What automotive logistics and supply chain leaders can do to prepare for PPWR

The PPWR applies to all packaging, explicitly including transport packaging, which means that automotive logistics and supply chain leaders who operate in Europe will be held to account if their packaging is not in compliance. One of the most important changes is that extended producer responsibility (EPR) now applies. Users and manufacturers of industrial packaging must participate in EPR systems, report packaging quantities and, where applicable, appoint authorised representatives in other EU countries. 

Eric Lambert, managing director of GALIA and chairman of Odette, says that the spirit of the PPWR is to work on the full life cycle of packaging from cradle to grave with a target to dramatically reduce what is disposed of at the end of life, while previous directives only focused on increasing recycling.

Lambert says that what it comes down to is a re-engineering of packaging solutions, with a focus on waste reduction. Certain materials that are impossible to reuse or recycle will need to be banned, or at least have their usage reduced, and this will all need to be done in a way that is reportable and auditable.

PPWR: The underestimated challenge facing the automotive industry

The EU’s Packaging and Packaging Waste Regulation (PPWR) is more than just a recycling requirement. It is changing roles, responsibilities and decision-making processes throughout the automotive supply chain.

Companies will need to measure and prove compliance with various KPIs, including sufficient recycled material content, maximised packaging density, and minimum rates of recycled and reused packaging. Reporting will influence fees under the EPR concept, and declaration of packaging material types and counting of reused and recycled items will be mandatory.

Lambert says that he recommends the automotive logistics industry and supply chain starts reviewing all existing packaging solutions, as this process is time-consuming. Previously, at ALSC Europe last year, Lambert said: “There is no reason not to start, the sooner the better. Start to investigate how to eliminate empty space, protections that are not needed, and materials that are not recyclable.”

The positives and negatives of the PPWR

Lambert explains that while the system is designed to be punitive, with potential fines for non-compliance, there are upsides to compliance, as optimising packaging density can reduce transport costs and the overall need for packaging. The overall cost impact is a complex combination of increases and potential savings.

GALIA has issued a guide with practical recommendations on materials to use, reduce or avoid. “We are working on how to support our industry by a guide of practical recommendation,” he explains. He says the industry should focus on packaging for new parts and vehicles launching in 2029, 2030 and beyond. “The first thing to do is to review your packaging design.”

Following this, he recommends reviewing and preparing for Extended Producer Responsibility to calculate potential costs, as the financial impact could be significant and varies by country. “It’s a kind of tax that you will have to pay, so that means there is money at stake, and the rate is not the same from one country to another because it’s linked to the national waste treatment process,” he says.

Automotive Logistics & Supply Chain Europe

Eric Lambert will be speaking at ALSC Europe in Bonn on 18 March. Secure your spot now!

Data as a key to compliance

Companies should be prepared to calculate and report on the tonnage of materials used, as this will determine fees.

Clean, quality data will be essential in proper compliance with the PPWR. Companies should ensure their IT systems can track packaging details, including quantities used.

“You will have to report on different KPIs, such as how much you have recycled, how much you have reused, what the empty space ratio is and so on. We don’t know everything in detail for the moment because some of the calculation methods will be published between now and 2030,” he says. “So, you need to be sure that your IT system can keep track of your packaging.”

While container management systems (CMS) can track reusable packaging fleets, many companies do not track internal protective materials which could be noncompliant. As such, it’s crucial to clean master data and install counting systems to accurately track all packaging components and their materials.

“A CMS can track the quantity sent from one customer to a supplier or from one supplier to a customer, but otherwise they are blind,” Lambert says. “The devil is in the detail. Inside a reusable container you may have to protect a part with foil or a plastic bag, but most companies are not really tracking that in detail. Even if the detail is not yet clear, it’s a good time to start to verify what you track and what you do not track.”