EU's Stricter Packaging Regulations Pose Challenges for Vietnamese Businesses

The European Union's (EU) newly implemented packaging regulations (PPWR) are presenting significant challenges for Vietnamese export businesses. Experts point out that the stringent requirements for the proportion of recycled materials in packaging used for products are exceeding the response capabilities of domestic companies. According to experts, the EU's PPWR is a comprehensive set of regulations designed to manage the entire lifecycle of all types of packaging, including plastic, wood, paper, and glass, from all sources. Its aim is to prevent and minimize the negative impacts of packaging waste on the environment and human health. A major hurdle in these regulations is the mandatory recycled content. The EU requires PET bottles and other plastic packaging to contain a minimum of 30% recycled plastic by 2030, progressing to 65% by 2040. These standards are particularly strict for food-grade packaging that comes into direct contact with food. The Vietnam Association of Seafood Exporters and Processors (VASEP) has also warned about this "green barrier." For the seafood industry, all packaging materials commonly used in exports, such as nylon bags, plastic trays, boxes, cartons, and plastic pallets, are subject to these regulations. Currently, domestic policies regarding packaging recycling rates in Vietnam are still under development. There is no mandatory requirement for recycled content in packaging, nor are there food-grade standards for domestically produced recycled packaging. Furthermore, the inspection infrastructure to verify recycling rates does not meet the EU's new requirements. At present, only the recycling rate of PE (nylon bags) can be tested, while testing systems for PET and other packaging materials are not ready. There are also significant limitations in the collection and sorting infrastructure, which forms the foundation of recycling. The current reliance on informal waste collectors reduces the quality of scrap materials. A representative from Suntory PepsiCo Vietnam noted that PET bottles can contain 40%-70% "impurities" depending on the batch, making food-grade recycling and bottle-to-bottle recycling difficult and increasing the cost of recycled materials compared to virgin plastics. To meet the stringent new standards and ensure continued exports to the European market, it is crucial to improve domestic collection and sorting capabilities. Additionally, food-grade standards for recycled PET (rPET) need to be rapidly established. VASEP advises businesses to closely monitor upcoming EU guidance, review their factory's packaging systems, and prepare documentation to demonstrate compliance with the new regulations. Analysts believe the PPWR will have a broad impact on Vietnamese enterprises and recommend that the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry (VCCI) establish a dedicated department to support this issue, similar to the support provided for the EU's Carbon Border Adjustment Mechanism (CBAM). Source: VnExpress