What can happen if my company does not comply with the EPR?

As part of extended producer responsibility (EPR), companies that place packaging or certain products on the market must fulfil many obligations. In concrete terms, this means that they are responsible to the legislator for the products or packaging placed on the market and must themselves ensure that they fulfil all applicable obligations by the law. This can be, for example:

• the appointment of a legally authorized representative,
• labelling regulations,
• participation in take-back systems to finance the recycling of recyclable materials and waste management infrastructures,
• the fulfilment of recycling standards, or even
• minimum quotas for the use of recyclates (recycled raw materials) in packaging.

If all obligations are fulfilled correctly, the company is said to be “EPR-compliant”.

Many countries, many regulations – and for many industries and products!

Depending on the country in which the company operates, these obligations may be regulated differently. It is therefore advisable to either familiarise yourself intensively with country-specific regulations or to hire experts for circular economy consulting who are familiar with the subject matter and regularly monitor the regulations and any developments.

In addition to packaging, there are usually producer obligations for many other products or materials, although these categories can differ from country to country. Here is an exemplary list for better illustration:

1. Electronics and electrical appliances (computers, mobile phones, household appliances, consumer electronics and other electronic products)
2. Packaging (packaging materials such as plastic, glass, metal, paper and cardboard)
3. Batteries and rechargeable batteries
4. Vehicles and transport
5. Chemical industry
6. Medical products and pharmaceuticals
7. Construction and building materials industry (products such as paints, varnishes, insulating materials, and other building materials)
8. Processing industry (products that could be harmful to the environment at the end of their life if they are not disposed of properly)

Why is it important for companies to be EPR-compliant?

Failure to fulfil the legal requirements can result in severe sanctions. In Germany, for example, these include penalties of between 10,000 and 200,000 Euros or even a complete sales ban on the German market and an entry in the trade register. However, companies not only suffer economic damage but also have to accept a loss of image and reputation. 

Furthermore, companies that do not comply with all legal obligations can calculate their prices differently as they do not include the costs of EPR. This leads to an unfair competitive advantage (more favourable prices) on the market compared to competitors and rivals and can also be prosecuted under civil law (unfair competition under the Unfair Competition Act). Possible civil sanctions include a warning letter, then an injunction, and finally legal action before the competent court.

Loss of image and reputation

These days, terms like “greenwashing”, “transparency” and “climate change” are on everyone’s lips. Large companies are publishing sustainability targets and their sustainability agenda and showing how future-orientated and climate-friendly they are. However, responsibility for products and their packaging is also part of environmental policy obligations. If companies do not fulfil this responsibility, word gets around and this can sometimes lead to competitive disadvantages because customers feel misled. The good reputation and trust in the company are lost and must first be restored.

In Austria, the Association for Consumer Information (VKI) has already brought several successful lawsuits before the competent regional courts for violations of the European Union’s “Green Claim Directive”. These include a brewery company, an association of dairy farmers and dairies, and an airline. The judgments are legally binding.

Financial implications for the company (penalties, sales bans)

Here are a few selected examples of violations of regulations according to VerpackG, ElektroG, and BattG in Germany and the maximum amount of possible penalties:

Ignorantia legis non excusat – ignorance is no defense against punishment! 

What can I do as a company to be EPR-compliant? The very first task must be to obtain comprehensive and detailed information about all obligations in all markets in which my company operates, get to know more about your obligations by starting our Quick Check and opening a free Circular Pro account. As soon as there is clarity about the necessary obligations, I as a company can gradually start to fulfil these obligations. This is sometimes a huge challenge for most.

If you are looking for a quick and uncomplicated solution for your company to immediately participate your packaging volumes in a take-back system and thus avoid penalties and possible distribution bans, then click here and visit our partner’s online shop “activate by Reclay“. With just a few clicks, you can be EPR-compliant and discharge your packaging properly. The certificate of participation is available for immediate download. 

In our blog section, you will find many useful articles on topics relating to packaging, which can give you an initial orientation on any obligations and regulations. Environmental policy developments are progressing rapidly, and regulations and obligations are becoming ever stricter and, as mentioned at the beginning, are not standardized. As companies rarely have sufficient expertise and resources to recognize these developments at an early stage and counteract them with measures or optimizations, it is advisable to contact teams of experts to act in a legally compliant and EPR-compliant manner.