In November 2022, the European Commission proposed a new legislation called the Packaging and Packaging Waste Regulation (PPWR). The PPWR’s rules apply to all packaging placed on the EU market – including transport packaging such as wooden pallets.
Outline of the Orginal PPWR for the proposal
The goal of the Packaging and Packaging Waste Regulation is to reduce packaging waste through recycling and reuse. The EU plans to achieve this goal by making it mandatory for all packaging placed in the EU market to be fully recyclable by 2030.
The PPWR defines packaging waste by composition. This includes: Glass, Paper and Cardboard, Metals, Wood, and Plastic. Within these categories, the PPWR defines sub-categories such as: Large household appliances, Wine, Take-away ready-prepared food packaging, and Transport packaging. Pallets, plastic crates, and foldable plastic boxes are included within the Transport packaging sub-category. Each category and sub-category has target dates for when the packaging must adhere to the PPWR standards.
The original text of PPWR sets reuse targets for transport packaging, stating that 30% of transport packaging placed on the EU market must be in a reuse system by 2030 and 90% must be in a reuse system by 2040 (Article 26.7).
Implications of the original PPWR for the pallet industry
While Kamps (and the wider pallet industry) is in full support of ambitious environmental initiatives, the original PPWR overlooked some of the challenges that would make reaching the target goals set forth near impossible and place a strain on the industry and our stakeholders.
For example, tracking each pallet that enters and exits the EU market to ensure it can fulfill the required minimum number of rotations is a difficult and costly task. There is also a significant amount of product variability in the wooden pallet industry. Pallets are custom-designed to achieve a specific purpose and can vary drastically based on the industry and unit-load specifications. In some cases, these pallets may be readily reusable. Still, in others, these specialized pallets are not and must be repurposed into different-sized pallets or transformed into particle board, animal bedding, mulch, or pellet fuel. Remanufacturing and repurposing pallets into other wood products extends the life cycle of the pallet, replaces virgin material, and has a beneficial impact from a carbon perspective.
Another overlooked factor was the simple case that wooden pallets do not contribute to the landfill problems facing the EU. Wooden pallets have a net-positive impact on the environment, as evidenced by various studies and research documents published over the past decade.
In summary, the PPWR as it stands would add a logistical and monetary strain on the industry (and its stakeholders) in hopes of solving problems it does not contribute to.
What the pallet industry is doing about the PPWR
Since June 2023, The National Wooden Pallets and Container Association (NWPCA) has engaged the key decision makers for the PPWR (including the EU trade associations) and urged that wooden pallets manufactured outside the EU and used to convey goods into the EU should be excluded from the reuse requirement in Article 26 of PPWR.
NWPCA strategically advocated for exemptions to some aspects of PPWR using the arguments mentioned in the previous section as well as outlining the overall potential supply chain disruptions the PPWR would cause if implemented in its original form.
As a result, the NWPCA was able to negotiate an amendment to Article 26 that was adopted in the Parliment’s final position in November 2023. The amendment added a phrase that stated the resolution requirements were only applicable to companies and pallets circulating “within the territory of the Union”. In line with NWPCA’s position, the Parliament included other key exemptions in their final text, including reuse target exemptions for packaging formats with a high recycling rate (>85%).
This amendment means that the wooden pallet companies (and their customers) can continue shipping pallets to the EU without unnecessary hurdles.
As we head into 2024, the first semester of the new year should be on the pallet industry’s radar in regards to the PPWR.
Next week, interinstitutional negotiations (“trilogue”) surrounding the PPWR will start. The first technical meeting between the European Commission, the European Parliament, and the Council of the EU is taking place on January 10. Trilogue negotiations are important because while NWPCA’s favorable amendment to Article 26 was incorporated in the Parliament’s final report, the Council of the EU did not add the position surrounding wooden pallets to its general approach. The Council of the EU represents the executive governments of the EU’s member states. For the amendment to officially pass, it must be agreed upon by both the European Parliament and the Council of the EU. Therefore, it is critical that in the coming weeks NWPCA continues to engage with Member States to advocate that the Council also adopts the “within the territory of the Union” wording in its final position. The European Commission will play the role of “honest broker” and will have to support our case (or at least not weaken or oppose it).
The beginning of March is when both of the institutions hope to reach an agreement. There is also potential for the institutions to reach an agreement sometime in February, if negotiations are swift and prudent.
In June, the EU will hold the European Parliament elections. Many anticipate that the pressure of the upcoming elections will motivate the Parliament to reach an agreement by March and ahead of the June elections.
Timeline Covering the Series of Events
As one of the leading pallet recyclers in the United States and a 25+ year member of the NWPCA, Kamps lends its full support to the NWPCA throughout the negotiations of the PPWR. As a pallet recycler, we are aware first-hand of the environmental benefits as well as the logistical requirements in successfully managing inbound and outbound used pallets. Additional requirements, as proposed by the PPWR, within this process could lead to logistical challenges, supply chain disruptions, and negative environmental impact.
Additionally, we are thankful for the NWPCA’s swift and decisive action in confronting the PPWR.
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