Update on the Single-Use Plastics Fund Act: "Plastic tax" in Germany came into force on 1 January 2024

Key Takeaways

The Single-Use Plastics Fund Act (EWKFondsG) officially came into force on 1 January 2024. Even though registration in the Federal Environment Agency portal will not be possible until April 2024, all the necessary data must be collected for 2024. This is due to the fact that the first annual report for 2024 must be submitted on 15 May 2025. Dr Björn Enders and the Germany indirect tax team will be happy to assist with any of the issues raised in this article.

If there are still uncertainties regarding the manufacturer status or the categorisation of various plastic products, we recommend having an assessment carried out by the Federal Environment Agency. We will be happy to assist you with an initial assessment and the completion of the application.

The Single-Use Plastics Fund Act

With the entry into force of the Single-Use Plastics Fund Act (EWKFondsG) on 1 January 2024, a type of "plastic tax" will also apply in Germany. From 1 January 2024, reporting obligations will apply to manufacturers of single-use plastics. The first annual report for 2024 must be submitted on 15 May 2025. In addition, both manufacturers and waste management companies that are entitled to compensation payments must register.

The EWKFondsG obliges manufacturers to contribute to the costs of their single-use plastics collected as waste in public areas. In return, public waste management organisations are relieved of costs through the Single-Use Plastic Fund. The background to this is the EU's 2019 Directive on single-use plastics and the EU Own Resources Decision of 2021. One of the sources of income under the Single-Use Plastics Directive in this context are national contributions, which are calculated on the basis of non-recycled plastic packaging waste. The overarching aim of the Single-Use Plastics Directive is to protect the environment. For every kilogram of non-recyclable plastic waste, each EU member state owes a levy of EUR0.80. In Germany, unlike other EU countries such as Spain or Portugal, this levy used to not be passed on directly to companies, but was paid from the federal budget. However, as this does not provide an incentive for companies to save on single-use plastic products, the EWKFondsG was passed on 11 May 2023. Under the EWKFondsG, manufacturers must pay levies on certain single-use plastic products that they have placed on the market. The term "manufacturer" is to be understood broadly in this context, meaning that operators of electronic marketplaces and fulfilment service providers are also included.

Detailed information on

• the term of the manufacturer,
• the single-use plastic products concerned,
• the amount of the levy and
• the beneficiary waste management companies

can be found in our publication on the Single-Use Plastics Fund Act.

Registration obligations on the DIVID platform

Manufacturers and beneficiary disposal companies are obliged to register with the Federal Environment Agency (Umweltbundesamt) for the purpose of processing payments into and out of the Single-Use Plastics Fund. A digital platform called DIVID is currently being set up at the Federal Environment Agency for this purpose. This is expected to be partially operational from 1 April 2024. Consequently, manufacturers with a branch in Germany will not be able to register until 1 April 2024. From this date, manufacturers without a branch in Germany or their authorised representatives will also be able to create an account with DIVID. It is not yet clear when other users, such as waste management companies, will be able to use DIVID.

Manufacturers who started their activities before 1 January 2024 must register by 31 December 2024. Immediate registration is only mandatory for manufacturers who have started their activities from 1 January 2024. Due to the current unavailability of the system, a lack of registration has no consequences at the moment. However, the registration should be carried out as soon as possible from 1 April, provided the platform is operational.

To summarise, it should be noted that a submission obligation for the 2024 declaration is legally binding and therefore exists regardless of the existence of a registration. Furthermore, the Federal Environment Agency is currently working on making it possible for beneficiary waste management companies to register before submitting the first performance report, ie 1 January 2025.

Checking the manufacturer's status and qualification as a single-use plastic product

The definition of manufacturer in Section 3 (3) EWKFondsG must be interpreted broadly. In addition to the actual producer, it also covers all market participants who make single-use plastic products available on the German market for the first time on a commercial basis, whether for a fee or free of charge, such as fillers, sellers or importers. Furthermore, traders not based in Germany who are active in distance selling are also covered. Operators of electronic marketplaces must ensure that companies that offer products on their platform or use fulfilment services are themselves included in the register of manufacturers.

In principle, companies must decide for themselves whether they are manufacturers within the meaning of the EWKFondsG. It is possible to carry out a free self-check on a website set up by the Federal Environment Agency. However, this only serves as a guide and is therefore not binding. A binding decision can be obtained by submitting an application for categorisation. Such an application for categorisation is subject to a fee. The fees depend on the individual processing time. The required form can also be downloaded from a website set up by the Federal Environment Agency. We will be happy to assist you with the form.

The Federal Environment Agency itself can also determine at its own discretion whether a company is to be categorised as a manufacturer within the meaning of the EWKFondsG.

From a material point of view, the EWKFondsG applies to all packaging listed in Annex 1 to the Act. This includes in particular:

• To Go food containers
• Bags and film packaging with food contents
• Non-deposit beverage containers
• Beverage containers with pallets
• Beverage cups
• Lightweight plastic carrier bags
• Wet wipes
• Balloons
• Tobacco products with filters and filters for tobacco products

To determine whether a specific product falls within the scope of the EWKFondsG or which product category it belongs to, a free, non-binding self-check can be carried out or a binding application can be submitted for a fee. A general ruling can also be issued to determine whether a product is a single-use plastic product and which product category it falls under. Such general rulings have not yet been issued. There is also the possibility that the Federal Environment Agency will issue administrative regulations that could provide more clarity for users. However, the Federal Environment Agency has not yet made use of this option.

Reporting obligations

Both manufacturers and beneficiaries must fulfil their reporting obligations for the previous year by 15 May of the following year. The first notification is due on 15 May 2025. Manufacturers' notifications must be checked and confirmed by a registered expert.

The beneficiary waste disposal companies should also report the services they have provided in order to benefit from cost reimbursement. The first payments are expected in the fourth quarter of 2025 based on the reports for 2024.

Single-use plastic fund

Manufacturers must pay a single-use plastic levy to the Single-Use Plastic Fund. The amount of the levy is based on the mass of the reported single-use plastic products multiplied by the levy rate specified in the Single-Use Plastics Ordinance. The following levy rates apply per kilogram at the time of publication:

• To Go food container: EUR0.177
• Bags and film packaging with food contents: EUR0.876
• Non-deposit beverage containers: EUR0.181
• Beverage containers with deposit: EUR0.001
• Beverage cup: EUR1.236
• Lightweight plastic carrier bags: EUR3.801
• Wet wipes: EUR0.061
• Balloons: EUR4.340
• Tobacco products with filters and filters for tobacco products: EUR8.972

A special points system is used for payments to the beneficiary waste management companies, which differentiates between the various services.

A total fund volume of EUR430 million per year is forecast.

Sanctions

The Federal Environment Agency has various sanctions at its disposal for companies that do not fulfil their obligations under the EWKFondsG. Fines of up to EUR100,000 or even a sales ban can be imposed.

For assistance with confirming your reporting obligations or queries about any of the issues raised within this article, please do get in touch with one of the authors from our Germany Tax team.