The German Packaging Act, known as VerpackG in Germany, is one of the most important laws for e-commerce in Germany. No matter whether you are a start-up, SME, or big player – if you sell in Germany, the laws are applicable, and the price of non-compliance is high.
If you have not heard about the packaging law yet, do not worry. Here we cover in detail the purpose of the German Packaging Act, what it means for your e-commerce business, and how you can fulfill your obligations in just a few steps.
History and purpose of the Packaging Act
The German Packaging Act, also known as VerpackG, came into force in January 2019. It is based on the latest revision of the EU Packaging Waste Directive from 2018.
Both focus on the core principle of ‘extended producer responsibility’, or short EPR. This means that producers are made responsible for recycling the packaging of their goods. The term ‘producer’, however, includes importers and retailers, too.
Through EPR legislation, the government aims to reduce packaging waste and improve recycling rates within the EU. Any party responsible for placing packaged products on the market must pay a fee for the recycling of their packaging waste.
This fee depends on the type of packaging material and is typically a few cents per kilogram.
The law thereby creates an economic incentive for companies to use recyclable packaging and fewer resources altogether. The fees are also directly used to fund the national recycling system.
Thus, compliance with the Packaging Act is a step towards more sustainability in e-commerce.
Who is affected by the German Packaging Act?
The packaging law demands a recycling fee for all packaging which typically ends up in consumer or household waste.
This means that any B2C products are affected while in some cases it includes B2B sales as well, for instance when selling to small companies, hotels, or restaurants – where packaging usually ends up in the same waste stream.
Extended producer responsibility generally affects the company which fills empty packaging with goods, or which puts packaged products on the market for the first time. Thus, the following parties are responsible for paying recycling fees:
- Those who import products from abroad and sell them within Germany
- Those who manufacture products in Germany or have them manufactured under their own brand
- Those who sell products and ad additional packaging (e.g. shipping box in e-commerce)
- Foreign companies selling directly to German consumers (cross-border b2c e-commerce)
Basically, anyone active in e-commerce selling physical goods to customers in Germany has obligations from the Packaging Act. There are also no exceptions, sales thresholds, or minimum quantities for small companies as in other countries. All obligated companies must register in the LUCID Packaging Register and obtain a Packaging License from a German recycling scheme.
What are possible consequences of non-compliance?
Pursuant to VerpackG §34, failing to comply with these obligations can result in monetary fines of up to 200,000 EUR.
Moreover, the LUCID Packaging Register is visible to the public and any competitor can easily identify if a company is registered or not. In the latter case, German law allows competitors to send a cease and desist letter which can be very costly for the recipient.
This is common practice and the main reason why following the German Packaging Act is so important even for small businesses.
Registration in the LUCID Packaging Register (ZSVR)
You can access the LUCID Packaging Register here. The registration process is easy to understand and free of charge. It should be completed before placing the first products on the market. If you have not done it yet, you should not lose time.
To know more, refer to this step-by-step video manual to register your company in LUCID:
Obtaining a Packaging License
Besides registering with the LUCID Packaging Register, you need to obtain a Packaging License to comply with the law.
To buy a packaging license, you first need to calculate your annual packaging quantities. How many kilograms of paper, plastics, glass, etc. will your business accumulate this year? This determines the price of the license – typically a few cents per kilogram waste.
You can only license your packaging with a German Dual System (authorized recycling system). These are your options:
- BellandVision GmbH
- Der Grüne Punkt – Duales System Deutschland GmbH
- Interseroh Dienstleistungs GmbH
- Landbell AG
- Noventiz Dual GmbH
- Reclay Systems GmbH
- Veolia Umweltservice Dual GmbH
- Zentek GmbH & Co. KG
An easy way to get the best price on your packaging license is to contact a consultancy agency like ecosistant that specializes in packaging compliance. For smaller quantities (anything below 1000 kilogram per year) the best way is to compare the prices of all recycling systems yourself by using an online tool.
Who must license packaging?
1.) Product- or sales-packaging
This term applies to the package of the product itself. Depending on the product type, it could be a glass bottle, plastic tube, or cardboard box; all products are packaged in one way or another.
The responsible party for licensing product packaging is generally the company that packages a product or has it packaged in their name. If the product is imported, the importer is responsible.
2.) Shipment packaging
Online retailers use additional packaging to ensure the safe delivery of their goods. This includes mailer boxes, envelopes, all types of filling material, or adhesive tapes used in the process. The responsible party is again the company that packs the products.
These are typically the online retailers themselves, but can also be external fulfillment service providers, in case their company name, address, or brand is visible on the package. (Example: Amazon FBA shipments in the typical Amazon-branded boxes.)
This leaves plenty of room for interesting constellations in e-commerce:
Do you purchase your products from a producer or retailer from within Germany and sell it via an online shop? 🡪 In this case, you must only license the shipment packaging.
Do you purchase the same products from China, for instance? 🡪 You must license the product packaging as well as the shipment packaging.
If you sell the same products via Amazon FBA Amazon must license the shipment packaging.
3.) Service packaging
This type of packaging is especially relevant for restaurants or cafés. It is typically filled at the time and place of consumption. Prime examples are pizza boxes or coffee-to-go cups.
Although the company that packages the product is generally responsible for service packaging as well, obligations can be transferred to the manufacturer of the packaging. This means that service packaging can be purchased pre-licensed, in which case the café or restaurant has no further responsibilities.
4.) Deposit bottles or returnable packaging
These are excluded from the obligations of the law, as they are returned and do not end up in consumer waste.
Packaging laws in other countries
There are packaging laws in other countries besides Germany as well. As mentioned earlier, the German Packaging Act is based on the EU Packaging Waste Directive.
Consequently, each EU member state has its own packaging law, with different rules, institutions, and recycling systems. And even some countries outside the EU have passed similar legislation.
When online shops offer international shipping, they must comply with the law of the destination countries.
As research for every country can be cumbersome, a digital compliance service can save considerable amounts of time and money.
For larger businesses, it may be advisable to outsource compliance altogether.
It is time to take recycling-compliance seriously!
In recent years, Germany as well as many other countries have enacted packaging laws for e-commerce to involve retailers in the recycling of packaging waste.
If your company has legal obligations, you should not lose time and act now. You can use the information we have provided in this article to get compliant and contribute to the recycling of your packaging.
Andreas Landes managed the Europe-wide logistics of a major Japanese online store, where he stumbled upon the complexity of packaging- and waste-laws in the EU. In 2019, he co-founded ecosistant to help online retailers with their recycling-compliance and make the e-commerce sector more sustainable.