Understanding the European Packaging Directive - Just Drinks
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Understanding the European Packaging Directive

25 Feb 1999

As the result of an EC Directive,EC/94/62/C, members of the European Union are obliged to achieve certain percentages inthe recovering and recycling of packaging waste, with the collection of recycling data anadditional requirement. The Food and Beverages Sector, of whichmany companies are packers/fillers and often retailers (in the form of Drinks Dispensers)will bear a heavy recycling burden, at best 36 per cent, from 2001. In addition by 2000,wholesalers also have an obligation that will be equally difficult to fulfil.

As the result of an EC Directive,EC/94/62/C, members of the European Union are obliged to achieve certain percentages inthe recovering and recycling of packaging waste, with the collection of recycling data anadditional requirement.

The Food and Beverages Sector, of whichmany companies are packers/fillers and often retailers (in the form of Drinks Dispensers)will bear a heavy recycling burden, at best 36 per cent, from 2001. In addition by 2000,wholesalers also have an obligation that will be equally difficult to fulfil.

Besides the costs of recovering andrecycling packaging, the administrative costs will be high. This is where the use ofquality software, such as JBA’s Activity Based Costing (ABC) will significantlyassist the obligation calculation.

EU countries are each implementing theirnational solutions. In Germany, for example, most major distribution companies belong toan organization which certifies products under the ‘Duales System’ or’Green Dot’ system. Fritz Niehsen at JBA, Germany explains: “The’Duales System’ utilizes the Green Dot as its trademark. It indicates that thepackaging manufacturer or filler has paid a license fee to the System for packaging markedwith this symbol. This license fee, which is used to finance the subsequent collection andsorting of the packaging, is based on the actual waste management costs.”

Shared responsibility
The UK is the only country with a shared producer approach to recycling, with theobligation going right through the supply chain. Other European countries, such asGermany, have single point responsibility.

Nigel Wilmshurst of Ceres Logistics, acompany which interprets EC directives to calculate companies’ obligations says Ceres’ aimis to help European companies reach the most cost-effective solutions, avoiding penaltiesor undue costs. The current legal obligations, he says, are only the start of the producerresponsibility schemes.

However, Nigel Wilmshurst does not see thisEuropean trend being adopted by America. Although the USA does not have a centralizedscheme, individual states have their own environmental schemes and legislation, a systemwhich seems to work well. Obviously though the US producers with plants serving theEuropean market-place must take these measures very seriously.

Investment by German industry in the ‘Duales System’ is currently approximately DM 7 billion.

In the UK, where responsibility links alongthe supply chain, those businesses which have to register will either own packaging,supply packaging, have a turnover exceeding £5 million ($7.5m) (in 2001 £1 million($1.5m)) or handle more than 50 tons of packaging a year. Companies can undertake theirobligations individually or join a scheme of which there are now many.

The UK targets are:Year Recovery Target Recycling Target

Year Recovery Target Recycling Target
1998 36 per cent 7 per cent
1999 38 per cent 7 per cent
2000 43 per cent 11 per cent
2001 on 52 per cent 16 per cent

Companies must calculate and analyze thetonnage of packaging waste they have to recover and the quantity to be recycled, includingcalculating the percentage obligation which depends on use of the packaging and thenational targets for the year in question.

Percentage obligations are:

Raw material manufacturing 6 per cent
Converting 11 per cent
Packing/filling 36 per cent
Selling 47 per cent
Secondary Provider 83 per cent

An integrated approach
In order to comply with targets in the UK and Europe, accurate record-keeping is vital andJBA offers practical help through its JBA System 21 ERP solutions for the Food industry.Reports can be printed with all data required for official compliance and System 21 allowsfor mistakes and omissions to be adjusted before generating a report either to completelyrebuild a month’s or quarter’s packaging data (at least an annual requirement) or toannually adjust figures in a “Period 13” function.

The EC packaging directives, together withpressures over the Year 2000 date and over new arrangements for handling single currencytransactions result in a considerable amount of responsibility for IT managers.