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Consumer Trends 2023: It is not easy being green

16 January 2023

How doing the right thing has become increasingly challenging. What is next for green claims, and regulation in 2023. What are the implications of the implementation of DRS or the EU's Corporate Sustainability Reporting Directive and what changes will the new packaging legislation bring?

As political momentum and public comprehension of the impact of climate change continues to increase pressure on consumer businesses, sustainability and green credentials are no longer a "nice to have" but a vital requirement for survival on a corporate and global scale. This is coupled with a fast growing, increasingly onerous, and ever changing regulatory regime; a trend set to continue through 2023 and beyond. This is demonstrated by the fact that the world famous CES Conference now has a sustainability area filled with exhibitors that are committed to making our lives, and world, more sustainable.

There is a rise in regulation of this topic at all levels, from a vast amount of EU legislation planned around packaging, waste and the circular economy - to differing rules on recycling, to what products may be used, and fiscal measures driving change at a state level. In particular, the differing approaches across the EU at Member State level make compliance more challenging. France's Triman Logo, the right to repair, or more recently a ban on single use tableware and other items in takeaways and other restaurants with up to 20 seats are just a few examples of what business must navigate in that market, also Ireland's "latte levy" is another. While there may be a core purpose and intent, there remains considerable fragmentation with greater and greater expectation to report on activity in this area, whether to obtain finance or as part of a legal requirement.

A focus on the UK & EU markets

In the UK, the Competition Markets Authority's market assessment of green claims heralded by its 2021 "Green Claims Code" and the Advertising Standards Authority's environmental claims project are set to keep up the pressure on advertisers well into 2023 and beyond (read our 'No 'safe space' for green claims article). Meanwhile the EU is punching up its unfair commercial practices legislation to deal with "greenwashing" and ambiguous environmental claims. It has always been risky to approach an adverts claim first rather than evidence first, but if ever there was a time to break that habit it is now.

Now is also the time to work cross functionally like never before, as from 2025 new EU corporate sustainability reporting requirements will start to come into force. Companies will have to report on how their business model affects their sustainability, and on how external sustainability factors (such as climate change or human rights issues) influence their activities in line with harmonised sustainability reporting standards. Although these requirements will only apply to the EU, the information provided will be publically available and is similar to information demanded to obtain finance and to other reporting schemes.

EU new packaging legislation

At a regional level, the EU's new packaging legislation highlights the challenges the industry face, its recitals note that since the early 90s Directive, volumes of packaging have actually still increased with a "decline in reuse and refill of packaging amplified by increased on-the-go consumption and eCommerce".

Announced in November 2022 and currently going through the EU Parliamentary process, the proposed Regulation 2022/0396 on packaging and packaging waste, amending Regulation (EU) 2019/1020 and Directive (EU) 2019/904, and repealing Directive 94/62/EC sets out a wide reaching and unambiguous (when it comes to targets at least) regime for packaging in the EU. It is easy to think that this will not impact the UK, but anyone who has struggled with a tethered plastic bottle top in the last few months knows that Brexit notwithstanding, the outputs of EU regulatory requirements can still occur in Great Britain.

Proposed Regulation 2022/0396 would apply to all packaging, regardless of the material used, and to all packaging waste, whether such waste is used in or originates from industry, other manufacturing, retail or distribution, offices, services or households - and essentially creates a regime where packaging in the EU is a regulated product. It creates obligations on economic operators throughout the supply chain, not just for manufacturers, but also importers and distributors. It seeks to update the EU legislative framework for packaging and packaging waste and in line with the new approach to products announced in the European Green Deal and the circular economy action plan, the proposal covers the entire life cycle of packaging.

Elements of the proposals such as the requirements for economic operators to retain documentation for ten years, including the identity of the economic operator's one step forward and behind them, for the manufacturer to draw up an EU declaration of conformity to provide information on the conformity of packaging with the Regulation, and recording obligations, are a familiar read. However, it stops short of including the CE Marking within the packaging regulatory regime, on the basis that using the CE Marking to show compliance with the Packaging Regulation would cause confusion, with the use of the CE Marking's to show the actual product is in conformity with its own specific regime.

The Commission's acknowledged overarching objectives for the Regulation are to reduce the negative environmental impacts of packaging and packaging waste, while improving the functioning of the internal market. Specifically: (i) to reduce the generation of packaging waste; (ii) to promote a circular economy for packaging in a cost-effective manner; and (iii) to promote the use of recycled content in packaging.

The intention is that all packaging in the EU is reusable or recyclable by 2030. The proposal requires each Member State to progressively reduce the packaging waste generated per capita compared to the packaging waste generated per capita in 2018, by 5% by 2030, 10% by 2035 and 15% by 2040. Given that there has been an increase in the use of packaging, and design characteristics which potentially inhibit recycling, in recent years, these are more significant targets than they might initially appear.

