MOL Hungarian Oil and Gas Company

…1 MOL Group’s position on the Commission proposal for a regulation on packaging and packaging waste MOL Group is committed to helping the EU in reaching its circular economy objectives and is transforming to adapt to a circular and low-carbon world. We welcome the Commission proposal for a Packaging and Packaging Waste Regulation (PPWR) as it has the potential to establish a well-functioning market for secondary raw materials through fully harmonised rules on packaging while tackling negative impacts on environment and health from packaging and packaging waste. Transition to a more circular economy requires significant investments, and the PPWR can ensure regulatory certainty and increased incentives for investments in innovative solutions. The PPWR could also enable the contribution of the packaging sector to the EU’s climate neutrality goal, by setting up a framework based on the full…

…our key points related to the proposed regulation that we believe will be crucial to achieve these objectives. 1. The exact rules and methodologies on defining recyclability and recycled content in plastic packaging must be elaborated as soon as possible (Art 6, 7) 2. Recyclability rules should be defined in a way not to exclude innovative technologies (Art 6) 3. Labelling on material composition would create unnecessary confusion for consumers (Art 11) 4. We do not support restrictions and bans without the full assessment of alternative packaging materials (Art 22) 5. The full life-cycle environmental impact of the re-use targets should be clarified, including CO2 emissions, water consumption, air pollution (Art 26) 6. Proposed rules for return and collection systems and deposit and return systems (DRS) should take into account creating efficiency and improving performance (Art 43-44.

…and deposit and return systems (DRS) should take into account creating efficiency and improving performance (Art 43-44. and Annex X.) Legal basis – internal market We welcome that Article 114 of the Treaty on the Functioning of the European Union (TFEU) is and remains the legal basis of the regulation. This Article allows the EU to harmonise rules and administrative measures across Member States and allows harmonised application of rules. Article 5 – requirements for substances in packaging – should only relate to circularity We welcome the fact that the proposal does not aim to restrict substances due to chemical safety beyond the existing restriction on the concentration level of lead, cadmium, mercury and hexavalent chromium. The PPWR is indeed not the appropriate measure for regulating substances due to chemical safety.

…hexavalent chromium. The PPWR is indeed not the appropriate measure for regulating substances due to chemical safety. These are already addressed in REACH, and in other legislation which complements REACH, such as food contact materials (FCM) legislation. The concept of ‘substances of concern’ needs to be considered only in the context of circularity i.e. recycling and reusability. This means that a substance that may be of concern in a particular product category (e.g. because there is potential exposure or release during recycling) may not be of concern in another product category or in another recycling technology. In addition, recycling technologies evolve over time. The same is applicable for packaging and packaging materials. Ref.

…addition, recycling technologies evolve over time. The same is applicable for packaging and packaging materials. Ref. Ares(2023)1161480 - 17/02/2023 2 Article 6 – all packaging to be recyclable – rules to be published in time before obligations; need to remain open to innovative technologies We support a focus on design for recycling (D4R) as a way to ensure that all packaging is recyclable by 2030. However, the Commission should have a set deadline (by January 2026 the latest) to develop the delegated acts referred to in Article 6 paragraph 4, including the preferred design methods, to ensure sufficient time for the packaging industry to adopt the changes.

…4, including the preferred design methods, to ensure sufficient time for the packaging industry to adopt the changes. Moreover, industry D4R guidelines, such as the ones initiated by the Circular Plastics Alliance and currently being elaborated by CEN (new Working group 10 at CEN TC 261) should be revised and approved with priority to avoid duplicating efforts. In terms of the recyclability at scale requirement, we are concerned that a narrow framework would limit the development of innovative materials and recycling processes, such as chemical recycling. The definition (in Article 3) of ‘recycled at scale’ already includes a 75% EU coverage requirement, which is a very ambitious target to achieve for new technologies.

