02/12/2025

Eco-Fee-Modulation

Eco-fee modulation: What lies behind EU subsidies for packaging

Content:

 

It may sound complicated, but it can have a positive impact on your packaging licence costs in various European countries. In addition to the obvious advantages in terms of environmental protection and marketing, sustainably designed packaging is also becoming more attractive because of increasing political efforts to promote it. An important instrument in this context is eco-fee modulation, which is part of circular economy policy at both national and European level. We explain what this is all about.

 

How does packaging licensing work in Germany and Europe?

In short: The European Packaging Directive states that companies that place packaging on the market are obliged to pay for the disposal of their packaging. This is known as extended producer responsibility. The exact requirements and obligations currently vary from country to country, as each country has created its own laws to implement the European directive. However, the basic principle is the same: Those who place packaging on the market pay a fee to an EPR system, which in turn takes care of the collection, sorting and recycling of packaging waste.

In Germany, for example, you can fulfil your obligations by registering with the LUCID packaging register and licensing your packaging with a dual system (such as Interzero Recycling Alliance via Lizenzero). A detailed explanation can be found here.

 

Brief explanation: What is eco-fee modulation

In addition to the positive marketing effect that sustainably designed packaging brings, it is also rewarded at the political level. Eco-fee modulation is an instrument for promoting the European circular economy. It is intended to give companies an incentive to increase their use of recyclable packaging. Some EU countries already use it to differentiate licence or recycling costs in their respective EPR systems. It is therefore a regulatory instrument that makes the amount of product levy dependent on how much a product (or its packaging) impacts the environment. In this way, it implements the ‘polluter pays principle’ in concrete terms: producers pay a proportion of the environmental costs incurred throughout the entire life cycle of their packaging.

Modulation specifically aims to create incentives for the development of sustainable packaging designs by differentiating the licence fees for sales packaging. In short, companies that use environmentally friendly packaging pay lower licence fees to EPR systems and thus save costs. On the other hand, packaging that does not meet the requirements of eco-modulation is taxed more heavily and is therefore more expensive. This approach is an important step towards an environmentally conscious economic policy that promotes ecological sustainability.

 

How is eco-fee modulation applied in practice?

The Packaging and Packaging Waste Regulation (PPWR) aims to standardise the implementation of the eco-fee across Europe. However, implementation in individual countries is still heterogeneous at present.

In principle, however, the recyclability of packaging on which the eco-fee is based is determined by the following criteria:

  • Sortability and separability
  • Raw material (paper, plastic, metal, glass)
  • Residual emptiness
  • Impurities in the material

 

A new era in packaging: the PPWR and eco-fee modulation

Until now, EPR systems with eco-fee modulation have already been in place in some EU Member States, including Italy, France, Belgium and the Netherlands. However, as the criteria varied greatly from one country to another, the EU recognised the need for Europe-wide harmonisation.

The PPWR is already being described as the most significant legislative initiative for the packaging sector in 30 years. It imposes far-reaching restrictions on non-recyclable packaging. This affects not only manufacturers within the EU, but also importers, distributors and companies from third countries that place packaging on the EU internal market. For all these companies, PPWR means more responsibility for packaging and higher costs if it is not designed to be environmentally friendly.

E-commerce companies in particular, whose business model is closely linked to shipping packaging, will feel the impact. Failure to comply can result in high levies, competitive disadvantages or even a ban on selling packaging in the EU.

The good news is that there is still enough time to gradually adapt your current packaging portfolio to the new requirements. Do you ship to different EU countries? We will take care of your packaging licensing! On top of that, we can also check for you whether the design of your packaging meets the requirements of the Eco-Fee Modulation in your target markets. If the design of your packaging does not yet meet the Eco-Fee requirements, we can also help you adapt your packaging to the standards on request.

 

How do you design packaging that complies with PPWR?


According to PPWR, recyclability means that packaging is assessed on the basis of various material and design criteria. These include, among other things:

  • Material composition
  • Residual emptiness
  • Additives and colourants
  • Labels, tapes, sleeves
  • Adhesives and composite materials
  • Closures and small elements
  • Coatings, barriers, varnishes
  • Dismantlability of different components

 

The EU Commission will publish detailed eco-design requirements for each packaging category – for 22 material and format groups (e.g. rigid PET, flexible PET, rigid PE, flexible PE, etc.). These requirements are expected by 1 January 2028. The rules for assessing large-scale recycling are to follow by 1 January 2030.

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