As every brand owner who sells in, or plans to expand to, more than just a few countries quickly learns, regulatory complexities affect all aspects of their business. And packaging is no exception.
The number of environmental requirements for packaging continues to expand, as do their variety, making it increasingly challenging for brand owners to sell a product with the same packaging design worldwide. While a company may hope for one action it can perform to be compliant everywhere, standard data points it can collect, and a universal form for reporting to all packaging waste recovery organizations (WROs), it’s not that simple.
Rather, there are big differences in the rules and requirements brand owners must understand when selling in a large number of jurisdictions worldwide, some of the most critical of which are summarized below.
Extended Producer Responsibility (EPR) reporting
Global brand owners have to comply with Extended Producer Responsibility (EPR) legislation in most parts of the world. While countries such as those within the European Union (EU) have had an established system for EPR compliance for a while, EPR programs continue to expand and are now present in at least a few countries on each continent.
The programs require producers to report on the packaging they place on the market, as well as finance the end-of-life processes for the packaging waste they produce, to ensure environmentally sound disposal. But while the intent of the programs is the same, countries define a number of concepts differently and have different rules for reporting, such as:
The Producer: The entity that is obligated to report and pay the fees depends on the definition of “producer” in the local market. In the EU countries, the producer is usually the entity that first owns the merchandise in the countries, while in countries such as Canada, the responsibility is more brand owner-oriented. In other countries, such as the U.K., the fee payment is split based on “shared responsibility” between participants in the packaging chain. In this situation, rather than one producer being responsible for the recycling and recovery of a piece of packaging, any company that performs any of the obligated activities (raw material manufacturing, conversion, packing/filling, selling or importing) is responsible for a proportion of the obligation.
Covered Packaging: Countries or local packaging WROs (which brand owners often have financial incentives to join instead of self-complying) have different rules about the type of packaging that needs to be reported. For instance, in France, transport packaging that stays with the distributor or retailer is exempt, while in many other countries all levels of packaging must be included.
Also, in some countries, only packaging for a product whose final destination is a household is subject to fees while others include packaging intended for businesses. In addition, some WROs in Canada and the EU cover printed paper, such as instruction manuals, brochures and flyers, while other WROs exclude these materials from reporting. Some WROs do not accept certain packaging types, such as pharmaceutical packaging, and countries such as Spain or Portugal require it to be reported to special organizations. And countries such as Japan also account for the type of product sold to determine packaging obligation.
Reporting Format: Variations are also common in the required reporting formats. Based on criteria such as annual returns or amount of packaging placed on the market, a brand owner may have to report to a certain WRO either monthly, quarterly or annually. And they may have to use a regular reporting template or be allowed to complete a “simplified” template.
Reporting Thresholds: In some jurisdictions like the U.K., Hungary and Sweden, obligated producers that place smaller quantities on the market or have lower annual revenues, have limited, or even no reporting obligations. In other countries, such thresholds do not exist.
Material Categories: Different countries define various materials differently, as well as the categories where they should be reported. For example, the material threshold level, meaning the percentage of the total component weight that a material must comprise in order for it to be classified as that material, is not a consistent among WROs. That means, in order to report the quantity of a material like paper packaging placed on one market versus another, a producer may need to follow different calculation rules in each country.
Penalties and Rewards: Other variations between WROs impact the amount of packaging fees a producer must pay. In recent years, WROs have started to either offer incentives for positive environmental changes (such as adding recycled content), or penalize types of packaging that may disrupt the established recycling streams. For example, France has much higher fees for disruptor materials and Ontario collects data on such packages.
To manage such variations like these, brand owners need to carefully consider a comprehensive data collection and management system, as well as detailed tracking of regulatory requirements worldwide.
Packaging design requirements and material bans
Many differences also exist in environmental packaging design requirements and material restrictions (or bans) worldwide. For example, while Essential Requirements for packaging in Europe include an array of rules regarding source reduction, recovery, reuse, and minimization of hazardous substances, global brand owners must be aware of specific requirements in other regions where they also sell.
For example, some countries have specific empty space and layer limitations for certain types of packaging (such as Taiwan and South Korea), while others entirely ban, or restrict, certain materials in some, or all, types of packaging, such as PVC restrictions in South Korea and EPS bans in the U.S.
One way for brand owners to avoid the risk of non-compliance is to abide by the strictest design requirements for packaging that is sold worldwide. Sometimes, however, that may not be the best approach. If a certain requirement is so narrow, it may not be feasible or efficient to apply it to all packaging sold worldwide. One such example is the ban reportedly imposed by the Ministry of Environment in the United Arab Emirates on the use of fossil-fuel derived plastic packaging, with the exception of oxo-biodegradable plastics.
Environmental labeling and claims for packaging
Just like material restrictions and design requirements, rules regarding environmental labeling and claims vary greatly among countries and regions. While a detailed description of such differences is not possible here, brand owners should be aware that significant differences may exist, including:
-- Environmental labeling or EPR financing symbols are voluntary in some jurisdictions and mandatory in others (such as the use of the Green Dot as a financing symbol).
-- The significance of certain environmental symbols is not considered the same across environmental claims guidance (such as the use of the Möbius Loop, the three-chasing arrows symbol).
-- Some countries may require symbols or coding similar to that used in one region for certain packaging and those similar to a different region for other types of packaging. For example, in Croatia, the mandatory material coding is similar to the EU material coding for all materials except for plastics, where coding consistent with the U.S. SPI resin identification is required.
Brand owners need to pay close attention to all the different requirements when deciding whether “worldwide” environmental labeling is a feasible and effective option for their specific case. Depending upon the types of products sold (food, cosmetics, pharmaceuticals and more), the packaging materials used and the types of packaging components most frequently placed on the market (such as mostly plastic bottles vs mostly fiber-based packaging), and the environmental message the company is interested in sending to its customers, a company can decide whether to create region-specific labeling and/or environmental claims, or a worldwide labeling system.
No single solution to multiple requirements
These are just a few of the complexities global brand owners face as they prepare packaging for products intended for distribution in various countries. And while there is no simple way to ensure compliance with all rules and regulations, close monitoring of legislative changes and proper understanding of how they impact your organization is critical since non-compliance penalties and mandatory design revisions can be costly.
Gabriela Dobrot is a project manager at Environmental Packaging Intl. (EPI), a consultancy specializing in global environmental packaging and product stewardship requirements. Contact her at 401-423-2225 or [email protected].