Guest article: E-commerce and plastic packaging regulations | SDG Knowledge Center

Rashmi Jose, Senior Policy Advisor, International Institute for Sustainable Development (IISD)

This article is part of a series examining e-commerce and its role in contributing to the plastic packaging waste problem. The first article highlighted that the rapid growth of global e-commerce and the high use of plastic packaging in transport make it one of the fastest growing waste streams, contributing to the problem of plastic pollution. In this article, we review some of the regulatory solutions being introduced by governments at the national level to address the growing problem.

Evolving regulations in the face of a changing landscape

Over the past two decades, governments have increasingly used policy instruments to combat plastic pollution. The most popular approach is to regulate plastic bags. According to the United Nations Environment Program (UNEP), by 2018, 127 countries had implemented national laws, from bans to taxes, aimed at reducing the production, use or trade of single-use plastic bags.

However, these regulations are primarily aimed at brick-and-mortar retailers who provide plastic shopping bags at the checkout. E-commerce, with its various packaging formats, remains largely unchanged. As e-commerce evolves, plastic bag policy, currently the dominant instrument, needs to be updated or expanded to take into account the changing retail landscape.

In response, some countries are taking initial steps to adapt their policies to reduce the use of plastics in e-commerce packaging. Below are some of their approaches.

From bans to reduction actions

In addition to measures targeting single-use plastic bags, countries are increasingly starting to experiment with regulations covering a wider range of single-use plastic items. A 2018 UNEP study identified 27 countries that had adopted policies to increase the use of single-use plastics, introducing measures to restrict specific single-use products or certain types of plastic materials. Examples of target products include service or table linens, while examples of target plastic materials include polystyrene and PVC.

Measures focusing on banning certain types of single-use plastic products are likely to impact e-commerce in the same way as they would apply to brick-and-mortar retailers, by preventing all retailers from selling or distributing such products. However, materials regulations may also impact whether certain plastics will be used as materials in various types of packaging, including packaging used for transport. For example, some countries have introduced bans on PVC, the world’s third most widely produced synthetic plastic polymer, which is widely used in packaging. The material has faced heavy criticism due to its difficulty in recycling and relatively more harmful effects on human health. Spain has introduced a tax on single-use plastic packaging, and the Republic of Korea has completely banned the use of PVC plastics in packaging.

There are no examples of countries that have introduced a complete ban on all types of single-use plastic materials for e-commerce packaging. The reluctance to implement more restrictive methods may result from the need to balance unintended negative consequences for the environment. For example, some concerns have been expressed that a ban on the use of plastics in transport packaging could result in a shift to alternative materials that could produce higher emissions or create greater waste or recycling challenges.

Rather than banning the use of plastics in e-commerce packaging, countries seem more willing to explore the possibility of encouraging the reduction of the use of plastics in packaging. The jurisdiction leading the way in considering more comprehensive policies to regulate the use of plastics in packaging is currently the EU. Below we set out some of the regulations being considered under the proposed Packaging and Packaging Waste Regulation (PPWR), indicating how certain features are intended to apply to e-commerce operators.

Clear space regulations: Minimization efforts are important in e-commerce, which can be susceptible to over-packaging due to inefficient packaging practices. Goods may be transported in boxes larger than necessary, leaving much of the packaging empty. The empty space can then be filled with additional filling material to prevent potential damage during shipping. Fillings made of plastic, such as airbags, bubble wrap or plastic pellets, are often the preferred filling material due to their low cost and lightness.

To curb the trend of packaging waste, PPWR is considering introducing a “void space regulation” that would require e-commerce deliveries to reduce void space to a maximum of 40%. It also limits the use of filler material by clarifying that the use of such material will be counted as empty space. To comply with such regulation, e-commerce operators will likely need to invest in new technologies that facilitate more efficient boxing practices.

Promoting recycling: Another approach to reduction is to reduce the use of virgin plastics in packaging by requiring packaging to meet certain recycled content targets. For example, PPWR requires that by 2030, plastics used in e-commerce packaging must consist of at least 35% recycled plastic. By 2040, this target will increase to 65%, which will result in most packaging being made from recycled plastic rather than virgin plastic.

In addition to increasing recycled content, the EU’s PPWR requires “design for recycling” efforts. This makes the packaging suitable for recycling or responsible disposal. The PPWR also includes new, harmonized labeling requirements to facilitate better waste disposal, recycling and reuse.

Australia and Canada have also announced that they plan to restructure their packaging policies and that recycled materials or recycling for design will be important elements in the new framework.

Promoting reuse: One reason why prohibitive plastic bag measures are useful in stationary retail is that they prompt important behavioral changes among consumers, encouraging them to switch from using new shopping bags to reusing existing bags. Promoting similar behavioral changes in e-commerce is more challenging due to limited consumer involvement in the physical delivery process.

Importantly, despite such challenges, the EU’s PPWR directive sets targets for promoting reusable packaging in e-commerce deliveries. By 2030, 10% of deliveries are expected to be in reusable packaging, rising to 50% by 2040. Moreover, by 2030, 90% of large household appliances will have to be delivered in reusable packaging.

Reuse targets will likely require significant operational changes for e-commerce retailers, including the implementation of reverse logistics or closed-loop supply chains to facilitate returns of reusable packaging. It is reasonable to assume that these systems will again require technological investment and will likely be more difficult to implement and coordinate across borders.

Extended Producer Responsibility (EPR): An increasingly popular measure in some countries is EPR, under which the manufacturer is expected to take greater financial or operational responsibility for the waste management or circular economy of plastic products after use by consumers. For example, Germany has introduced an additional fee on producers of single-use plastics, with the revenues generated to cover disposal costs. Importantly, the regulation also increases the responsibility of e-commerce as third parties to ensure that they only supply products from officially registered producers and comply with the regulation. Third parties offering to sell single-use plastic through unregistered producers will be subject to potential penalties.

Learning from countries’ experiences

Regulatory efforts by individual countries to reduce the use of plastics in e-commerce retail packaging are currently still quite limited. Only a few countries are in the early stages of experimenting with different approaches. The above list, although incomplete, is useful for illustrating emerging approaches.

The creation and experimentation of such regulations means greater potential for the global community to learn from the experiences of a select few countries implementing these regulations. International platforms facilitating the exchange of experiences and best practices could be valuable. This may be an important topic for World Trade Organization (WTO) members participating in the Dialogue on Plastic Pollution and Trade in Environmentally Sustainable Plastics (DPP), or may be addressed at a multilateral level. For example, the Commission on Technical Barriers to Trade has already held a thematic session on regulatory cooperation on plastics regulation.

Here, WTO members can learn from the experiences of pilot countries implementing plastic pollution regulations in e-commerce. Such information exchange can help countries understand the challenges of adopting such regulations and learn from countries’ experiences in offsetting unintended negative environmental externalities.

In addition to better understanding environmental trade-offs, discussions can also help understand the economic and social consequences of such regulations. As highlighted above, compliance with some of the proposed regulations will likely require technological upgrades and significant changes to supply chain operations. These updates are likely to be more challenging for resource-constrained operators, especially those in poorer developing economies. At worst, some regulations could undermine poorer countries’ ability to access and benefit from cross-border digital economy opportunities, and poorer countries already need significant help.