New EU packaging law: blessing or curse for sporting goods industry?

No doubt it is a staggering number that, already in the second WHEREAS clause of the wording of the PPWR – as published in the Official Journal on January 22, 2025 (Regulation - EU - 2025/40 - EN - PPWR - EUR-Lex) – it is stated that, based on Eurostat figures for 2020/2021, 40 percent of all plastics used in the European Union and 50 percent of all paper are used for packaging, and that packaging accounts for 26 percent of all municipal solid waste.

Based on my personal experience while traveling abroad, it is strongly assumed that such percentages are much higher in non-European countries, yet this is of course no argument that we in Europe could sit back and do nothing. Nevertheless, the key question in analyzing the main content of the PPWR remains whether the Brussels authorities have not overdone it, thereby creating another bureaucratic monster that once again undermines the competitiveness of European industry and trade, and might also trigger some counterproductive negative effects, in particular for European SMEs.

In contrast, major companies and commercial operators such as leading brands or retail chains may welcome this new piece of legislation, which contains, among others, unified recyclability criteria, harmonized labeling, clearer definitions of “manufacturer” and “producer” and tighter responsibility on the part of producers.

The rationale behind the PPWR

The magic buzzword of this new Regulation is certainly the circular economy. It has its origin in the European Green Deal of December 11, 2019, and in the Circular Economy Action Plan for a cleaner and more competitive Europe of March 11, 2020. Consequently, it is an offspring of the former EU Commission, whose focal policy was centered on environmental topics in the first place, with commercial issues such as competitiveness ranking behind.

It is clearly emphasized in the PPWR that EU legislators view it as an instrument and tool to accelerate the transition to a circular economy. Packaging waste is intended to be substantially reduced while at the same time increasing the recyclability of the packaging materials used, by creating a kind of rulebook for commercial operators within, and also outside, the European Union and the European Economic Area (EEA).

Good faith approach, but…

While the intention and rationale behind the PPWR are basically good, as is quite often the case with EU regulations and directives, this new law might well overwhelm companies in its practical implementation.

It also comes as no surprise that the World Packaging Organization praised this new piece of legislation as “valuable” and “long awaited,” emphasizing that it will create new solutions for packaging, recyclability and new closed-loop recycling structures, combined with a much higher use of mono-materials as well as digital traceability and reporting tools, or, in other words, create new business opportunities for the packaging industry…

Sometimes less is more, or is it?

When reality comes into play, the world may, however, look somewhat different if one takes a closer look at the high demands and expectations of the EU policymakers. The targets set by the PPWR are highly ambitious, and the timelines are quite tight.

To be compliant, the packaging industry will need to develop new, more eco-friendly and recyclable materials and formats, which, under the PPWR, must also be tested and certified for recyclability. In addition, the creation or existence of a digital infrastructure for traceability, plus Extended Producer Responsibility (EPR) and reporting obligations for product and packaging volumes, are additional mandatory elements.

Needless to say, this may well result in much higher costs for the whole supply chain and may even drive smaller commercial operators, in particular online traders, out of business. It also remains to be seen whether, and to what extent, large non-European sellers and platforms will abide by EU law, and how the EU will handle monitoring and surveillance.

It is true that the PPWR applies to all packaging placed on the EU market, which includes imports. Nevertheless, I personally have certain doubts as to whether, for example, Shein and Temu will in reality be compliant in all respects, rather than seeking ways and loopholes to circumvent the high benchmark obligations imposed by the PPWR.

In my view, too often in the past Brussels lawmakers have enacted new regulations and directives accompanied by substantial additional red tape for the private sector, in terms of comprehensive, if not vast, documenting and reporting obligations, without much visible practical use and without the EU Commission and national competent authorities having the capability and resources to adequately monitor the execution and enforcement of such legal instruments.

In this context, it has also been heavily criticized that detailed guidance from the EU Commission was only provided a few months before the PPWR became applicable. Cross-border sales by smaller, specialized e-commerce traders may at least be impeded, if not rendered impossible, which would certainly not be a desirable development from a European economy point of view.

The mandatory obligation alone to appoint a representative in each EU Member State where cross-border transactions take place may, in the near future, prevent such specialized stores from branching out internationally, one of several thinkable negative scenarios. At the very least, it is quite likely that commercial online operators will attempt to increase the prices of their products, which is anything but easy right now, given the current tough economic environment in Europe and the reluctant consumer spending mood.

Investing, for example, within a short time frame in new or upgraded “PPWR-compliant” machinery and equipment poses problems and creates major headaches even for large corporations, not to mention smaller players.

It has also often been mentioned that, despite 183 initial “Whereas” clauses filling nearly 50 pages, followed by 71 articles of the Regulation itself on an additional nearly 90 pages, plus its 13 Annexes, and accompanied by the 58 pages of the Commission’s Guidance Document, published on June 5 of this year (see eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=PI_COM:C(2026)3702), numerous experts in this specific area share the view that a good number of gray areas and uncertainties remain, for example as concerns multi-material packaging use and recyclability performance grades, and that it is not unlikely that national authorities in individual Member States might enforce the PPWR inconsistently.

The EU Regulation also foresees that fiber-based packaging material containing less than 5 percent plastic may avoid certain single-use bans. It has been criticized that this might create a loophole, encouraging material substitution rather than genuine waste reduction.

Conclusions and recommendations

As primarily a corporate lawyer, it is in my opinion highly important to have clear written agreements in place throughout the whole supply chain (including, of course, the suppliers of packaging materials), defining and limiting the respective spheres of responsibility and liability (including, for example, indemnity and hold-harmless terms) from the suppliers of packaging materials to the producers of a product and the manufacturers (brands), up to the EU retail customers, as an important risk-management tool, in order not to be confronted later with highly negative and costly experiences and surprises.

The newly applicable PPWR has been enforceable since last month, and it is certainly not advisable to delay implementing compliance-related risk-management measures and activities, given the rather short timelines this new piece of legislation imposes.

To the extent it is foreseeable right now, the PPWR will not be lifted or amended in the course of the EU Commission’s new Omnibus legislation, but the EU Commission has explicitly stated in its PPWR Guidance Document that this piece of legislation was issued “in the context of the Commission’s environmental only was package and broader simplification efforts,” which means that the Regulation has not been and will not be modified or amended by the Omnibus legislation, though its implementation and interpretation have been influenced by these new EU legislative initiatives. I leave it to the judgment of readers of this article whether this objective has indeed been achieved.