Situated for the past several years in the spotlight of the European environmental movement, Germany has established itself as the country with the most exhaustive set of environmental packaging regulations in the world. Due to the complex nature of Germany's packaging regulations, a wave of confusion has resulted, particularly as to whether or not specific packaging materials like expanded polystyrene (EPS) are restricted by law. As external audiences are becoming better educated on German packaging regulations, they are learning that German regulations are not material-specific and that EPS is not now, nor has it ever been, banned in Germany or any other country in the world.

With Germany's stringent regulations having come into effect over five years ago, the implementation process has been strenuous at best, paved with several obstacles. Through a learning process, however, Germany has corrected many of its past problems while stabilizing its collection system. Commended by some and scorned by others, Germany offers an interesting case study.

The German Packaging Ordinance -- A Short History

Germany's stringent packaging regulations were "born" with the passage of the German Packaging Ordinance in June 1991. Long advocated by German Environment Minister Dr. Klaus Topfer and consequently referred to as the Topfer Law, the Ordinance is the "umbrella" packaging regulation from which virtually all collection and recycling mandates for packaging stem. The guiding principle of the Ordinance, classified commonly as "industry pays," "polluter pays" or "producer pays," was at first praised by many after Germany adopted it. Certain groups believed it was a good idea to shift the economic responsibility for packaging waste management from government to industry. It was considered by some to be a signal of a new era and much talk centered around the idea of copying the German model in other countries around the world.

Five years later, the German model is not as attractive. It has come under attack because of its many logistical and financial problems. Not one other country has adopted and applied the German model as its own. In fact, the United Kingdom's Environment Secretary recently referred to the German system as too bureaucratic.

So what exactly does this extremely "bureaucratic" Ordinance mandate? First and foremost, it requires manufacturers and distributors of packaging, including mail order companies, to take back used packaging materials and reuse, recycle or dispose of them. Packaging waste must be kept separate from the municipal waste stream. In addition, companies are required to use a label stating the composition of the packaging material and the appropriate return/reuse system on their packages.

Different Requirements for Different Kinds of Packaging

To account for the differences between the various functions a packaging system may perform and at what stage it enters the solid waste stream, the Ordinance divides packaging into three categories and lays out a separate set of specific requirements for each. In no circumstance is a regulation material-specific; each packaging material is considered part of a category. Additionally, no packaging product is exempt from the Ordinance unless it constitutes a health or environmental risk, in which case it is subject to another set of regulations.

The three categories for packaging, as described in the Ordinance, are primary, secondary and transport.

Primary packaging, also known as sales or display packaging, is packaging that is used by the consumer to transport goods or until the goods are consumed. It includes closed or open receptacles and coverings such as cups, bags, cans, tins, bottles, metal containers, cardboard and cartons, carrier bags or similar coverings. Sales packaging includes throw-away dishes and cutlery. Distributors of primary packaging must take it back from the consumer at or near the point of sale.

Secondary packaging, also referred to as outer packaging, includes such materials as blister packaging, plastic sheets, cardboard boxes or similar packaging intended as additional packaging around the sales packaging to: allow goods to be sold on a self-service basis; prevent or deter theft; or serve primarily for advertising purposes. Secondary packaging distributors must remove secondary packaging when the goods are sold, or offer the consumer the opportunity to remove secondary packaging either at the point of sale or elsewhere on the premises of the sales outlet. The distributor must provide suitable receptacles for secondary packaging at the point of sale or elsewhere on the premises.

Transport packaging means drums, containers, crates, sacks, pallets, shrink wrapping, cardboard boxes, foam packaging materials and other coverings are used to protect goods during transport or for transport safety. Manufacturers and distributors must take back transport packaging after use.

The Ordinance requires all manufacturers and distributors of any packaging, regardless of its function or material type, to ensure that the packaging they collect is reused or recycled outside the public waste management system.

Where Does the "Green Dot" Fit Into All of This?

Because the literal act of taking back high volumes of packaging, much of which might be soiled, the Ordinance provided industry with an alternative. Instead of doing it themselves, manufacturers and distributors could hire an outside organization to take the waste back for them. In practice, industry itself does not have to literally retrieve packaging waste; they simply have to make sure it gets done (i.e. pay for it).

Taking advantage of the third-party alternative, several German packaging manufacturers and distributors combined their resources over five years ago to create a nonprofit organization called the Duales System Deutschland (DSD) which would be responsible for collecting packaging waste. DSD developed a system for collection known as the Green Dot program.

