Timing could make or break the circular economy

Policymakers considering intervening in certain packaging markets for specific environmental considerations should liaise with local producers in order to establish optimal transition timelines. Too short a timeline could instantly bankrupt certain companies, but the right transition would enable them to re-invest and become pioneers in the sustainable future we are all after.

Industrial packaging manufacturing is a capital-intensive business. Manufacturing plants require investments that can go up to tens, even hundreds of millions of euros. These costs are typically absorbed by packaging manufacturing businesses over 10 to 15 years. It often takes several years before they can afford to invest in new machinery again.

Some companies may be better positioned than others already today, but overall, many more investments will be needed in order to change production techniques in line with EU circular economy objectives. Machinery will have to be adapted or replaced in order to facilitate the production of different forms of packaging, whether it be using simpler material combinations to make the packaging more easily recyclable, or to completely change from one material to another, for example.

Companies follow market demand, and cost-efficiency is one of the main imperatives. Cost-efficiency most often also translates into resource efficiency. Some companies are naturally positioned to benefit from the EU’s impending circular economy legal requirements, but other high-performers will have to adapt. With the right approach and timing, consumers, the economy and the environment – we will all benefit.

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