Volume trends have far-reaching consequences
In recent days and weeks, the development of reported packaging volumes has been the central topic in the german PRO business. We have also repeatedly stated that we cannot understand these developments and are observing them with concern.
The volume trends have far-reaching consequences
In the third quarter of 2024, the reported volumes from the glass, paper and lightweight packaging fractions in Germany remain far below the comparable figures from the previous year. At the same time, collection volumes are increasing. What at first glance sounds like a success for the environment is actually very worrying.
The example of lightweight packaging makes it clear: while the overall market volumes are currently stagnating at a very low level, the collection volumes are increasing. This means that sorting volumes are also increasing. And this increases the costs for german PROs. the “dual systems”.
According to current observations, the main reason for the divergence between the total market volumes involved and the collection volumes is misthrowing. In other words, waste that is incorrectly disposed of in the yellow bin or yellow bag. As a result, an ever-increasing proportion of the sorted quantities has to be incinerated, which is associated with significant costs. Since January 2024, waste that is incinerated has also been classified as fuel and is therefore subject to an additional CO2 tax. Whether the deliberate mixing of commercial waste by some waste disposal companies contributes to this effect in addition to incorrect throwing has yet to be clarified.
The situation on the raw materials market places an additional burden on the systems
In addition to this burden, demand for recycled raw materials remains persistently low. Plastics recyclers were already forecasting a difficult year at the start of 2024. Conversely, the demand for sorted material from the dual systems is also very low.
All of these developments mean that the dual systems in Germany are facing a major challenge and are stuck with unexpectedly high costs and low demand for sorted material.
Similar developments can also be observed internationally
With our group of companies, we are committed to an international circular economy and are also active beyond the borders of Germany. Reclay also operates a collection and recycling system for packaging in Austria. We are also observing similar developments in Austria.
In addition, the system landscape in Austria will have to adapt to the introduction of the deposit system in 2025. The fact that valuable beverage containers from the yellow bin will go into the deposit system is an economic challenge for the systems, but it makes ecological sense. The systems will only come under pressure because, despite the foreseeable reduction in the amount of packaging in the yellow bin, the collection costs will be the same as in 2023. This results in costs for the system that will not be optimised purely for political reasons.
The consequence is an increase in participation fees
Initially, of course, the PROs bear the main burden of the consequences of these developments. However, anyone who thinks one step further quickly realises that this is not the end of the story.
The PROs will have to take these developments into account in their prices. Otherwise their own profitability will be jeopardised. From Reclay’s perspective, we are talking about our PRO services in both Germany and Austria.
Accordingly, there will be non-negligible price increases for the participation of packaging in 2025. The fact that these price increases are also likely to be reflected in the product prices for end consumers is also something we do not want to leave unmentioned at this point.
Fair solutions and cooperation between all parties involved are needed
We see this situation as a major threat to the packaging collection and recycling system in Germany and Austria. Structural incentives to dispose of residual waste via the PRO infrastructure must be better recognised and taken into account in the political debate. This is because misdirected waste – which is nothing less than an offence against environmental law – not only leads to unfair cost shifts, but also works against the objectives of the circular economy, as it worsens the quality of recycling processes.
For this reason, we appeal to all those involved to work towards a fair solution and to take the necessary steps in their own areas of activity to ensure that the system continues to function properly.