…already includes a 75% EU coverage requirement, which is a very ambitious target to achieve for new technologies. We believe such threshold should not be set in a definition, when the specific methodologies for packaging types to assess if those are recyclable at scale, referred to in Article 6 paragraph 6, are yet to be published. Rather than setting a threshold in the definitions, only the upcoming methodologies for each packaging type should set – if applicable – infrastructure related requirements. Even in those methodologies, the infrastructure related requirements should not be set as an EU-wide coverage requirement, but the regional realities of collection and recycling should be taken into account to allow some flexibility for new technologies.

…realities of collection and recycling should be taken into account to allow some flexibility for new technologies. In addition, producers should have the opportunity to organise the at scale collection and recycling of their specific packaging types on their own cost or through a Producer Responsibility Organisation (PRO), and keep those packages on the market as long as they can prove at scale recycling in the specific collection and recycling scheme they develop. Moreover, similarly to the D4R delegated acts, the Commission should have a deadline (January 2030 the latest) to develop the methodologies to assess if packaging is recyclable at scale otherwise, the delay of such methodologies could create significant uncertainty on the market.

…is recyclable at scale otherwise, the delay of such methodologies could create significant uncertainty on the market. In terms of the modulation of the financial contributions to be paid by producers to comply with their extended producer responsibility obligations, Paragraph 11 states that these shall be modulated on the basis of the recyclability performance grade, and for plastic packaging also in accordance with the Article 7(6) based on the percentage of recycled content used. For plastic packaging, a prioritization should be set regarding these two criteria, otherwise there is a risk of having lower EPR fees for plastic packaging with recycled content, even if they are not recyclable.

…there is a risk of having lower EPR fees for plastic packaging with recycled content, even if they are not recyclable. In addition, the eco-modulated fee structure should not create an uneven playing field for those applications where the uptake of recycled content is not technically feasible and therefore not even mandatory based on the proposal (e.g. pharmaceutical immediate packaging). Article 7 – Minimum recycled content in plastic packaging – calculation methodology needed as soon as possible The chemical industry is now going through the circular transition and is currently investing in significant chemical recycling capabilities.

…is now going through the circular transition and is currently investing in significant chemical recycling capabilities. Setting the implementing act on establishing the methodology for the calculation and verification of the percentage of recycled content, including how chemically recycled materials will be accounted for, only by 31 December 2026, is too far in the future and unnecessarily prolongs legal uncertainty. For boosting the circular economy it is important to have a supporting legal framework – including a robust and transparent mass balance chain of custody system, creating a level playing field for all technologies – clarified as soon as possible (by 2025 the latest), as major investment decisions depend on having this legal certainty.

…as soon as possible (by 2025 the latest), as major investment decisions depend on having this legal certainty. The deadline for the Commission should also be set earlier 3 because even with a deadline set, delays in publishing those acts are frequent (e.g. for the Single-use Plastics Directive, the methodology for the calculation and verification of the percentage of recycled content has been delayed for more than a year), which can further increase investment uncertainty. Regarding the level of the targets, we miss a detailed feasibility and impact assessment of the 2040 targets (e.g. is it possible to reach 50% recycled content in food packaging by 2040 so that no hazardous substances migrate from the packaging into the food; can the 65% recycled content ratio be achieved so that the material can be recycled several times without any strong degradation or loss of quality).

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…1 MOL Group’s position on the review of the requirements for packaging and other measures to prevent packaging waste MOL Group is committed to helping the EU in reaching its circular economy objectives and is transforming to adapt to a circular and low-carbon world. MOL Group, being amongst the top ten polymer producers in Europe and the biggest in Central Europe, believes that plastics and in particular plastic packaging, deliver significant benefits to the economy. By reducing packaging weight and reducing food waste, it also contributes to reducing carbon emissions. On the other hand, the benefits can only be maintained if the challenges with plastic waste are solved by moving to a circular model. Transition to a more circular economy requires significant investments, and EU packaging and packaging waste rules can ensure regulatory certainty and increased incentives for investments…

