Retailers brace for logistics impact of EU’s new packaging reuse targets

Makers of cardboard-based packaging say the entire retail sector will have to switch to plastic crates and boxes because of the EU’s planned crackdown on packaging waste, which imposes reuse targets for packaging in transport and logistics.

The European Commission presented its Packaging and Packaging Waste Regulation (PPWR) in November, aiming to slash unnecessary packaging and promote reuse as well as recycling.

But while most of the political attention focuses on product packaging displayed on supermarket shelves, the new EU legislation also addresses bulk packaging, which is used in the logistics chain to protect goods from damage during transport, storage, and handling operations.

Under the Commission’s proposal, 10% of all goods shipped inside the EU will have to be transported in reusable packaging by 2030, with targets further bumped up to 50% by 2040 for e-commerce, 30% for transport, and 25% for stock-keeping.

For makers of cardboard, this will inevitably mean a surge in plastic crates and boxes to replace single-use corrugated board, which is currently the norm in logistics.

“The Commission’s PPWR proposal doesn’t say explicitly that plastic packaging is better, but by putting forward reuse targets, they are de facto promoting fossil-based packaging,” says Eleni Despotou, director general of the European Federation of Corrugated Board Manufacturers (FEFCO).

“The entire retail sector will be impacted,” she told EURACTIV.

For the e-commerce sector alone, this means 700 million new plastic boxes will need to be put on the market to replace corrugated packaging by 2030, Despotou said, referring to the 10% target for reusable packaging in transport.

Assuming the 2040 reuse target for e-commerce is met, “that means 3.5 billion new plastic boxes to be put on the market in 2040 alone,” she added.

The plastics industry doesn’t deny that increased packaging reuse could be an opportunity for the sector, saying in a statement that it was “open-minded” regarding the Commission’s proposed targets.

“On transport, a lot of the pallet crates already have reusable models,” said David Carroll, director of external affairs at Plastics Europe, a trade association. “This is not something entirely new. There are companies that are already heavily engaged in reuse. And it’s about expanding that model,” he told EURACTIV.

By 2050, about one-third of plastic packaging could be reused, or follow alternative new deliverable models instead of today’s single-use model, Carroll said, referring to an independent study carried out for the industry last year.

“These new reuse models could be applied for example in sectors like food and beverage packaging, transport packaging in the B2B sector, and e-commerce,” Carroll said.

At the same time, he also points to potential unintended consequences for the logistics chain, saying online retailers for instance will need to ship back the empty boxes with every single delivery – a move that is likely to increase transport emissions.

“A 10% target is essentially a test or a pilot, and I think most actors in the supply chain should work together to embrace it. But when it comes to the 50% target, there is no data at the moment to back it up,” Carroll said.

“So we genuinely don’t know yet if that 50% target would be positive for the environment or not,” he told EURACTIV.

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Retailers cautious

European retailers meanwhile remain guarded, saying they are still in the process of analysing the implications of the Commission’s packaging law, which was presented on 30 November.

“We don’t know yet whether reusable packaging will be feasible everywhere,” said Els Bedert, sustainability director at EuroCommerce, the organisation representing the European retail and wholesale sector.

EuroCommerce has a broad membership comprising food and general retailers such as Aldi, Carrefour and Tesco but also online vendors like Amazon, clothing group H&M and household brands like Ikea.

“We’re talking about consumer-facing businesses – food, retail, etc. – so the implications need to be explored further,” Bedert told EURACTIV.

Yet, retailers are aware that the impact of reuse targets on logistics could be far-reaching.

“If there is more reuse, this will impact how our products are packaged. And maybe also how they are sold,” Bedert said, adding that the decision needs to be made on a case-by-case basis. “We can’t say reuse will work for all sectors, it needs to be assessed further.”

Reservations aside, EuroCommerce remains open about novel solutions for the sector, saying retailers need to adapt to evolving consumer habits, including greater awareness about the environment.

“We are in a middle position: we know business models are changing, our sector is undergoing a transformation, and we accept that,” Bedert said. “One thing to keep in mind is that we sell products, not packaging.”

Business impact not fully explored

For cardboard manufacturers, though, the impact of packaging reuse targets on the logistics chain has not been properly explored in the European Commission’s cost-benefit analysis that was presented alongside its packaging law.

“In the supply chain, it is not as easily achieved as it seems: the packaging needs to go through all the different stages of the logistics supply chain – from the packaging manufacturer to the business customer, then to the retailer, and then to the final consumers, with potentially additional steps in between for storage in various warehouses,” FEFCO’s Despotou told EURACTIV.

And further logistics might still be added later on for order picking and deliveries, transport and handling depending on the types of goods, she adds. “These imply a lot of logistics steps, a lot of handling, which impacts the packaging itself,” she points out.

Changing from corrugated boxes to plastic boxes will also increase the overall weight of packaging and create other difficulties as it is unlikely that a standardised reusable plastic crate will be able to replace a tailor-made corrugated box, FEFCO argues, saying additional space will be required for storage as a consequence.

All this “will certainly increase the empty space inside the crates and increase the number of shipments for the same quantity of products,” Despotou said.

At the end of the day, this means “more trucks, more traffic and related emissions,” she warned. “Nobody thinks about this when they’re talking about reuse. And the Commission’s impact assessment doesn’t look into this, it is somehow omitted from the evaluation,” she told EURACTIV.

At Plastics Europe, David Carroll agrees that not all aspects of reuse have been explored in the Commission’s cost-benefit analysis.

For instance, the proposal doesn’t clearly set geographical limitations that would apply to reuse targets in B2B packaging.

“You could read it in a way which says that within a large corporation, all packaging needs to be shipped around the world empty to be reused. And that’s exactly where we think it should be a slightly more pragmatic approach, which considers the transport emissions, the reverse logistics and the collection of used pallets with a deposit return scheme,” he says.

Meanwhile, other fundamental questions remain open, for instance, how many times the packaging will be reused, what is the carbon footprint associated with the washing and returning of empty boxes as well as the reverse logistics, Carroll said.

Besides, reusable plastic crates are not eternal either – eventually, they will also wear off and enter the waste stream, he remarked, adding that the Commission’s impact assessment “does not clearly enough demonstrate the benefits in all these areas”.

But despite all these reservations, Plastics Europe still believes that the Commission’s proposal is “an interesting starting point for discussion”.

“We are not saying no by any means to reuse. Because reuse is an important part of the plastics industry’s future business models, and journey towards greater sustainability,” Carroll said.

Packaging makers 'still concerned' about reuse targets in new EU law

The European Commission’s new packaging law has drawn criticism from manufacturers, who warn against a shift of focus from recycling to reusing materials. While the new proposal is watered down, concerns remain.

[Edited by Nathalie Weatherald]

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