Understanding packaging licensing in Germany: A comprehensive guide

In today’s environmentally conscious world, packaging plays a crucial role not only in preserving the quality and safety of products but also in minimising the impact on the environment. In Germany, a country known for its strong commitment to sustainability, packaging licensing has become a vital component of its waste management and recycling efforts. In this article, we will delve into the complexity of packaging licensing in Germany, exploring its purpose and regulations within the principles of the so-called Extended Producer Responsibility of a modern circular economy.

The purpose of packaging licensing

Packaging licensing in Germany is rooted in the principle of Extended Producer Responsibility (EPR), which shifts the burden of managing waste from municipalities to producers and distributors. The overarching goal is to reduce the environmental impact of packaging waste and encourage manufacturers to adopt more sustainable packaging practices. By holding businesses accountable for the life cycle of their products’ packaging, Germany aims to promote resource conservation, energy efficiency, and waste reduction.

Packaging licensing is regulated by the German Packaging Act (VerpackG). The Packaging Act is designed to ensure that the environmental impact of packaging waste is reduced. For companies to operate competitively, it is therefore unavoidable to be aware of all obligations and to fulfil them in a legally compliant manner.

Important explanations of terms at the beginning

According to the German Packaging Act, the term “manufacturer” means the following:  

• Companies that fill empty packaging with goods and place them on the market in Germany for the first time (initial distributors, the first to place). 
• Companies that import packaged goods into Germany and place them on the market here for the first time (importers).

“Importer” refers to companies which in principle bear the legal responsibility of the goods when they cross the border, these can be:

• companies based abroad that send goods to Germany, or 
• companies based in Germany which have arranged for deliveries to be made, or also 
• mail-order companies that fill a shipping package with goods and place them on the market in Germany for the first time (mail-order companies or e-commerce sellers).

Introduction to the German Packaging Act

The Packaging Act outlines the legal framework for the management of packaging waste and sets ambitious recycling targets. Manufacturers, producers and distributors who place packaged goods on the market are required to license this packaging with take-back systems. In Germany, these systems are called “dual systems”. Take-back systems organise the proper collection, sorting and recycling of used and disposed packaging. 

The Packaging Act stipulates ambitious recycling quotas that businesses must achieve for different types of packaging materials, including paper, glass, plastics, and metals. These quotas ensure that a significant portion of packaging waste is recycled, reducing the burden on landfills. 

The law encourages businesses to adopt eco-friendly packaging designs that are easy to recycle and environmentally sustainable. This can include using materials that are biodegradable, reusable, or made from recycled content.

Compliance with these obligations is strictly monitored and heavy fees can be imposed for violations. It is therefore important to be well informed about the individual situation and own obligations.

Registration at LUCID Packaging Register (Stiftung Zentrale Stelle Verpackungsregister – ZSVR)

Packaging licensing starts with registration at LUCID. This is the packaging register of the “Stiftung Zentrale Stelle Verpackungsregister – ZSVR”. The “Stiftung Zentrale Stelle Verpackungsregister – ZSVR” is the supervisory authority for packaging licensing. It checks whether companies act compliant with their legal obligations. Companies must submit three different kinds of quantity declarations to LUCID per licence year stating the quantity and type of packaging put into circulation:

1. an estimate report for the upcoming licence year
2. during the year, the normal quantity report (which can, however, be corrected at any time)
3. at the end of the year, a year-end declaration with the actual quantities of packaging placed on the market

Some companies that exceed a quantity cap (de minimis limit) are also obliged to submit a so-called declaration of completeness. This information is then compared with the reporting data from the dual systems. In this way, the “Stiftung Zentrale Stelle Verpackungsregister – ZSVR” ensures that all packaging is correctly licensed. 

Things to know about reports, quantities and fees

Companies need to determine exactly how much packaging is used per year and to which of the following fractions they are assigned. This could be Glass, Paper, paperboard and cardboard, Ferrous metals, Aluminium, Beverage carton packaging, Other composite packaging, Plastics, Other materials. It is important to record this information accurately because the costs of licensing are based on the amount and type of packaging. 

In this context, it is important to mention that companies must comply with any reporting obligations they may have with both LUCID and their dual system (if they place packaging subject to licensing on the market). The reporting intervals and deadlines for the dual systems may differ from those for LUCID. The submission of the licence notification is an important step. Reporting deadlines are strictly regulated, and penalties may apply for non-compliance.

Calculation of licensing fees

To finance the collection and recycling of packaging waste, companies are obligated to pay participation fees based on the type and volume of packaging they use. These fees contribute to funding recycling infrastructure and collection programs and are based on various factors. Plastic packaging is generally more expensive to licence than paper packaging. In addition, there are differences depending on the type of packaging, e.g., whether it is sales packaging or transport packaging.

Sales packaging means the typical product packaging as well as dispatch (or shipping) packaging, that usually accumulates at end consumers and is also disposed of by them. In contrast, transport packaging belongs to commercial packaging and typically remains in the trade. According to the Packaging Act, there are also collection points for the disposal of packaging that are comparable with the end consumer.  Sales packaging is subject to licensing.

Sometimes smaller companies take “used packaging” from other companies to ship their own products to their customers. A lot of people think that this “used packaging” is not subject to licensing, because the first distributor has either already licensed it or it counts to the so-called transport packaging which is not subject to licensing. But this is not correct! As soon as transport packaging is converted into sales packaging and accumulates at the private end consumer, it must be licensed!

It must be licensed from the first item, so there is no small quantity regulation in Germany. The exact rates for the different materials and weight classes can be obtained from the dual systems. Licence fees are only valid for one calendar year. This means that every calendar year, companies must look at the packaging placed on the market and ensure that it is correctly licensed.

Sanctions for non-compliance with obligations
If companies fail to meet their packaging licensing obligations in Germany, they can expect significant sanctions. These can include penalties of up to 200,000 euros.In addition, a distribution ban is pending here. So, it is of great importance to follow the regulations closely.

Benefits and future outlook

The packaging licensing system in Germany has yielded several notable benefits. It has led to increased recycling rates, reduced landfill waste, and promoted innovation in sustainable packaging solutions. As consumers and businesses continue to prioritise environmental considerations, the packaging licensing framework is expected to further evolve, with stricter regulations, higher recycling targets, and greater emphasis on circular economy principles. 

In conclusion, packaging licensing in Germany is a cornerstone of the country’s commitment to environmental sustainability. By holding companies accountable for the life cycle of their packaging materials, positive developments in waste management can be driven and environmentally friendly packaging practices promoted. This trend can also be observed in the international environment: In many European markets, the principle of Extended Producer Responsibility already applies (or is at least in preparation) and European directives such as the Packaging and Packaging Waste Regulation (PPWR) are increasingly ensuring that sustainability for packaging is taken to the next level.