Plastics tax in Germany - the Single-Use Plastic Fund Act

Plastics tax in Germany - the Single-Use Plastic Fund Act

Germany has followed suit. After countries such as Spain and the UK have already introduced a plastic tax, the German legislator has also passed a „plastic tax“ with the Single-Use Plastic Fund Act of 11 May 2023, or EWKFondsG for short (Federal Law Gazette I 2023, No. 124, dated 15 May 2023). The plastic tax will be introduced on 1 January 2024 and is payable for the first time in 2025. Even though there is still more than a year and a quarter until the first levy notice is issued, it is advisable for affected companies to familiarise themselves with the new levy on single-use plastic products (EWK products) in order to complete the necessary preparations in good time. By the beginning of 2024, companies should clarify the extent to which they are subject to the levy administered by the Federal Environment Agency in order to create the conditions for fulfilling future reporting obligations if necessary.

1. Background under EU law

With the „EU Green Deal“ of 11 December 2019, the European Commission developed a package of measures to make the economy and society climate-neutral and sustainable by 2050. In addition to the most prominent components, such as the reduction of greenhouse gas emissions and the decarbonisation of the energy sector, the package, which covers all policy areas, also includes the promotion of the circular economy. The latter means, on the one hand, creating incentives for climate-neutral and circular pollution-free products and, on the other hand, providing for significant compensation measures for environmentally harmful disposable products. To this end, the EU plastic tax was introduced in the relationship between the EU and the Member States by the EU/Euratom Council Decision of 14 December 2020. The EU plastic tax has come back into focus since the current German government‘s plans to finance the budget for 2024 became known. In addition, with Directive 2019/904 of 5 June 2019, the EU created the framework for the implementation of measures to reduce the impact of certain plastic products on the environment in the sense of „extended producer responsibility“ (EPR) by the member states. Germany is implementing this directive with the EWKFondsG.

2. EWKFondsG - Objective, scope, reporting obligations, classification findings, levy rates, sanctions

The aim of the EWKFondsG is to prevent and minimise the impact of certain EWK products on the environment and human health and to promote innovative and sustainable business models, products and materials (Section 1 EWKFondsG). In order to achieve this, the market behaviour of the obligated parties is regulated. To this end, the special levy flows into a fund to be set up, from which the public waste management authorities (including entitled parties) will in future be reimbursed for costs incurred in connection with the disposal and reduction of certain EWC products (Sections 15 et seq. EWKFondsG). The reimbursement includes collection, cleaning, sensitisation, data collection and transmission costs as well as administrative costs (incurred by the UBA).

The scope of application of the EWKFondsG covers the first-time provision of certain EWK products on the German market. These are products that consist entirely or partially of plastic, i.e. artificially produced polymers (in accordance with Art. 3 No. 5 of the REACH Regulation). For the purpose of determining which polymers are contained in the respective packaging material, UBA provided the so-called „Annex Material List“ in form form on 19 December 2023. Annex 1 to the EWKFondsG lists the EWK product types concerned in detail. The focus here is on EWC products in the food sector, e.g. boxes with and without lids for food, film packaging with food or beverage containers up to three litres or beverage cups. Lightweight plastic carrier bags as well as certain wet wipes, balloons, filters for tobacco products and - from 2026 - fireworks complete the list.

The personal scope of application is defined by the term „manufacturer“. In addition to the actual wording, all market participants (natural persons, legal entities and partnerships with legal capacity) who make available or sell the EEE products concerned on the German market for the first time on a commercial basis, whether in return for payment or free of charge, are covered. This therefore also includes fillers, sellers and importers, both market participants established in Germany and those who are not. „Producers“ in this sense should register with the Federal Environment Agency in the course of 2024, which is to be done via the DIVID IT platform to be set up. It was previously planned that the DIVID platform would be made available by the UBA from 1 January 2024. However, according to the current timetable, the platform will only be gradually put into operation from 1 April 2024 (see below).  With regard to the registration date, a distinction is made according to when the respective „manufacturer“ started its activities. „Producers“ who were already active before 1 January 2024 should register by 31 December 2024. For manufacturers who commence their activities after the DIVID platform is available for registrations, the legal requirement to register in advance applies without restriction. Finally, for manufacturers who commence their activities after 1 January 2024, the aforementioned legal requirement also applies in principle as long as the DIVID platform is not yet available. However, non-registration will have no consequences as long as the DIVID platform is not yet available and registration is not possible. However, it should be noted that later registration does not mean that the obligation to pay the levy only applies from the time of registration. Manufacturers registered at a later date should also submit declarations for the entire year 2024 and are obliged to pay the resulting levies. In addition, the required registration of authorised parties will also be delayed. However, it will be ensured that there is sufficient time for the necessary registration before the first performance notification can be submitted (at the earliest) from 1 April 2025. In addition, operators of electronic marketplaces and certain fulfilment service providers through which or by which EWK products are made available on the German market for the first time are affected.

