Does the PPWR apply to small businesses? Size thresholds and what “turnover” means
There is no general small-business exemption from the PPWR. Because Regulation (EU) 2025/40 is a regulation rather than a directive, its core packaging duties are the same in all 27 member states and apply to everyone who places packaging on the EU market, whatever their size. A one-person importer owes the same restricted-substance limits, recyclability, recycled-content, minimisation, labelling and declaration-of-conformity duties as a multinational.
A few narrow carve-outs exist for micro-enterprises, and they use the EU definition in Commission Recommendation 2003/361/EC. That test is measured on your whole global group — worldwide turnover, consolidated with parent and linked companies — not your EU sales and not your turnover in one country.
This is general information about Regulation (EU) 2025/40, not legal advice. Confirm anything you act on with qualified counsel or an accredited body.
The core duties have no size threshold
The substantive product obligations in the PPWR carry no turnover figure and no headcount cut-off. They attach to the packaging and to the role you play in placing it on the market, not to how big your business is. The duties that apply from day one include:
- Restricted substances — the limits on substances of concern, including the PFAS restriction in food-contact packaging and the heavy-metal limits (Art. 5).
- Recyclability — the design-for-recycling grades your packaging must meet (Art. 6).
- Recycled content — the minimum recycled plastic percentages (Art. 7).
- Minimisation — keeping packaging weight, volume and layers to what the function needs (Art. 10).
- Labelling — the material-composition and sorting labels (Art. 12).
- Technical documentation and the declaration of conformity — every manufacturer draws these up and stands behind them (Art. 15).
None of these is switched off below a revenue line. So the common assumption — “we’re small, the PPWR can’t be aimed at us” — is wrong for the part of the regulation that carries the real product risk.
Where size does matter: the micro-enterprise carve-outs
The regulation does relieve the smallest operators of a few specific obligations, and every one of these carve-outs keys on the micro-enterprise definition in Commission Recommendation 2003/361/EC (the regulation pins that definition as it stood on 11 February 2025). The confirmed carve-outs are narrow:
- Reuse targets (Art. 11 and the reuse regime) — micro-enterprises below a volume threshold are exempt from the binding reuse targets. The rest of the packaging duties still apply.
- Re-use and refill for final distributors (Art. 51) — a final distributor is exempt from that article’s obligations if it falls within the micro-enterprise definition in Recommendation 2003/361/EC.
- Technical-documentation shift — where the company placing a packaged product under its own name or trademark is a micro-enterprise and its packaging supplier is in the same member state, the supplier is treated as the manufacturer for the technical-documentation duty. The duty moves up the chain; it does not disappear.
Everything outside that short list — the substance limits, recyclability, recycled content, labelling, the declaration of conformity — applies to a micro-enterprise in full.
What “turnover” means — how the SME test is measured
This is the point people get wrong when they type “does turnover mean my EU turnover?” The Recommendation 2003/361/EC test is headcount plus (annual turnover or balance-sheet total), measured at the level of the whole undertaking, worldwide, and consolidated with partner and linked enterprises. It is not your EU turnover, and it is not your sales in a single member state.
| Category | Staff headcount | Turnover / balance sheet |
|---|---|---|
| Micro | Fewer than 10 | ≤ €2m turnover or ≤ €2m balance sheet |
| Small | Fewer than 50 | ≤ €10m turnover or ≤ €10m balance sheet |
| Medium | Fewer than 250 | ≤ €50m turnover or ≤ €43m balance sheet |
Only the micro band unlocks the PPWR carve-outs above. The small and medium bands matter elsewhere in EU law but do not, on their own, exempt you from the packaging duties.
