The question on everybody’s lips: should we reopen the PPWR? A coalition of financial investors recently said no.
Costas Papaikonomou, co-founder of Una Terra, details their view on why the application date should remain unchanged – from certainty around legal and investment requirements to anticipated benefits for European competitiveness – and why last-minute changes could send “exactly the wrong signal”.
It’d be useful to start with an overview of this recent announcement. Could you give us a summary of the key points you and the other signatories are making, and talk us through some of the headline numbers?
I believe the numbers come from the Commission’s own impact assessment, so not something we can comment on in much detail from Una Terra’s POV. But the core message is: investors need regulatory certainty.
As a cohort of investment professionals, we’ve invested a lot of money into the technologies needed to make the clean packaging transition happen. Often against the investment tide (e.g. with SaaS, Ukraine and A.I. as opposing capital magnets).
If Europe starts moving the goalposts after those investments have been made, it changes not only the returns, but also the survival chances of some of these companies now waiting to take orders.
What is your personal view on the PPWR as it currently stands? What do you think are its main strengths and weaknesses?
No regulation is perfect, and I’m sure plenty can still be improved during implementation. But we find the direction absolutely the right one.
What strikes me is that some of the voices now asking for delays were from the same companies making ambitious packaging commitments back in 2018 and 2019 (the “Green Pledges”). Investors like us took those commitments seriously and backed startups and scale-ups building the solutions. Many of those solutions now exist, so it’s important for a regulatory confirmation to push adoption.
Perhaps a “hot take” to add here: packaging development over the past 50-80 years has been spectacularly lazy. Crudely put: when confronted with a packaging design question, R&D teams would skip straight to foolproof solutions, e.g. polyethylene or some laminate, and forget about it.
If anything, the new technologies coming down the line now show that reducing material waste and improving recyclability is a high-tech skill, requiring proper optimization on a case-by-case basis. This is harder, but ultimately more rewarding.
We often hear about the potential negative financial and investment-related impacts of the PPWR, so could you talk us through some of the potential economic benefits the regulation might bring about?
When companies know where the market is heading, they invest to keep up or get ahead. PPWR isn’t just about reducing waste; it’s resetting the business landscape in advanced materials, recycling and manufacturing. That’s good for European competitiveness as well as sustainability. Yes, some established ‘old skool’ laggards will see their revenues harmed.
Most of the arguments in favour of postponing or amending the PPWR relate to perceived uncertainty about the stipulations of the regulation and how they might be enforced. How would you respond to these concerns?
Those concerns are mostly legitimate. But that’s very different from delaying the whole regulation, no?
You argue that a postponement of the PPWR could reduce investment flows into the EU. Please could you unpack this?
This is simple reality. Europe agreed a long-term direction, and capital started flowing into the companies building for that future.
If the rules are now reopened because a number of industry giants realize implementation isn’t easy and might harm margins, investors will begin asking what other policies will change at the finishing line (think of Nitrogen directives, Agriculture, Food Safety, etc). That increases risk, makes it harder to raise capital, and ultimately means less investment. In other words, changing course now sends exactly the wrong signal.
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