The „manufacturers“ should notify the Federal Environment Agency by 15 May each year. The content of the notification is the mass of EWK products placed on the German market for the first time by the respective „producer“ in the previous calendar year (Section 11 EWKFondsG). An exception to the reporting obligation applies to „manufacturers“ who made less than 100 kg of the products concerned or exclusively deposit bottles available on the German market for the first time in the previous year. The notification should be made for the first time for 2024. On the basis of the notification, which is broken down by type and mass of the EWK products, the levy is determined by notice. A specific levy rate is applied to the declared mass of the respective EWK product. The levy rates are announced by ordinance, regularly reviewed and adjusted if necessary (see below). If necessary, appeals can be lodged against the decision on the levy, but these have no suspensive effect. The due date of the levy, one month after receipt of the notice, is therefore not suspended.

Entitled parties within the meaning of the EWKFondsG are public waste management organisations (e.g. cities and municipalities) and other legal entities under public law that can report their collection or cleaning measures and other reimbursable services to the UBA. The funds paid in are distributed pro rata to the beneficiaries. Processing of the required data reports will begin on 1 January 2025 and, like registration, will take place via the DIVID platform.

The „DIVID“ single-use plastics platform is being prepared by the UBA. DIVID enables the UBA to digitally process all registrations and payments from around 56,000 taxpayers and to make cost reimbursements to around 6,400 claimants each year. The platform is the central instrument for fund-related communication between external users and the UBA as well as the associated internal management processes. From 1 January to 1 April 2024, the UBA will provide the stakeholders concerned with a static image of DIVID on the website, which will enable classification requests (see below). According to the current schedule, the (dynamic) form of DIVID will be gradually put into operation from 1 April 2024. Domestic manufacturers will therefore only be able to register from 1 April 2024. The start date for the registration of manufacturers without a branch in Germany is not yet known. In addition, the UBA will use the platform to coordinate the administration and processing of the levies to be paid by companies into the Single-Use Plastics Fund. Finally, the platform will be used to organise the distribution of funds to the cities or municipalities.
From 1 January 2024, an application can be made to the Federal Environment Agency to determine the classification of a product as an EWK product or the „manufacturer“ status of a market participant via the static mapping of DIVID (Section 22 EWKFondsG). The possibility of submitting applications for categorisation is due to the fact that the aforementioned categorisations are not always clear and are complex.  

The levy rates were adopted by the German Bundestag on 28 September 2023 and published in the Federal Law Gazette (Federal Law Gazette I 2023, No. 274) in the form of the Ordinance to the EWKFondsG of 11 October 2023 (EWKFondsV). This means that the following levies will apply per kilogramme of EWK products placed on the market in future:

1. food containers € 0.177
2. bags and foil packaging € 0.876
3. non-deposited beverage containers € 0.181
4. beverage containers with deposit € 0,001
5. beverage cups € 1.236
6. lightweight plastic carrier bags € 3.801
7. wet wipes € 0.061
8. balloons € 4.340
9. tobacco products with filters and filters for tobacco products € 8,972

The specific burden for the manufacturers concerned results from the above-mentioned levy rates and the respective quantity made available on the German market.
Depending on the type of offence, sanctions are provided for „producers“ as well as operators of electronic marketplaces and fulfilment service providers (Section 26 EWKFondsG). For example, the Federal Environment Agency is authorised to make an assessment in the event of missing or insufficient annual reporting. If payment of the levy due is more than three days late, a one per cent late payment surcharge will be imposed above a threshold of sufficiency. Intentional or negligent breaches of registration or reporting obligations constitute administrative offences punishable by a fine of up to EUR 100,000.

3. Practical advice

Market participants who are affected, or at least cannot rule out being affected, should deal with the EWKFondsG immediately.

It should first be clarified whether the market participants and their products fall within the material and personal scope of application of the EWKFondsG. In supply chains, for example, this involves the question of who (still) manufactures or trades preliminary products and who ultimately makes the first supply of EWK products subject to the levy obligation on the German market. If necessary, as soon as this is technically possible, registration in the Federal Environment Agency‘s register should be initiated and categorisation issues clarified in advance through the application process. At the same time, the internal structures and processes (IT, CMS) should also be reviewed and adapted to ensure that the requirements of the EWKFondsG are met.

Dr. Mario Wagner, Certified Tax Advisor, Senior Manager, Indirect Tax,, +49 40 30293 – 394 or +49 171 5386140 // Plastic Tax, EWKFondsG