What is the same everywhere — and what varies by country
The substantive rules are identical across the EU because the PPWR is a regulation with direct effect (Art. 4 secures free movement of conforming packaging). What changes country by country is the administrative and extended-producer-responsibility layer — where you register, what you pay, and what happens if you get it wrong:
| Layer | What varies | Cited |
|---|---|---|
| Producer register | A register run by the competent authority in each member state. You register per country you place packaging into. | Art. 44 |
| EPR fees & reporting | Fees, fee modulation and reporting formats are set by national schemes; small-tonnage simplifications differ (Germany’s LUCID has no floor). | Art. 45 |
| Deposit & return | Deposit-return systems are national. | Art. 50 |
| Penalties | Set by each member state. No EU-wide fine level; states notify their rules to the Commission by 12 February 2027. | Art. 68 |
The PPWR sets no EU-wide fine. Penalties must be “effective, proportionate and dissuasive” and are left to each member state; Germany’s draft, for example, runs to €10,000–€200,000 per violation. Treat that as one member state’s proposal, not a settled EU figure.
What being small does and doesn’t change. It doesn’t change the core product duties — substance limits, recyclability, recycled content, labelling and the declaration of conformity apply whatever your size. It only unlocks a short list of micro-enterprise carve-outs (reuse targets, the Art. 51 refill duty, the documentation shift), and only if your whole group passes the Recommendation 2003/361/EC micro test on a worldwide, consolidated basis. Where you register, the EPR fees you pay and the penalties you face are set nationally.
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Get my PPWR obligations report →Frequently asked questions
Is there a small-business exemption from the PPWR?
No general one. The core packaging duties in Regulation (EU) 2025/40 — restricted substances (Art. 5), recyclability (Art. 6), recycled content (Art. 7), minimisation (Art. 10), labelling (Art. 12) and the manufacturer's technical documentation and declaration of conformity (Art. 15) — carry no turnover or headcount threshold. They apply to a one-person importer exactly as they apply to a multinational. A handful of narrow carve-outs exist for micro-enterprises, but there is no blanket exemption for being small.
Does 'turnover' mean my EU turnover or my sales in one country?
Neither. The micro-enterprise test the PPWR uses comes from Commission Recommendation 2003/361/EC, which measures headcount plus annual turnover or balance-sheet total at the level of the whole undertaking, worldwide, and consolidated with partner and linked enterprises. It is your global group turnover, not your EU sales and not your sales in a single member state. A micro-enterprise is under 10 staff and no more than €2 million turnover or balance sheet.
Can a small EU subsidiary of a larger group claim an SME carve-out?
No. Recommendation 2003/361/EC consolidates linked enterprises, so a subsidiary is measured together with its parent and the wider group. A small European arm of a company that is large worldwide does not qualify as a micro-enterprise. A non-EU business with, for example, around €40 million of global revenue selling €200,000 of goods into one member state is not an SME under the test.
What actually varies by country if the rules are the same everywhere?
The administrative layer. The substantive duties are identical in all 27 member states because the PPWR is a regulation, but you register as a producer in each member state where you make packaging available (Art. 44), the extended-producer-responsibility fees and reporting formats are set by national schemes (Art. 45), deposit-return rules are national (Art. 50), and penalties are set by each member state (Art. 68) — member states must notify their penalty rules to the Commission by 12 February 2027.
Sources
- Regulation (EU) 2025/40 (PPWR) — core duties with no size threshold: restricted substances (Art. 5), recyclability (Art. 6), recycled content (Art. 7), minimisation (Art. 10), labelling (Art. 12), manufacturer documentation and declaration of conformity (Art. 15); free movement (Art. 4) — https://eur-lex.europa.eu/eli/reg/2025/40/oj/eng
- Regulation (EU) 2025/40 (PPWR) — micro-enterprise carve-outs: reuse targets (Art. 11), re-use and refill for final distributors (Art. 51) — https://eur-lex.europa.eu/eli/reg/2025/40/oj/eng
- Regulation (EU) 2025/40 (PPWR) — administrative layer: producer register (Art. 44), EPR (Art. 45), deposit and return (Art. 50), penalties and the 12 February 2027 notification deadline (Art. 68) — https://eur-lex.europa.eu/eli/reg/2025/40/oj/eng
- Commission Recommendation 2003/361/EC — the definition of micro, small and medium-sized enterprises (headcount plus turnover or balance sheet, measured on the whole undertaking including partner and linked enterprises) — https://eur-lex.europa.eu/eli/reco/2003/361/oj/eng