Here's how it works:

1) Private companies buy membership into DSD earning themselves the right to participate in the Green Dot program.

2) As members, companies are eligible to pay to display the green dot on their packaging products. Companies must pay each time a green dot is placed on a product. Fees are material-specific and based on weight.

3) Consumers buy the green dot products at a premium--roughly 1 cent per unit for green dot goods--and are supposed to dispose of them in separate waste cans or collection points which, in many cases, are curbside programs.

4) DSD collects and manages green dot waste outside the public waste management system.

Participation in the Green Dot program is completely voluntary. However, virtually all companies that manufacture or distribute primary packaging choose to be a part of it because it is the most cost-effective option for them. Additionally, there is pressure for the manufacturers and distributors of primary packaging to be a part of the program since many German retailers have shown clear preference for stocking goods bearing the green dot. In contrast, manufacturers of secondary and transport packaging usually find there are other, more cost-effective ways than the Green Dot program to take back their packaging.

Individually setting up a customized take back system can sometimes be a better choice. For example, the manufacturers and distributors of expanded polystyrene (EPS) handle the great majority of EPS packaging through their own take back system rather than with the Green Dot Program. Here are a few reasons why.

First, the Green Dot program was designed to collect high-volume packaging waste used by consumers, not to collect low-volume commercial packaging waste like EPS. EPS is most often used in Germany--as it is in America--as cushioning for fragile items such as computer parts during transit. It is virtually never used as "display" or "sales" packaging bought by consumers. Consequently, only 2 to 3% of all EPS packaging is collected through the DSD system. Additionally, EPS packaging makes up a very small percentage of Germany's waste stream. Given that EPS packaging is relatively low volume and is used primarily by businesses, the Green Dot program would not be an effective choice for the EPS manufacturing industry.

Another reason why EPS packaging material is not well-suited for the DSD collection system is that there is a sophisticated EPS collection system with a proven record already in place. When "industry pays" became practice in 1991, the EPS packaging industry had been operating their own successful collection program since 1985. Today more than 40 members strong and known as EPSY, the EPS manufacturing industry trade group commissions waste management companies such as Interseroh and VFW, to collect EPS from the appropriate sources. All collected EPS is then passed on to EPSY members to manage the sorting, recycling and reuse of EPS transport packaging. EPSY members are obliged to accept all clean material.

In addition to the above efforts, the EPS industry has successfully promoted and organized other collection options. A few years ago, the EPS industry began providing direct store collection. Since April 1, 1992, amendments to the packaging law have allowed consumers to remove secondary packaging at the point of purchase where it is later picked up to be recycled or reused. Other sources of collection include public drop off and partnerships with original equipment manufacturers.

Due to the voluntary efforts of the EPS packaging industry in Germany, EPS is recycled at a rate of nearly 90% in Germany, of which 35% is manufactured into new EPS packaging.

Some of Germany's Problems

Although industry has with time shown it is able to operate within the German set of regulations, this should not be considered evidence that the "industry pays" system is without problems. According to Ado Russo and Skvetank Shah, who wrote an article on the Green Dot program for the National Tax Journal:

"The problems faced in Germany provide lessons for other countries. In Germany, consumers offered more material for recycling than could be collected, the system lacked adequate recycling capacity for the collected materials . . . and many of the contributing companies failed to pay their Green Dot fees in full and on time. Success should not be compromised in the interests of speed. Political pressure for quick success can result in a poorly managed system."

More Information

Business professionals wishing to do business in Germany should assume that they will have to pay a levy on their packaging--regardless of its function or material type--in order to support Germany's extensive waste management program. People interested in obtaining more information on German packaging regulations or the Green Dot Program can contact:

Der Bundesminister fur Umwelt, Naturschutz und Reaktorsicherheit (BMU)
(Federal Ministry for the Environment, Nature Conservation and Nuclear Safety)
Kennedyallee 5
5300 Bonn 2
Germany
Tel: 011.49.228.305-3224
Fax: 001.49.228.305-3225

The Dual System (DSD)
Contact:
Petra Rob
Manager, Communications Department
Duales System Deutschland GmbH
Frankfurter Strasse 720-726
51145 Cologne
Germany
Tel: 011.49.22.03.937-260 or 261
Fax: 011.49.22.03.937-191