A 5% reduction by 2030 is by Commission calculations, is a 19% reduction in absolute terms. The Regulation covers a broad range of topics including: minimum levels of recycled content in packaging; targets for reuse and refill; obligation to minimise packaging used; mandatory deposit return schemes; reduction of plastic carrier bag use; minimum percentage recycling targets and compostable packaging.

 

Minimum levels of recycled content
  • plastic packaging should contain certain minimum amounts of recycled content recovered from post-consumer plastic waste, per unit of plastic packaging
  • e.g. 30% for single use plastic beverage bottles by 1 January 2030, 65% by 1 January 2040
Targets for reuse and refill
  • sets out an 8 point definition of "reusable" products
  • 90% of specified large household appliances must made available in reusable transport packaging within a system for reuse from 1 January 2030
  • by 1 January 2030, 20% of cold or hot beverages filled into a container at the point of sale for take-away must be available in reusable packaging within a system for reuse or by enabling refill, (80% by 1 January 2040)
Packaging minimisation obligations
  • particular attention to be paid to limiting the empty space, grouped and transport packaging, including e-commerce packaging
  • must be designed so as to minimise its volume and weight, while maintaining its ability to perform the packaging functions
  • products supplied to a final distributor or an end user in grouped packaging, transport packaging or e-commerce packaging cannot have an empty space ratio above 40% (space filled by filling materials (e.g. air cushions, bubble wrap etc.) will count as "empty space")
Deposit return schemes (DRS)
  • obligatory for single use plastic beverage bottles and metal beverage containers of up to 3 litres by 1 January 2029
  • optional to include other packaging such as single use glass bottles
  • Member States are not to make deposit return schemes obligatory for wine, aromatised wine products, spirit drinks and milk and milk product packaging
Reduction of plastic carrier bag use
  • Member States must apply measures to achieve a sustained reduction in the consumption of lightweight plastic carrier bags on their territory
  • this is measured as "achieved" if the annual consumption does not exceed 40 lightweight plastic carrier bags (with a wall thickness below 50 microns) per person, or the equivalent target in weight, by 31 December 2025
Minimum percentage recycling targets
  • by 31 December 2025 Member States must attain minimum percentage recycling targets by weight across their territory
  • (i) 50% of plastic; (ii) 25% of wood; (iii) 70% of ferrous metals; (iv) 50% of aluminium; (v) 70% of glass; and (vi) 75% of paper and cardboard
Harmonised labelling
  • harmonised symbols will be introduced and required to be placed both on packaging and on waste receptacles, so that consumers can match them up
  • this will include information regarding composting properties

Those with a practical eye will note that labelling requirements can require more packaging, but the Regulation will allow information regarding reuse to be available via QR Codes. 

Compostable packaging
  • defines conditions for packaging to be considered compostable
  • filter coffee pods, sticky labels attached to fruit and vegetables, and very lightweight plastic carrier bags should be compostable within 2 years of the Regulation coming into force

As always there are exemptions. Immediate packaging for medicines, in vitro diagnostic medical devices ("IVDDs") are exempt from the recyclability requirements until 1 January 2035 and more broadly, exemptions for those who place less than a certain volume of packaging on the market will be applied.

Deposit Return Schemes

Coming back to the UK, anyone who has been following will know that the complexity of modern supply chains means the practicality of implementing a system to improve recycling for just one category of product is deceptively complicated, a problem that the recent scheme in Romania also faces. Countries such as Sweden have had automatic return systems in place for decades, but the way in which the Scottish system is designed, raises more questions than answers. If they remain unanswered this is not good news with the English and Welsh systems expected to follow shortly after, and the legal duty in the packaging regulation to implement DRS pan-EU by 2029, but again only optionally for glass – potentially due to widespread glass recycling across the EU.

Suppliers have described the plans to exclude glass from England and Northern Ireland DRS, but include within the DRS in Scotland and Wales, as challenging. The challenge arises from several perspectives, not least that there are concerns there could be three different DRS schemes across the UK - meaning wholesalers and producers will have to make, store and distribute different versions of many products, and have to determine in border towns if the goods are able to get a deposit or not. Further, it creates an environmental distinction between glass bottles and recycled plastics, where in many cases the energy required to produce, transport and reuse glass bottles may actually be greater. This divergence within the UK will potentially be a harbinger of what is to come within the EU, if some Member States choose to include glass in their schemes and some do not, as it is not legally required.

The 'go live' date for the Scottish DRS is 16 August 2023, hopefully neighbours in the EU will be reviewing it for lessons learned. Read more in our Scottish DRS article including our overview document.

Looking forward

Sustainability is a generational issue, action both voluntarily and via regulation will continue. ESG will continue to be critical during 2023 and this level of regulatory change is only the beginning of what will likely be a generation of change. Businesses, consumers and regulators alike will be running just to stand to still for the foreseeable future.

Authors: Dominic Watkins, Katharine Mason and Anne Marie Taylor.

If you have any questions or would like to discuss any of these topics and what they mean for you and your business, please get in touch with one of our regulatory experts. 

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