…key points related to the expert stakeholder consultation that we believe will be crucial to achieve these objectives. 1. EU packaging rules should remain open to innovative recycling technologies Given that packaging is the biggest source of plastic waste in Europe, accounting for about 60% of post- consumer plastic waste, we must find ways for this waste to be recycled and not to end up in landfills, while also minimising incineration. Despite good progress in the field of waste recycling in recent years, there are several obstacles to its further development. One of the areas where the EU needs drastically new methods and innovative solutions to achieve the ambitious targets set out in the European Green Deal and the new Circular Economy Action Plan is recycling technologies.

…targets set out in the European Green Deal and the new Circular Economy Action Plan is recycling technologies. MOL Group is exploring already established recycling opportunities, as well as looking for innovative solutions that could be part of the circular transformation. Such new technologies can bring a solution for difficult-to-recycle packaging, by handling complex materials such as multilayer composite packaging, and therefore extend the life cycle of products that would today lose their value after just one use and end up in landfill or incinerated. We believe that EU packaging rules should avoid solely focusing on today’s standard recycling processes when defining ‘recyclable packaging’ or setting ‘design-for-recyclability’ approaches, and should remain open to all innovative recycling technologies.

…or setting ‘design-for-recyclability’ approaches, and should remain open to all innovative recycling technologies. A narrow framework restricts innovation and therefore limits the development of new plastic recycling options and routes such as chemical recycling or dissolution (solvent-based) recycling. Some of these innovative recycling technologies already exist at scale such as dissolution recycling. Increasing capacities will be available by 2025 and grow further until 2030. By keeping these technologies in mind when defining ‘recyclability’ of packaging, the EU would support investments in different recycling technologies that can together deliver the ambitious recycling and recycled content targets. Ref. Ares(2021)145454 - 07/01/2021 2

…that can together deliver the ambitious recycling and recycled content targets. Ref. Ares(2021)145454 - 07/01/2021 2 2. Innovative technologies can ensure high-quality recycled content in packaging When assessing the impact and feasibility of recycled content targets, MOL Group is of the opinion that particular attention is needed on food safety. Innovative recycling technologies, including chemical recycling and dissolution recycling can deliver higher purity, virgin-like recyclates. Such recycled plastics can therefore be used in applications with stringent quality and safety standards including highly sensitive areas like food or medial applications. To ensure cost efficient and transparent compliance with future targets for recycled content, the EU should aim to standardise methodologies for identifying recycled content. A robust and transparent mass balance chain of custody system…

…transparent mass balance chain of custody system can enable the acceleration of the circular economy at scale today. 3. EU rules need to maintain a holistic approach for packaging waste reduction, keeping in mind any unintended consequences of restrictions and bans EU rules should strive for a holistic assessment of the sustainability of packaging, making sure that the functionality of the packaging is retained and that other parameters (such as the protection of packaged products and the resources required for packaging production) are not adversely affected. As an example, initiatives to restrict or ban certain types of packaging could create unintended consequences, and packaging rules should rather establish reward systems such as deposit return schemes that promote recycling.

…and packaging rules should rather establish reward systems such as deposit return schemes that promote recycling. Such an approach could better support the Directive’s goal to tackle negative impacts on environment and health from packaging and packaging waste, by replacing more and more fossil-based feedstock in plastic production and giving value to waste that would otherwise end up incinerated, in landfills, or in the environment. Secondly, we do not support requirements mandating the reduction in the use of polymers; today single layer packaging cannot provide the same benefits for certain applications as multi-layer, and innovative recycling technologies can valorise mixed plastics waste and separate layers at scale today. Finally, proposals must not cause setbacks in the field of product safety or health protection.

…layers at scale today. Finally, proposals must not cause setbacks in the field of product safety or health protection. We propose careful feasibility assessment of reduced food packaging, and a continued focus on food safety.

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