Packaging Licensing
With the entry into force of the German Packaging Act (VerpackG) on 1 January 2019, packaging licensing is now mandatory for both manufacturers and retailers who place sales packaging on the market. A packaging licence must always be applied for if the retailer or manufacturer acts as an ‘initial distributor’.
Effectively, this means a manufacturer who initially fills sales packaging with goods must use cartons licensed beforehand with a dual system or other kinds of packaging that are also licensed. The dual systems then, in turn, handle the professional collection, sorting and recycling of the packaging placed on the market.
Manufacturers and retailers comply with their obligations from the Packaging Act by licensing their packaging with a dual system, paying the licence fee that is charged for this licensing procedure and then also registering with the Central Agency Packaging Register. The amount charged as the licence fee depends primarily on the volume of packaging placed on the market, whose recycling or recovery following disposal is handled once again by the dual system.
What does ‘packaging licensing’ actually involve?
Packaging licensing is a legal requirement. While already a part of the German Packaging Ordinance enacted in 1991, the relevant legal provisions were substantially amended and tightened by the introduction of the new German Packaging Act (VerpackG).
A fundamentally new concept here is the establishment of a national monitoring body – the Central Agency Packaging Register – that facilitates transparent comparisons of the data submitted for packaging licensing between the dual systems and the individual companies. This system requires companies to register, and all retailers or manufacturers that are the ‘initial distributors’ of sales packaging and who market this packaging to private end users must register, regardless of their size.
Packaging licensing is handled by one of the accredited dual systems in Germany. These dual systems ensure that packaging is professionally collected, sorted and recycled after disposal by end users – such as via the ‘yellow bin’ or ‘yellow bag’ systems, or by recycling bins for paper or glass. The mandatory licensing of sales packaging therefore aims to facilitate effective take-back and recycling/recovery work on the part of the dual systems, and to secure the highest possible rates of recycling for packaging materials placed on the market.
How does a company become "licensed"?
Manufacturers or retailers obtain a licence by signing an agreement about the packaging volumes and materials involved with a dual system operator – such as Interzero Recycling Alliance. Packaging licensing can be completed easily by using online portals like www.lizenzero.de. The steps to complete to ensure compliance with the Packaging Act are as follows:
1. Identification of a suitable dual system.
2. Conclusion of an agreement with the respective operator (online, for example).
3. Calculation of the total weight of packaging (per material) produced per annum.
The final fee charged for the packaging licence (‘licence fee’) will depend on the total weight of packaging as well as the dual system involved. The next steps in the packaging licensing procedure are then as follows:
4. Registration with the Central Agency Packaging Register via the LUCID register database: https://lucid.verpackungsregister.org/. This involves creating an account by stating your company’s name and legal form, your contact person, the name of your dual system and the volumes reported to it, etc.
5. Activation of this account via the link sent and completion of registration. After being accepted into the public register database (LUCID), the manufacturer or retailer receives a registration number. Changes of any kind must be communicated without delay. Packaging licensing applies to all companies in the same way, insofar as they are the initial distributors of sales packaging that is intended for the private end user market. The last step again involves the dual system:
6. Informing the dual system of the registration number issued by the Central Agency.
At the beginning of each succeeding year, the volume originally reported must be rechecked, and the final volume must be reported to both the Central Agency and the dual system by means of the year-end volume report.
Legal basis
The legal basis for packaging licensing in Germany has existed since 1991, when the German Packaging Ordinance entered into force. This Ordinance was augmented by the Circular Economy Act (KrWG) and was oriented on all those companies that place sales packaging or ‘secondary packaging’ on the market.
The concept of the ‘private end user’ was also already defined: as the entity that ultimately disposes of the packaging placed on the market. The Packaging Ordinance was amended several times until 2017 and was recently replaced by the new Packaging Act (VerpackG), which entered into force on 1 January 2019. For end users, the new Act changes nothing. As before, the collection, sorting and recycling of packaging waste continues to be handled by a dual system provider.
In other areas, the Act introduces some key changes:
- Setup of the Central Agency Packaging Register (ZSVR) as a compliance monitoring body for the Act
- Mandatory registration with the ZSVR (Section 9, VerpackG); registration cannot be delegated to a third party
- Mandatory reporting/updating of data records (Section 10, VerpackG); these duties cannot be delegated to a third party
- Stepwise increase of take-back targets (in two phases from 2019 and 2022)
For whom is packaging licensing mandatory?
