SAP Recycling and Plastic Tax

Pain Points

Companies face increasing pressure from new EPR obligations, plastic taxes, and packaging regulations. Poor data quality, manual Excel-based processes, and unclear reporting rules create high effort, errors, and compliance risks. At the same time, there is little transparency on costs and optimization potential, while regulations keep changing and systems remain disconnected.

Extended Producer Responsibility

As part of the European Green Deal, the circular economy is one of the European Union’s key objectives. A central element of this approach is the management of waste from packaging, electronics and batteries. Within the EU, this waste is handled under the principle of Extended Producer Responsibility (EPR), meaning that the party placing a product on the EU market (e. g. manufacturer, importer, etc.) is responsible for ensuring its proper collection, recycling, and disposal at the end of life.

The respective EU directives and regulations are transposed into national law in each member state, leading to a heterogeneous implementation across the EU. The following EU directives cover EPR for packaging, batteries and electrical and electronic waste (WEEE): 

• EU Waste Management Law 2008/98/EC:
  General framework of waste management and Extended Producer Responsibility (EPR).
• Packaging and Packaging Waste Directive (PPWD) 94/62/EC:
  Regulates packaging and packaging waste, set recycling targets, and defines packaging material fractions. Valid until 11 August 2026.
• Packaging and Packaging Waste Regulation (PPWR) (EU) 2025/40:
  Effective from 12 August 2026. Replaces the PPWD with significantly stricter recycling targets by 2030, e.g. mandatory use of recycled packaging materials.
• WEEE2 Directive 2012/19/EU:
  Replaced the original WEEE1 Directive an 15 February 2025; governs the disposal and categorization of electronic waste.
• Sustainability of Battery (waste) (EU) 2023/1542:
  Replaces Directive 2006/66/EC almost entirely from 18 August 2025 (remaining parts valid until 30 June 2027); governs the collection, treatment, and classification of batteries and accumulators.

Across the EU, EPR can generally be implemented in two ways:

1. Direct Producer Responsibility:
The producer organizes the recycling and collection of its own packaging across the Union. This approach involves significant costs and, in some countries, requires licenses that come with strict conditions

2. Delegated Responsibility via PROs:
The producer transfers this obligation to a Producer Responsibility Organization (PRO) in exchange for a financial contribution. A PRO is a private company, state-designated body, or a government agency. Producers are legally required to report the quantities of waste placed on the market to these PROs on a regular basis.

Plastic Tax

In addition to EPR, the EU introduced a Plastic Tax in 2020 under (EU, Euratom) 2020/2053 article 2, paragraph 1c, aiming to discourage the use of non-recycled plastic packaging. This tax is levied at the national level by the EU, but its cost pass-through to producers varies from country to country. Following this decision, countries like United Kingdom or Spain have implemented their own plastic taxes, requiring detailed reporting of plastic packaging quantities to authorities.

Solutions

The SAP component SAP Recycling Administration (SAP REA) and the new component SAP Responsible Design and Production (SAP RDP) can be utilized to implement the requirements of the Plastic Tax and the requirements of Reduce, Reuse, Recycle.

Advantages of SAP solutions

• Mapping of relevant master data - articles, packaging, fractions, single use plastic, recycled plastic, exceptions etc.
• Reuse of existing data (e.g., bill of material with packaging data)
• Ability to integrate data from third party systems and CSV files
• Tracking of relevant business transactions, i.e., production and import, exclusion export with integration to SAP sales, purchasing, materials management
• Compliance with legal reporting obligations
• Integration SAP SD pricing, integration SAP CO controlling (accruals) and FI finance (payables tax)
• Joint solution to meet Plastic Tax and legal requirements for disposal of packaging, electrical and electronic equipment
• Digitalization of sustainability
• Basis for the development of sustainable products
• Better transparency for customers and stakeholders