduce new measures that limit opportunities for free riders to operate without complying with the rules — for example, by making registration in the producer responsibility register a prerequisite for public procurement and as documentation for a responsible supply chain.

Emballageretur urges that producers and collective schemes be involved in the development of the supervision plan, and we are happy to contribute to the work to ensure effective solutions.

 

  1. Focus on the development of the producer responsibility going forward

The implementation of the Extended Producer Responsibility for Packaging marks a significant change in Denmark.

Therefore, Emballageretur recommends that the system be closely monitored in the coming years with particular attention to cost-effectiveness, administrative burdens, and the incentives that producer responsibility creates.

The quality of recycling and the system’s ability to meet the EU’s recycling targets should also be prioritized.

Although producers must meet recycling goals, it is important to acknowledge that success in this area requires broad cooperation.

Municipalities play a significant role in waste collection, and their collection methods have a substantial impact on how much can be recycled.

At Emballageretur, we therefore urge the Ministry of the Environment to examine how different municipal collection methods affect recycling rates and the quality of materials.

When the producer responsibility rules are evaluated in 2027, consideration should also be given to whether waste collection rules need to be adjusted to ensure an effective and sustainable system.

Definitions, Deadlines, and Other Points in the Consultation Response

In addition to the general concerns outlined, there are other points in the executive order that we address in our consultation response.

We ask authorities to:

  • Provide a clearer definition of the registration of single-use packaging, what costs should be considered operational costs, and the requirements for glass packaging.
  • Clarify what is meant by “a producer ceases to make packaging available,” as there will be cases where producers periodically stop making packaging available during a calendar year.
  • Postpone reporting on packaging made available. This is based on inquiries from our members, and because we see challenges with the proposed effective date of 31/12-2024, as well as the provisions that actual packaging volumes made available in 2024 should be reported by June 1, 2025.
  • Clarify requirements for reporting on packaging made available for reuse. We have noticed a great deal of uncertainty among our members about the reporting requirements for reusable packaging. It seems that the requirements primarily concern beverage packaging, but the application of the rules to pallets and internal packaging is causing confusion. Producers might be obligated to report pallets when they are introduced into the Danish market, even though they are part of transportation and are returned. This will create a logistical challenge as many producers outsource logistics and lack tracking systems at the pallet level. At the same time, there is uncertainty around internal packaging used in production and often transported across borders.
  • Make adjustments to the allocation period to ensure better practice regarding producer responsibility for packaging and other producer responsibilities.

We dive into many more issues and challenges in the latest draft of the executive order.

Read the consultation response in full.