Mandatory packaging licensing is stipulated by the new VerpackG for those producers or companies who first fill sales packaging with goods and place this packaging on the market. Typically, this does not usually apply to packaging manufacturers but to retailers, who receive the packaging material and use it to protect, transport or otherwise distribute their goods. One example is a retailer who places some goods they have received into a shipping carton for transportation to the end user. In this case, the retailer is responsible for the packaging licensing of this carton, including filling materials and packaging aids.
In the same way as retailers, product manufacturers are also affected if they fill their goods into product packaging and/or secondary packaging, and then ship the goods in this packaged format to their resellers or retail outlets – such as shops. Apart from mail-order packaging, product packaging and secondary packaging, the Packaging Act also stipulates licensing for the service packaging handed out to the end consumer after a sale as means of transporting the goods sold (typical examples include baker’s paper bags, pizza boxes or coffee-to-go cups).
The Packaging Act includes separate provisions for ‘transport packaging’, which is defined as packaging that is used to transport goods to another retailer or manufacturer and which is a source of waste generated by the retail trade. While participation in the system is not mandatory for transport packaging as it is for sales packaging, transport packaging is still subject to provisions requiring its professional take-back and efficient recycling.
Mandatory packaging licensing is stipulated by the new VerpackG for those producers or companies who first fill sales packaging with goods and place this packaging on the market. Typically, this does not usually apply to packaging manufacturers but to retailers, who receive the packaging material and use it to protect, transport or otherwise distribute their goods. One example is a retailer who places some goods they have received into a shipping carton for transportation to the end user. In this case, the retailer is responsible for the packaging licensing of this carton, including filling materials and packaging aids.
In the same way as retailers, product manufacturers are also affected if they fill their goods into product packaging and/or secondary packaging, and then ship the goods in this packaged format to their resellers or retail outlets – such as shops. Apart from mail-order packaging, product packaging and secondary packaging, the Packaging Act also stipulates licensing for the service packaging handed out to the end consumer after a sale as means of transporting the goods sold (typical examples include baker’s paper bags, pizza boxes or coffee-to-go cups).
The Packaging Act includes separate provisions for ‘transport packaging’, which is defined as packaging that is used to transport goods to another retailer or manufacturer and which is a source of waste generated by the retail trade. While participation in the system is not mandatory for transport packaging as it is for sales packaging, transport packaging is still subject to provisions requiring its professional take-back and efficient recycling.
Objective of take-back and recycling
The aim of increasing and collection the recycling of packaging materials and achieving higher rates of recycling for packaging waste is not new and was a declared objective of the original Packaging Ordinance. In these respects, however, the bar is set significantly higher by the new Packaging Act. Packaging licensing is now registered with the Central Agency Packaging Register (ZSVR) and is generally accessible to everyone via the LUCID register database. For any manufacturer or retailer, it is now possible to assess whether this entity is properly registered or has no database entry and is possibly working with unlicensed packaging.
In this context, it is also possible to report the failure to complete packaging licensing as a regulatory infringement and/or take legal action to secure a written warning. Since the register is public-access, competitors may also peruse its contents. Companies that fail to comply with the letter of the law may be fined up to EUR 200,000 or even face sales bans for their products. Where packaging waste exceeds certain limits, companies must also submit a Declaration of Completeness (the relevant limits are: 80,000 kg for glass, 50,000 kg for paper/paperboard/cardboard, and 30,000 kg for plastics, metals and composites (in total)).
What are the ‘dual systems’?
For sales packaging, licensing in the sense of packaging licensing is handled exclusively by organisations accredited as ‘dual systems’.
As of this writing, these are nine official providers, all based in Germany, who meet the requirements of Section 18 of the VerpackG and may therefore offer their services as licensing partners. One of these is the dual system Interzero Recycling Alliance, with its ‘Lizenzero’ online shop for packaging licensing. Packaging licensing is sometimes referred to as ‘system licensing’ – since this licensing always depends on participation in one of Germany’s dual systems.
For sales packaging, licensing in the sense of packaging licensing is handled exclusively by organisations accredited as ‘dual systems’.
As of this writing, these are nine official providers, all based in Germany, who meet the requirements of Section 18 of the VerpackG and may therefore offer their services as licensing partners. One of these is the Interseroh dual system, with its ‘Lizenzero’ online shop for packaging licensing. Packaging licensing is sometimes referred to as ‘system licensing’ – since this licensing always depends on participation in one of Germany’s dual systems.
