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When it comes to environmental protection, everyone has to get involved, including companies. The German government has introduced new packaging regulations that will apply from January 1st 2019. The Packaging Ordinance has become the Packaging Act. Why is this relevant to you? If you are a US business owner who sells to the German market, and you ship your goods in packaging, you will be required to comply with the new legislation. Here is an outline of the new changes and how you can implement them.
What does the Packaging Act require?
Until December 31st 2018, retailers selling to the German market were required to comply with the German packaging law known as Packaging Ordinance (VerpackV). This had been in force since 1991 and transferred responsibility for the disposal of certain materials from the municipal administration to industry. The aim was to allow manufacturers and distributors of packaging materials to share the disposal costs. Therefore, the dual system was created, which is recognizable by the Green Dot.
On January 1st 2019, the Packaging Act (VerpackG) will replace this ordinance. The legislator’s aim is not only to make sure companies contribute more to environmental costs, but above all to generally reduce packaging waste as much as possible. In addition, recycling and reutilization will be further promoted. In particular, the use of one-way drinks packaging is to be significantly reduced by the new packaging law.
In the past, dealers repeatedly failed to meet their responsibilities and did not contribute to the disposal costs. This will also be covered by the new packaging law. Since the responsible companies have up until now had to cover the costs for those who refused to pay, the packaging law should also contribute to fairer competition.
The German federal government is also complying with EU directives with VerpackG.
What will the changes be?
Like the Packaging Ordinance, VerpackG also applies to all packaging that is disposed of as waste by the customer. At the moment, these are being transported from the customer using a yellow bin, waste glass container and paper bin. According to the old ordinance, manufacturers of this packaging and initial distributors already had to contribute financially to the disposal of these materials. However, few manufacturers and distributors have done so. The largest change in the new packaging law is that one must now register themselves as a dealer, before they can bring any packaging materials into Germany.
Registering in the LUCID register can be done free of charge on the “Stiftung Zentrale Stelle Verpackungsregister”. Currently, the website is only available in German.
The LUCID central registry assigns a unique registration number to each company that has duly registered. This number is specified again for the Dual System. Those who do not have a registration number can no longer participate in the Dual System from January 1st 2019 and are therefore not allowed to circulate packaging materials.
Registering with LUCID does not replace a contract with a waste disposal system. Producers and manufacturers must handle this separately.
In LUCID, dealers and manufacturers give their commercial register number and tax number – as well as all the brand names of the products they sell. The register is public and open to customer scrutiny. In this way, VerpackG provides additional transparency.
In the past, manufacturers had to indicate how much and what type of packaging they had placed on the market so that the level of cost sharing could be determined. With the new packaging law, this information does not just have to be made available to the disposal system, but is also to be forwarded to the Central Packaging Register Foundation in the same form.
The Foundation is also responsible for publishing information on packaging materials that require compliance. This is done through a catalog of packaging subject to system participation (currently only available in German).
What does this mean for companies?
The new Packaging Act affects everyone who has already been held responsible by the Packaging Ordinance. This means that everyone who is considered to be the initial distributor will be affected. Every manufacturer or retailer who issues a filled packaging (which excludes the manufacturers of packaging themselves) to a customer (B2C) for the first time is required to take part in packaging disposal. If the manufacturer is not located in Germany (e.g. the US) and the product is only entering the German market via an importer, this importer is regarded as the initial distributor.
Packaging waste also expressly includes repackaging and shipping packaging. An online retailer who sends an already packaged product in a shipping crate or parcel must also pay for this crate or parcel, as well as for filling material and adhesive tape. Nothing has changed in this area. Reusable packaging continues to be exempt from system participation.
What has changed with the new packaging law, however, is the registration. Anyone who is not registered in the LUCID public register from January 1st 2019 cannot create a valid contract with a dual system and therefore may not sell packaged goods in Germany (sales ban). Anyone who disregards the law will face severe penalties. If a company is not properly registered and still offers goods (an actual sale is not necessary), a fine of up to €100,000 (approx. $115,000) per case may be imposed. If one chooses to ignore the disposal law completely, therefore not taking part in disposal costs, the punishment is doubled.
Registration must be carried out by the entrepreneur themselves. Commissioning a third party – like a broker – to do this for you is not permitted.
In the past, the packaging law stated that entrepreneurs had to indicate each year what quantities and types of packaging they were putting into circulation. This had to be done twice: at the beginning of the year, you offered an estimate and at the end of the calendar year the company finally submitted the actual quantity. This is still the case, but what has changed is that these two declarations must also be sent to ZSVR from 2019 onwards. Every report to the system (if companies report actual stocks several times a year) must therefore be made twice. This will be mandatory from January 1st 2019. Failure to notify the Central Office will result in fines of up to €10,000€ (approx. $12,000).
For large companies, the obligation to submit a declaration of completeness also continues to apply with the new packaging law: Anyone who places more than 60,000kg of glass, 50,000kg of paper/cardboard or 30,000kg of metal/plastics on the market must have the actual quantity of packaging certified by a registered inspector. This declaration must also be filed in the LUCID register in future. If this obligation is not complied with, fines of up to €100,000 (approx. $115,000) may be imposed.
Companies that provide goods to the German market and do not comply with the new Packaging Act will face heavy fines.
What do dealers and manufacturers have to do to comply with VerpackG?
- Register with the central packaging register office
- Enter their registration number in the Dual System
- Send messages about the amount of packaging both to the Dual System and to do ZSVR.