Partners of the coverage: Polish Federation of Food Producers, Employers' Association; Rekopol, Packaging Recovery Organisation

During a debate in Karpacz on the proposed extended producer responsibility system, business representatives discussed with politicians how to reconcile the need to protect the environment and implement a circular economy with market realities, as well as why a state monopoly based on a fiscal-redistribution system could be harmful to all stakeholders in the packaging waste management sector.

The draft law on packaging and packaging waste, submitted for consultation in August, is intended to change the existing waste management system, but business representatives from the food, trade and packaging industries raise fundamental objections to it.

Marginalised recovery organisations

The first objection concerns the significant reduction in the role of packaging recovery organisations. Today, as explained by Krzysztof Baczyński, President of the Association of Employers in the Industry, Packaging and Packaged Products Eko-PAK, producers are required to achieve an appropriate level of recycling. This task is entrusted to what are known as recovery organisations, which contract the purchase of documents to confirm recycling. Waste is collected by municipalities and sent for treatment. Raw materials in the form of glass are sent to glassworks, PET bottles and metal cans to other processors, and waste that cannot be processed is sent for incineration or landfill.

What is the role of recovery organisations in this process? ‘Recovery organisations enter into contracts with waste management companies for the collection and transfer of waste for recycling’, said Jakub Tyczkowski, President of the Rekopol Packaging Recovery Organisation. He explained that the regulations require documentation of the fulfilment of obligations under the Act by means of documents confirming that a specified amount of raw material, for example glass cullet, has been collected from the market and sent for recycling. This system has been in place since 2002. However, the amendment to the Packaging and Packaging Waste Act, which is to introduce the EPR system in Poland, will effectively eliminate packaging recovery organisations – most of their tasks will be transferred to the National Fund for Environmental Protection and Water Management. This raises concerns that goods producers are going to lose touch with the waste management industry and that businesses are going to find it harder to eco-design.

Lack of cost transparency

As explained by Andrzej Gantner, Vice-President of the Polish Federation of Food Producers, under the new system, producers will pay fees set by a regulation of the Minister of Climate and Environment. The amount of these fees is to be determined in consultations, but – in his opinion – mainly with the state administration: the Institute of Environmental Protection, the National Fund for Environmental Protection and Water Management and the EPR Council, in which 13 of the 22 places, i.e. the majority, will be held by representatives of the state administration. This means that consultations within this body become bogus. The National Fund for Environmental Protection and Water Management is to use these fees to finance packaging waste management and transfer them to individual actors – self-governments, sorting plants, waste companies and recyclers.

‘In reality, it will be the National Fund for Environmental Protection and Water Management that decides who gets the money and who does not. What is interesting is that the rule governing the National Fund for Environmental Protection and Water Management's operations as the EPR operator is to be kept secret and agreed exclusively with the ministry. The Act also does not contain any mechanisms for the National Fund for Environmental Protection and Water Management to be held accountable for the lack of efficiency of selective collection or the failure to achieve recycling targets. There are also no mechanisms to ensure that the Act complies with Article 8 of the Waste Directive, which is intended to protect producers and consumers from excessive financial burdens. The net cost rule stipulated in this article is intended to ensure that everyone pays only for their own waste, and that these fees are reduced by the revenue generated from the sale of collected raw material. We do not see that this mechanism is guaranteed. This is particularly unfair to the agri-food sector, which, under this law, will finance raw material streams that will then be processed as recycled material for other sectors’, said Gantner. He emphasised that the legislators do not see any connection in the act between the EPR tax paid and the quality of selective collection, which is particularly important for food producers who use multi-material packaging to ensure consumer safety. This packaging, in a system focused on high environmental efficiency, should be collected and sent for recycling. Without this mechanism, the EPR tax is to become a food safety tax, and eco-design is bound to become an unnecessary cost, because the lack of good selective collection means that some of this packaging will end up in municipal incinerators or landfills.

‘The only thing that is certain in this act is that we are to pay a tax on packaging and not be interested in how it was determined or on what rule the EPR operator, i.e. the National Fund for Environmental Protection and Water Management, will operate, which is to be so all-powerful that there will be no appeal against its decisions’, said Gantner. And he pointed to the dilution of responsibility. ‘No one in the extended producer responsibility system proposed by the Ministry of Climate and Environment actually bears any responsibility. (...) The National Fund for Environmental Protection and Water Management, as the state EPR operator, unlike the private recovery organisations operating today, bears no responsibility whatsoever’, said the expert. In his opinion, the current system, although also imperfect, ’at least adheres somewhat to the rule of a free market economy and adapts to the needs of municipalities, sorting plants and recyclers’. According to the Vice-President, the new regulations mean that the state takes over waste management and reduces businesses to the role of passive payers. Gantner reported that businesses contributed PLN 1.4 billion in packaging fees last year. The act may increase the fees paid by businesses to PLN 5 billion, and thus reduce costs for consumers.

Where will the money from the fees actually go?

Michał Połuboczek, a member of parliament from the Polish party Confederation, expressed the opinion that the structure of the system, in which the National Fund for Environmental Protection and Water Management manages the money, is ill-conceived. He believes that the fund will allocate these funds to the creation of branches in individual provinces, which creates the risk of nepotism. ‘It will be another toll for creating political support for a party that will take over this creation. So I am not going to vote for this project, either in the subcommittee on waste management or in the environmental commission," said Deputy Połuboczek. He also reserved that the idea of customers paying for recycling as part of the price of the purchased product is sound.

The panellists asked themselves why the ministry is in favour of a project that causes such resistance among entrepreneurs. ‘Why is the ministry pushing for it?. Firstly, because it can. Secondly, because it has to’, said Krzysztof Baczyński with irony, describing the situation as ‘the autocracy of an official’ imposing his solution on other stakeholders. He also noted that the ministry is under pressure from other stakeholders, including self-governments, which want the money from the EPR ‘right now’. ‘In our opinion, this project is beyond saving. We ordered a legal analysis from a reputable law firm, which found nine violations of European law, nine violations of the constitution and 11 violations of European law. This project needs to be rewritten from scratch to be fixed’, said Baczyński.

Risk of price increases in shops

The question is whether Poland will face penalties for delays in work on the EPR system. ‘If these penalties were to be imposed on us, they would have been imposed on Poland two years ago, because we are two years behind schedule. But Poland is not the record holder; there are countries that are still struggling with the implementation of the amended waste directive’, said Baczyński.

How can the EPR system be structured properly so that all stakeholders are satisfied? According to trade representatives, fees must reflect real costs.