Deposit system – what are the new obligations of entrepreneurs?

With an expert eye

Magdalena Pasik, Water Management Engineer and Environmental Engineer

Environmental preservation and effective waste management stand as crucial challenges in contemporary society. On October 13, 2023, Poland implemented substantial legislative revisions concerning packaging and its proper disposal.

The amendment to the Act on Packaging and Packaging Waste Management, along with other related acts, has brought forth innovative measures aimed at enhancing the efficiency of waste management, particularly concerning beverage packaging. A pivotal aspect of this amendment is the introduction of a deposit system, designed to incentivize selective waste collection and promote responsible practices in this domain.

It’s important to note that the implementation of the deposit system will occur gradually, with its full realization scheduled for January 1, 2025. This transitional period allows both consumers and businesses to adjust to the new regulations. Nevertheless, these changes set ambitious environmental protection and waste management goals for Poland, accompanied by their respective benefits and challenges. Therefore, it’s crucial to delve deeper into these modifications and comprehend the implications they bring forth.

What is the deposit system?

The enactment of the new Act on packaging and packaging waste management, along with other significant legislative changes effective from October 13, 2023, marks a crucial stride towards achieving more sustainable waste management practices. A primary objective of this amendment is to enhance waste management, particularly concerning beverage packaging, which constitutes a significant portion of municipal waste.

A key component of the Packaging Act amendment is the introduction of a deposit system. Under this system, consumers purchasing packaged beverages will pay an additional fee, known as a deposit, which they can reclaim upon returning the used packaging to designated collection points. The deposit is a refundable sum paid by the consumer at the time of purchase. When the packaging is returned, whether through special return machines or collection points, the deposit is refunded—a straightforward system to implement.

It’s important to highlight that the full implementation of the deposit system will occur gradually, with complete adoption expected by January 1, 2025. This timeline allows both consumers and businesses ample time to adjust to the new regulations and embrace more eco-friendly packaging management practices.

Main goals of the system

The deposit system serves several significant purposes. Firstly, it aims to mitigate waste generation, particularly from beverage packaging, which frequently ends up in landfills or unsuitable storage locations. Secondly, the system fosters recycling by facilitating the reuse of raw materials, thereby diminishing the demand for new natural resources. Lastly, the introduction of deposits plays a pivotal role in raising consumer awareness and motivating them to embrace a more sustainable and eco-conscious approach to shopping.

What packaging will be covered by the deposit system?

Starting from 2025, the deposit system will encompass three types of packaging: single-use plastic bottles up to 3 liters, refillable glass bottles up to 1.5 liters, and metal cans up to 1 liter. Those placing beverages in these types of packaging covered by the deposit system will be mandated to display the deposit value on cans or bottles. Additionally, these packages must bear a distinct mark signifying their inclusion in the deposit system.

Currently, the planned deposit amount is 50 groszy, but the legislation stipulates that the maximum deposit cannot exceed PLN 2. All sellers will be required to add a deposit to applicable packaging. Generally, only large stores with an area exceeding 200 square meters will be obligated to accept these containers from consumers under the deposit system. However, smaller shops will have the option to voluntarily participate in the system.

How will the system function?

In Poland, the management of the deposit system will involve operators—special entities representing various facets of the introduced system. Unlike the previously proposed centralized model, this approach aims to ensure non-profit management, avoiding potential risks associated with competitive rivalry.

Operators must be joint-stock companies whose shareholders exclusively include entrepreneurs placing products in beverage packaging on the market or organizations representing their interests. In cases where multiple deposit systems exist, operators must collaborate to establish rules for deposit settlements and packaging replacement. Furthermore, operators are obligated to cooperate with any entrepreneur seeking to join their deposit system.

Entities introducing products in beverage packaging, such as beverage producers or retail chains, will bear the costs of various deposit system aspects, including packaging collection, transport, documentation, and settlements. Establishing such a representative entity poses both financial and organizational challenges, particularly given the limited time for entrepreneurs to prepare for these significant changes.

