History

In 1991, Minister for the Environment Klaus Töpfer created a new model for waste management. That year, the Verpackungsverordnung (Packaging Ordinance) set out the first statutory provisions that provided for a second form of disposal for consumer packaging next to municipal waste management activities. What became known as the 'dual waste management system' was born. Driven in no small part by the limited disposal resources available at municipal level, the free market was asked with finding its own answer to the issue of managing and recycling packaging. The retail and industrial sector were required to assume responsibility and Duales System Deutschland, the first private-sector waste management system to support municipal waste management activities, was created for residential collection and recovery of retail packaging. Despite the initial challenges, a whole new segment of the economy evolved from this joint project with the retail and industrial sector.

Over the years that followed, the Verpackungsverordnung was amended repeatedly. The European Union followed suit and passed the European Parliament and Council Directive 94/62/EC of 20 December 1994 on packaging and packaging waste. This was implemented by the Verpackungsverordnung 1998, which replaced and repealed the Verpackungsverordnung 1991. The legal framework for managing packaging waste was harmonised throughout Europe. EU-wide recovery targets were also set.

The Verpackungsverordnung was already based on the principle of producer responsibility. Producers and distributors of packaging ('initial distributors') had obligations to fulfil relating to returns, recovery and deposits for the packaging of the products they distributed. They were required to accept returns of packaging free of charge, or to pay a fee for its disposal and contribute to the recovery of packaging. Prior to this point, municipalities had born sole responsibility for waste management. The first version of the Verpackungsverordnung envisaged a monopoly for waste management. This led to the 'dual German system' being established to implement these new obligations. The monopoly was initially tolerated by the Federal Cartel Office because there was a need at the beginning to create a functional infrastructure for the collection, sorting and recovery of packaging from private final consumers. 

However, the emergence of the packaging waste management sector steadily reduced the need for such a monopoly and the Federal Cartel Office decided to end the monopoly of Duales System Deutschland in 2003, effectively opening the market up to competition.

In 2010/2011, the German Environment Agency launched the 'simulation for further developing the Verpackungsverordnung'. First, two sub-projects used expert opinions to analyse what the content of a potential recycling bin might be and how an expanded recyclables collection might be organised and financed. As part of a third sub-project, the relevant aspects of an expanded recyclables collection were discussed with different stakeholders. The areas requiring improvement in the previous version of the Verpackungsverordnung were considered within the context of financing the system. The solution was to establish a central agency that would be entrusted with the necessary powers to carry out duties previously reserved to government authorities: the Zentrale Stelle Verpackungsregister (Central Agency Packaging Register – ZSVR). This central agency was established to remedy existing weaknesses within the system through the following main instruments and core responsibilities:

• statutory regulation and control of the financing mechanisms between the systems by calculating market shares

• binding determination of statutory provisions on producers' duties

• defining guidelines for checking system participation among large producers

At the beginning, there were a variety of different views about exactly how the ZSVR would be structured and what its precise duties would be.

In 2014, the free market system for packaging waste management was beset with difficulties. The parties under obligation construed the exceptions within the Verpackungsverordnung in such a way as to escape some of their responsibilities. The decentralised nature of the data meant that enforcement action was not practically feasible. The system was on the verge of collapse. However, it was possible to avert the crisis through a one-off payment from the retail sector to individual systems. The seventh amendment of the Verpackungsverordnung removed the exceptions and prevented the situation from repeating itself in the near future. The privileges for returns at point of sale were repealed and the use of sector-specific solutions to manage waste was made more restrictive so that it was limited to a realistic amount.

The near collapse of the system in 2014 made it clear to everyone involved that the Verpackungsverordnung contained loopholes and that there was no alternative to official, governmental oversight to strengthen and develop the system from where it stood. During the 2011 simulation, four associations had told the Federal Government that they would agree to establish the ZSVR and provide pre-financing:

• Bundesvereinigung der Deutschen Ernährungsindustrie e. V. (Federation of German Food and Drink Industries – BVE)

• Handelsverband Deutschland – HDE e. V. (German Retail Association)

• IK Industrievereinigung Kunststoffverpackungen e. V. (German Association for Plastics Packagings and Films)

• Markenverband e. V. (German Trade Mark Association)

Due to various political upheavals this assurance was not followed up on until the end of 2014. In talks with the Federal Ministry for the Environment, Nature Conservation, Construction and Nuclear Safety, these associations reaffirmed their commitment, established a GbR (an association under German law) for the project and appointed Gunda Rachut as project manager. In autumn 2015, the GbR was converted into a GmbH (a limited liability company under German law) and the project managers became the company's management board.

A study published in Mainz in November 2015 by the Gesellschaft für Verpackungsmarktforschung (GVM), a market research institute specialising on packaging, about potential ways to increase the prevalence of licensing for retail packaging for final consumers revealed that loopholes totalling roughly €200 million annually still remained despite the seventh amendment of the Verpackungsverordnung. Law-abiding companies participating in the system had subsidised this shortfall, which was clearly unacceptable because it meant that competition was unfair, demonstrating just how necessary it was to establish a central agency. Establishing a central agency was still very clearly necessary.

Looking beyond Germany's borders, it was clear that the phenomenon of free riding was also a serious problem in every other Member State of the European Union. Provisions governing voluntary returns were being used to avoid financial responsibility for packaging waste management. Because a register for some of the parties responsible for products had already been implemented with the Stiftung Elektro-Altgeräte Register, it made sense to use a similar structure to solve the issue in packaging waste management.

Lawmakers planned to make statutory provisions governing the central agency by way of the Wertstoffgesetz, a general Recyclable Materials Act originally envisaged by the German Federal Ministry for the Environment, Nature Conservation, Construction and Nuclear Safety that would establish a standardised nationwide system for the joint collection of packaging and non-packaging items composed of the same material in collection containers with local authorities having sole responsibility for recycling collection. This Wertstoffgesetz would also have provided for increased recyclables collection. The expansion of recyclables collection for items composed of the same material while maintaining a private sector system had been met with criticism from a local authority point of view. The issue had been the subject of considerable public debate since the simulation in 2011. As it was likely that there would be no consensus between the Federal Government and the Bundesrat, which represents the interest of the Federal States in the legislative process, on a Wertstoffgesetz that retained private sector collection, the Federal Ministry for the Environment, Nature Conservation, Construction and Nuclear Safety proposed a draft of the Verpackungsgesetz (Packaging Act) on 11 August 2016 that provided for the ZSVR as a new institution. The Act received assent from the Bundestag, the German Parliament, in March 2017, was put to the Bundesrat on 12 May 2017 and was published in the German Federal Law Gazette on 12 July 2017.