New allocation of packaging waste: The rules still risk creating unequal competitive conditions
Dansk Producentansvar (DPA) has sent the draft for the allocation of packaging waste for 2027-2028 out for consultation. VANA views several of the practical changes positively, but we simultaneously point out a number of significant problems in the way the allocation is calculated in our consultation response. For VANA, the goal is clear: Members should pay their fair share of the costs of their packaging – but they should not finance a larger share through VANA, because the allocation model itself creates distortions between the producer responsibility organisations.
The allocation is important because it determines how much of the municipally collected packaging waste the individual collective schemes – and thus their member companies – have to pay for.
VANA looks positively upon the fact that combined collections are increasingly allocated to one collective scheme, and that greater consideration is given to joint municipal collections. This can make the practical handling simpler and reduce the need for subsequent distribution of quantities and payments between the collective schemes.
Fundamental challenge persists
Since the introduction of producer responsibility, VANA has pointed out that the allocation model can create unequal economic conditions between the collective schemes. According to VANA's assessment, this challenge is not resolved with the allocation for 2027-2028. The combination of two-year allocation periods, historical data, and the so-called "times 2 rule" means that the collection obligation that follows a producer does not correspond to the quantities of packaging the producer has brought to the market.
What is the "times 2 rule"?
When a new producer enters the system during an allocation period, the producer's reported quantities are used to calculate the responsibility in the following period. In certain cases, the quantity is multiplied by two to compensate for the fact that the producer was not part of the previous allocation.
The problem is that the rule, according to VANA's assessment, is not applied equally to all new producers. This can mean that two companies that over time bring the same amount of packaging to the market have different collection obligations solely due to the timing of their registration.
VANA also points out that the proposed application of the rule means that so-called free riders – companies that have not registered in time – do not bear the same financial responsibility as companies that have registered in time.
It should be simple: The same quantity of packaging should trigger the same responsibility. Allocation may sound like a technical detail, but it has very concrete significance for our members. If one producer responsibility organisation (PRO) has a greater collection obligation than another in relation to the members' packaging quantities, the competition conditions become uneven – and in the end, it can affect the price that companies pay for their producer responsibility.
Managing Director, CEO
The revenue can be in one place – and the cost in another
VANA has also identified two other problems in the proposed allocation:
Firstly, producers who have been deregistered and are no longer covered by producer responsibility seem to still be included in the calculation of the upcoming allocation.
Secondly, producers who have changed collective scheme are still included in the allocation of the previous scheme. The consequence can be that the revenue follows the producer to the new collective scheme, while the collection costs remain with the previous scheme.
It is VANA's assessment that this is not a sustainable basis for competition between the collective schemes.
VANA proposes a simpler relationship
The starting point should be simple: The producer's financial responsibility should follow the producer's market share – and the collective scheme of which the producer is a member.
Therefore, VANA has suggested in its consultation response, among other things, that the "multiply by 2 rule" is applied uniformly to all new producers who were not part of the previous allocation, and that free riders are treated according to the same principle.
At the same time, producers who are no longer covered by producer responsibility should not burden a collective scheme’s future allocation, and a producer who has changed collective scheme should follow the new scheme in a new allocation period.
For VANA's members, the goal is clear: They must pay their fair share of the costs associated with their packaging – but they should not finance a larger share through VANA because the allocation model itself creates disparities between the collective schemes.
Read the full consultation response here (Danish).