The regulations do not prescribe a specific model for packaging collection, granting companies and organizations engaged in this activity the freedom to choose their approach. Consequently, different operators may adopt varying packaging collection methods tailored to their preferences or market conditions.

The deposit system will operate on a “receiptless” basis, meaning consumers won’t need proof of purchase to return packaging. This approach allows anyone to return packaging at any collection point, irrespective of where or when it was purchased.

Selected responsibilities of the packer

The new regulations present both challenges and opportunities for enterprises that are adaptable and responsive to the evolving regulatory landscape and the growing ecological consciousness among consumers:

1. Packaging Collection Obligation and Minimum Levels: Companies must ensure compliance with minimum packaging collection levels mandated by law to avoid incurring product fees for uncollected packaging. This obligation can incentivize a more sustainable approach to packaging and waste reduction.
2. Cooperation with Operators: Establishing collaboration with operators responsible for collecting returned packaging offers opportunities for partnerships with professional waste management companies.
3. Changes in Packaging and Labeling: Adapting production processes and packaging to meet new legal requirements is essential.
4. Introduction of IT System Changes: Adjusting IT systems to support new processes related to the deposit system is necessary.
5. Management of Operator Relationships: Managing logistics, deposit settlements, store fees, producer fees, and reporting will require professional management, potentially creating opportunities for specialists in these areas.
6. Financial Challenges: Businesses will need to adapt to the additional costs associated with the deposit system, necessitating financial flexibility and planning.
7. Packaging Collection Data Analysis: Analyzing packaging collection data can provide insights into market trends and consumer preferences, informing business strategies.
8. Adapting Business Strategy: Participation in a deposit system can unlock new business opportunities, such as enhancing environmental awareness, improving corporate image, and developing sustainable strategies.

Moreover, manufacturers, importers, and brand owners will be obligated to collect a certain percentage of packaging entering the market in the coming years:

• By 2025: At least 77% of packaging must be collected.
• By 2026: This increases to 81% for selective collection.
• By 2027: The minimum collection level rises to 84%.
• By 2028: It further increases to 87%.
• From 2029 onwards: Entrepreneurs must collect at least 90% of packaging entering the market annually.

What does this mean for the industry?

The timeline for launching the deposit system in Poland on January 1, 2025, poses a significant challenge for entrepreneurs, given the relatively short preparatory period of 15 months. Unlike in other countries where similar systems took several years to implement, companies in Poland must quickly and efficiently adapt to the new regulations to avoid potential consequences.

For businesses in the food industry, particularly beverage producers and sellers, implementing an effective deposit system will be a major challenge. They bear the responsibility of laying the groundwork and organizing this new system in the coming months. This includes adapting their logistics and infrastructure to meet the new requirements. It’s crucial to note that improper implementation may lead to significant penalties, with potential fines of up to PLN 1 million.

The introduction of the deposit system represents a profound revolution for both beverage producers and retail stores, necessitating adjustments to their operations. Beyond economic changes, these adjustments also pose new logistic challenges that must be addressed.

Additionally, the Act imposes additional obligations on all participants of the deposit system. Hence, it’s imperative for entrepreneurs to commence the process of understanding these regulations early and adequately prepare for the impending changes. Many may require support in adapting to these new requirements and navigating potential complications in the future.

An opportunity or another unnecessary obligation?

The deposit system holds significant potential to enhance recycling efficiency in Poland and bolster environmental protection, mirroring successes seen in other European Union countries. Moreover, it presents an opportunity for participants to gain a competitive edge and generate additional income.

However, adapting enterprises, supply chains, and consumer behaviors to the new regulations demands time, commitment, and effective implementation strategies. The tight deadline imposed by the amendment underscores the urgency of this process. Experience from countries with similar systems highlights the importance of deploying appropriate IT tools, technological solutions, optimized business processes, effective communication, and collaborative partnerships throughout the supply chain to ensure successful implementation.

Therefore, it is advisable for companies to initiate experimental programs aimed at understanding the potential benefits of participating in the deposit system and testing mechanisms to comply with the new regulations. These proactive steps will better prepare businesses for the upcoming changes and maximize the potential advantages of the deposit system.

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