The growth of a low-carbon circular economy has been impeded in recent years by rising packaging usage and low rates of recycling and reuse. In response, the European Commission will be repealing the current Directive on Packaging & Packaging Waste 94/62/EC and will replace it with a new regulation requiring member states to reduce packaging waste by five per cent by 2030 and 15 per cent by 2040, compared to 2018 levels.

This will contribute to combat rising emissions, biodiversity loss, pollution, while also promoting sustainable practices. The proposed draft outlines the fundamental specifications for packaging design and composition, as well as for packaging recycling and collection. The principal objective of this legislation is to reduce and to make all packaging recyclable by 2030.

This will introduce mandatory targets for recycling, including the use of recycled plastics, by reusing, refilling, depositing, and returning.

This is the latest proposed EU measure to promote a circular economy.  While the scope and the ambition of the proposed law is overall being viewed positively, it is inevitable that many industries in the EU and Malta will be impacted. Local businesses as well as importers of packaging into Malta fall within the scope of this regulation.

Industries need to adopt new packaging measures, such as using different raw materials to create the right environmentally friendly packaging for their products (which do not contain plastics) and investing in new machinery and equipment to be able to re-engineer their design for product labelling in order to become compliant by 2030.

Enterprises are most likely to incur costs as a result of these modifications, including those related to research and development, retooling, or setting up new waste management facilities. Smaller-sized businesses are more likely to experience financial challenges to satisfy these requirements.

Although the new regulation will help operators move towards a more sustainable economic model and transition to circular practices, companies should aim to be at the forefront on the green transition. The transition from linear to circular practices might be challenging for our companies to remain competitive.

The new regulatory framework must certainly fit the purpose to effectively prevent packaging from becoming waste, and to boost recyclable and reusable solutions while preserving packaging functionalities. Future targets will be crucial to drive investment into appropriate packaging solutions, reuse schemes and waste management technologies.

With such a robust regulation, the local waste system will be challenged. However, with the right policies and suitable systems in place, the journey from waste to resource will be another milestone for our country to achieve the EU’s 2030 and 2040 goals.

EU member states will be required to reduce packaging waste by five per cent by 2030 and 15 per cent by 2040

Malta Enterprise has been closely following the discussions taking place at EU level to safeguard the interests of local players.  As a government agency, we are at the forefront of raising awareness and engaging with relevant players on this draft regulation. Expected to take effect in late 2024, it is essential for businesses to look closely at what is required and focus on making improvements to be compliant.

To this effect, an information session was recently organised by Malta Enterprise together with the Ministry of the Environment, Energy and Enterprise and the Environment and Resources Authority to shed light on the possible impacts of this proposed EU legislation with industry operators.

Kurt Farrugia, CEO of Malta Enterprise, emphasised the importance of businesses becoming familiar with the rules included in the draft regulation. He exhorted businesses to familiarise themselves with the new requirements to ensure they are compliant with the set targets before they are enacted.

Moreover, Farrugia made reference to the Smart and Sustainable Investment Grant Scheme which has recently been updated to fund investments to enhance the competitiveness of the enterprise through the optimisation of the use of resources in their activities. While there is a cost to comply with this draft regulation, doing so might also result in significant savings for businesses.

The Malta Business Bureau has conducted an in-depth assessment report on how the regulation will impact Maltese industry and reiterated that the commission must clarify a number of articles, such as the possibility that single-use plastics will affect food safety and the need for a reasonable transition period for businesses to align their practices with the regulation’s obligations.

As the regulation is still in its discussion phase, Malta Enterprise will continue keeping industry abreast with any updates. Companies interested in receiving further information or would like to learn more on the support measures administered by Malta Enterprise can contact us on euaffairs@maltaenterprise.com.

Kelly Tockarshewsky is an EU affairs intern at Malta Enterprise and is reading for an MA in European Politics, Economics, and Law at the University of Malta.