The EU Packaging and Packaging Waste Regulation (PPWR)
Packaging waste has been on the EU’s radar for years, but 2025 marks a turning point. With the new Packaging and Packaging Waste Regulation (PPWR), for the first time, there’s a single, harmonised framework that applies to all 27 Member States.
The PPWR replaces the patchwork of national rules that businesses have struggled with for decades, but imposes stricter requirements on packaging waste management.
For investors, this reform could reshape entire value chains, from how products are designed to how they’re packaged, shipped, reused, and reported on.
The PPWR is now in force and full implementation is set for August 2026.
What is the PPWR for?
Packaging waste in the EU has been growing at unsustainable levels. In 2022, the EU generated around 83.4 million tonnes of packaging waste, equivalent to 186.5 kg per person. The environmental consequences are significant (excessive resource extraction, persistent landfill waste, and plastic leakage into ecosystems), and the economic implications are just as material.
The PPWR builds on, and ultimately replaces, the Packaging and Packaging Waste Directive (PPWD), which for years allowed Member States to set their own implementation rules. That flexibility created a patchwork of fragmented obligations, inconsistent enforcement, and significant compliance costs for businesses operating across borders.
By shifting from a directive to a regulation, the EU introduces one harmonised framework that applies uniformly in every Member State, reducing legal complexity but raising the bar for companies to comply.
Who is under the scope of the PPWR?
The PPWR has a deliberately wide scope, applying to any company placing packaging on the EU market, whether directly as a producer or indirectly as a distributor, retailer, or online platform. This includes packaging manufacturers, food and beverage companies, e-commerce operators, logistics providers, and waste management services.
For investors, this means that portfolio companies in packaging-heavy industries (especially FMCG, retail, hospitality, e-commerce, manufacturing, and logistics) will likely face significant compliance obligations. In some cases, even companies that do not produce packaging themselves but rely on it extensively for their business models will be affected.
The PPWR sets out an ambitious package of reforms intended to promote circularity and sustainability:
First, it introduces binding waste reduction targets. Member States must achieve a reduction in packaging waste (compared to 2018 levels) of:
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Companies will need to rethink their packaging strategies early to contribute to these collective goals.
Second, by 2030, all packaging placed on the EU market must be recyclable “in practice and at scale”, not just technically recyclable in theory. To help companies prepare, the Commission will publish detailed recyclability criteria by 2028. For many producers, especially those relying on composite or multilayer packaging, this will require significant redesign efforts.
Third, the regulation imposes minimum recycled content requirements for plastic packaging. For example, PET beverage bottles must contain at least:
- 30% recycled content by 2030; and
- 50% by 2040.
These thresholds are designed to create a stable demand signal for recycled materials but could also tighten supply and drive up costs in the short term.
The PPWR also introduces reuse and refill obligations in sectors such as hospitality, retail, and foodservice, requiring companies to provide reusable options for certain product categories. It moreover harmonises design and labelling standards across the EU, introducing clear “design for recycling” rules and standardised consumer labels. Substances of concern, including PFAS and certain heavy metals, face additional restrictions, tightening compliance for sectors like food and beverage and cosmetics.
The PPWR strengthens Extended Producer Responsibility (EPR) schemes
Extended Producer Responsibility (EPR) is a policy principle where producers are held financially and operationally responsible for managing the packaging they put on the market once it becomes waste. Traditionally, this has meant paying fees into national EPR schemes, which fund waste collection, recycling, and proper disposal.
A key innovation is the introduction of eco-modulated EPR fees. Producers will pay more or less fees depending on the recyclability of their packaging: packaging that achieves higher recyclability scores will face lower fees, while less sustainable designs will become progressively more expensive to market. By 2030, packaging that fails to meet a 70% recyclability threshold will no longer be allowed on the EU market at all.
Legal Challenges and Likelihood of Annulment
The first lawsuits against the PPWR have been filed before the Court of Justice of the European Union (CJEU). These challenges tackle some conflicts with other pieces of EU legislation and EU principles, including free movement of goods, proportionality, and equal treatment between products.
One area that deserves special attention is the interaction between the PPWR and the existing Single-Use Plastics Directive (SUPD). In cases of potential overlap, it could be argued that the SUPD, being more specific in scope, should take precedence. However, as explained above, the PPWR is a regulation, which makes it directly applicable across all Member States without the need for national transposition and introduces a more technical, harmonised framework. This creates a more complex relationship between the two instruments than a simple hierarchy of rules.
The European Commission has already addressed this interplay in its Webinar on the PPWR, where it clarified several overlapping areas and compliance expectations (recording and slides available here).
At this stage, it’s too early to know how the court will respond. While it’s generally considered unlikely that these challenges will lead to an annulment of the regulation, individual provisions could be scrutinised, and in rare cases, specific obligations could shift.
We’ll keep monitoring the proceedings closely and will update this article as soon as there’s clarity on the CJEU’s approach and any potential impact on compliance obligations.
Recent developments also show that the European Commission has been revisiting some of its own initiatives. We’ve seen this with the Sustainability Reporting Omnibus, the Environmental Omnibus, and even the latest Deforestation Regulation guidance, which in practice softens certain obligations through soft law.
Given these precedents, it’s reasonable to expect that the Commission might introduce clarifications to the PPWR in the future. That said, any significant changes would likely take time and follow established consultation and legislative processes. For now, things remain stable, but it’s a space worth monitoring closely.
What does the PPWR mean for investors?
For investors, the PPWR carries both risks and opportunities. On the risk side, portfolio companies face rising transition costs as they redesign packaging, adapt supply chains, and invest in new reporting and monitoring systems. Companies that fail to comply risk not just financial penalties but also market exclusion and reputational damage, especially among sustainability-conscious stakeholders.
At the same time, the regulation creates significant opportunities. Companies that adapt early stand to benefit from brand differentiation and stronger positioning. Harmonised EU rules also simplify cross-border expansion for compliant businesses, removing one of the major friction points in scaling across the Single Market.
For startups and innovators developing recyclable materials, reuse models, or advanced waste-tracking technologies, the PPWR effectively accelerates market demand and capital inflows.
In summary, the PPWR will impact portfolio companies across multiple sectors, requiring early preparation and capital allocation for compliance. Those that embrace these changes proactively will reduce regulatory risk, strengthen ESG credentials, and capture new opportunities in sustainable packaging solutions.
With implementation deadlines approaching, now is the time for investors to map exposure, support transition planning, and evaluate how this regulation intersects with broader ESG strategies.
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