Update: how will PPWR affect the capsules industry?

20 June 2024

Martyna Fong

Article written by Martyna Fong, Director, Market Intelligence, AMI

I’m in the process of researching for the update of our Single Serve Capsules report and each conversation I have with the industry enriches me with new insights on PPWR articles relating to capsules. You may remember my blog post from the 7th of May - I can now provide some more details to correct/explain the initial observations.

It is clear to me that the wording of regulations is confusing and (still) subject of debate. The text has changed significantly since the first draft on November 2022 – with capsules materials neutrality and removing mandatory composting for all single serve units. Some nuance still persists, however, and it will be down to individual member states interpretation of the regulation and due adoption that will provide a clearer view over what’s ahead.

This is the summary of how I interpret the regulation:

  • Capsules will fall in the definition of packaging 18 months after the law is in force, and that will mean that compliance with the EU PPWR will be necessary. 1

  • There is a distinction between permeable or soft after use and non-permeable x single-serve formats, but no strict definition of what ‘permeable’ or ‘soft after use’ and non-permeable actually mean. I tend to think of this as the former being soft pods versus rigid capsules for the later. The paper/moulded fibre capsules would fall in the “permeable or soft after use” definition, therefore expected to fall within the scope of the mandatory applications to be compostable.

  • Nespresso Professional capsules, whilst soft, are non-permeable, and therefore expected to fall within the rigid capsules definition.

  • Permeable/soft-after-use solutions are mandated to be composted in industrially controlled conditions. Non-permeable (rigid) capsules will have to find their way to be recycled with better access to waste management facilities. 2

  • 12 months after the law is in force, the Commission will request that compostability standards be revisited to better reflect reality and technological progress. There is a need for a harmonised approach towards home composting that is scheduled for a more structured review. The industrial composting will include decomposition in anaerobic digestion, so in general there will be more formal changes in the compostable segment, including the need to re-test for compliance with standards as well as more harmonised labelling. The provision implies that an EU harmonised standard is requested for home compostability (as there is none for the time being) and an update on the industrial composting standard (which already includes references to anaerobic digestion). 3

  • The new text grants Member States some flexibility over adopting other compostable solutions. The way I understand the latest text is that depending on the existing waste management infrastructure, Member States may choose either to allow it or not compostable packaging to be collected and managed in the biowaste fraction. It is important to note here, that for the specific case of compostable coffee capsules, this decision is only to do with the end-of-life of compostable capsules, and not to do with bringing compostable capsules to market. If a Member State decides to not accept compostable capsules in the organic waste stream, they can still be sold in this State, and will be disposed of in with the residual waste. In this situation there may be higher EPR fees.

  • Furthermore, the decision to allow compostable capsules in the organic waste stream has no bearing over the use of plastic capsules. Plastic capsules will be allowed in all Member States as long as they comply with design for recycling and recyclability at scale provisions, as laid down in the PPWR. If there was any possible outright ban on plastic capsules, there would be a specific paragraph about it alongside other items subject to restriction of use. 4

  • From 2030 the design for recycling guidelines will determine compliance with the regulation. We need to note that compliance will be measured based on the weight of materials in the packaging component (excluding the weight of filled product; and classed as A (95% of one material in the mix), B(80%), C(70%). All three are OK until 2038 and only A and B afterwards. From 2035, compliance will need to be met also for recyclability at scale, which may result in conclusion that the ground coffee contaminates the recycling stream and doesn’t work at scale. This could be avoided with upgrading sorting, shredding, washing technology for post-consumer recycling. 6

  • As an aside point, paper/moulded fibre capsules will not be accepted in the paper recycling stream, given more stricter guidance on labelling and likely non-compliance with design for recycling for paper stream.

There are targets of inclusion of recyclates The minimum recycled content provisions apply to plastic only, per packaging type and format, calculated as an average per manufacturing plant and year. Eco-modulation will incentivise higher inclusion. For plastic capsules, the relevant target is 10% recyclate inclusion in 2030 and 25% in 2040, with a caveat that the recyclates available comply with food contact regulations and there is enough good technology to deliver targets. Effectively, due to safety concerns, there is a derogation for a mandatory minimum recycled content inclusion for capsules. 7

  • For recyclates inclusion targets for plastic, one more thing worth noting is that bio-based feedstocks will be assessed in future by the EU Commission, and could potentially become part of the methodology to achieve the minimum recycled content targets. 8

  • In general, the EU is increasing targets for collection and recycling of all packaging formats and materials, and the sentiment is to avoid landfill. This means there will be initiatives to improve waste collection and develop infrastructure with a technology upgrade for plastics, Aluminium, paper/paperboard and glass; as well as mandatory separate collection for organic waste. The separate collection of the biowaste fraction is ruled under the EU Waste Framework Directive and requires from 1 January 2024 the mandatory separate collection of the organic waste fraction. This will help the compostable capsules industry tremendously, in diversion from landfill and/or incineration.

Read our reference information for the above article here

About AMI: AMI has been instrumental in getting the single serve capsules industry together to drive sustainable progress via our specialist events and market research. The next Single Serve Capsules conference takes place in Malaga, 30.09-2.10.2024.

We are also working on the new market report that will help the industry and investors in strategic interventions to manage risk.