The New EU Packaging Rules Could Shut Small Businesses Out of Europe

Why EPR and the EU’s new packaging regulation may make a single overseas order too expensive to fulfil

For years, a small British business could test demand in Europe with relatively little risk. An online shop might receive an occasional order from France, Germany, Spain or the Netherlands, put the product in a recyclable box and send it on its way.

That simple model is now under serious pressure.

The EU’s Packaging and Packaging Waste Regulation, usually shortened to PPWR, began applying on 12 August 2026. It sits alongside Extended Producer Responsibility, or EPR, rules which make the businesses placing packaging on a market responsible for the cost and management of the waste it creates.

The environmental objective is understandable. Packaging should be reduced, made more recyclable and paid for by the businesses that profit from putting it into circulation. Few responsible companies would argue with that principle.

The problem is the way compliance works for small cross-border sellers.

For a large retailer sending thousands of parcels into each European country, registration, reporting and compliance fees are another operating cost. For a craft business, independent publisher, small clothing brand, specialist parts supplier or one-person online shop sending only a handful of orders, the fixed cost of compliance can be greater than the value of the sales themselves.

The result may not be greener trade. It may simply be less trade, less choice for European consumers and another reason for small UK businesses to switch off EU delivery altogether.

What are PPWR and EPR?

PPWR is the EU’s new regulation covering packaging and packaging waste. It replaces the previous Packaging and Packaging Waste Directive and applies to packaging placed on the EU market, regardless of where that packaging or the product inside it originated.

The regulation is being introduced in phases. Its longer-term aims include:

• reducing unnecessary packaging and empty space
• making packaging recyclable
• increasing recycled content in plastic packaging
• improving sorting and disposal labels
• restricting certain harmful substances
• encouraging reuse and refill systems

The European Commission says the regulation covers all packaging and packaging waste. Although some lighter provisions apply to micro-enterprises, small size does not provide a general exemption from its core requirements. The UK Government’s own export guidance confirms that UK businesses selling packaged goods into the EU must comply and that initial PPWR requirements apply from 12 August 2026, with further measures phased in through to 2040.

EPR is the mechanism that makes a producer financially and administratively responsible for the packaging it places on a market. Depending on the country and the way products are sold, this can mean registering with a national authority or compliance scheme, recording packaging materials and weights, submitting reports and paying fees towards collection and recycling.

It is important to understand that there is not currently one simple EU-wide EPR registration covering every member state. Packaging EPR is still administered through national systems. A UK business therefore needs to examine the requirements in each EU country to which it sells.

Why this is such a problem for small online sellers

Imagine a small British maker receives one £40 order from a customer in Germany and another from a customer in France.

The cardboard box, paper filling, tape, label and the product’s own packaging may all need to be identified and weighed. The seller may need to determine whether it is legally the producer in each market, register under the relevant national system, submit data, pay scheme fees and check whether a locally established authorised representative is required.

Some countries have thresholds or simplified routes. Others have rules that can apply from the first item of packaging placed on the market. Charges also vary by country, packaging type and service provider. Recent industry coverage has put the cost of compliance services at hundreds of euros per market each year and sometimes more, before the business has sold a meaningful volume of goods there.

That creates a deeply uneven impact:

• a multinational can spread fixed compliance costs across hundreds of thousands of orders
• a small seller may incur much of the same administration for ten orders
• a business selling across several EU countries may face several registrations rather than one
• marketplaces and fulfilment providers may request registration details and restrict non-compliant listings
• uncertainty itself becomes a cost because businesses may need specialist compliance or legal advice simply to establish what applies

This is why the rules have the potential to affect millions of micro and small businesses across Europe and beyond. Not every small business exports to the EU, of course. However, almost any product seller with an ecommerce website or marketplace account can receive a cross-border order. The regulation turns what was once an ordinary sale into a country-by-country compliance decision.

“But my business is exempt from EPR in the UK”

This is where many UK businesses may be caught out.

The UK has its own packaging EPR regime and it includes clear size thresholds. According to current GOV.UK guidance, an organisation is an obligated producer only if it carries out a relevant packaging activity and both of the following apply:

• it supplied or imported more than 25 tonnes of packaging in the UK in the previous year
• its annual worldwide turnover was £1 million or more

The UK rules then divide obligated organisations into small and large producers:

Small UK producers must register, report packaging data annually and retain records. Large producers have additional duties including six-monthly reporting, recycling obligations and waste disposal fees for household packaging.

However, a UK exemption only determines a business’s duties in the UK. It does not accompany a parcel into France, Germany, Italy or any other EU market.

A business with turnover of £100,000 and only a few kilograms of packaging might have no UK EPR obligation at all but could still face registration or other compliance requirements when it sells directly to an EU customer. Each destination country’s rules, thresholds and interpretation must be checked separately.

What must a UK business sending parcels to the EU consider?

The exact answer depends on the product, packaging, destination and sales arrangement but businesses should consider the following before accepting an order:

1. Who is the producer?
   Responsibility may sit with the UK seller, an EU importer, a distributor, a marketplace or another party in the supply chain. Do not assume the courier or customer takes responsibility.
2. Where is the packaging first placed on the market?
   Obligations are linked to the country in which the packaged product reaches the market or end user. Selling into several countries may therefore create several separate compliance questions.
3. Is national EPR registration required?
   Check the packaging register or approved scheme in every country of sale. Thresholds, categories, fees and reporting periods are not identical.
4. Is an authorised representative needed?
   UK businesses are established outside the EU. Depending on the destination country’s implementation, a seller may need a locally established representative to handle EPR obligations. This is an area in which the rules and proposed amendments continue to develop, so current country-specific advice is essential.
5. Can you produce packaging data?
   Businesses should record the material and weight of product packaging, postal boxes, envelopes, labels, tape, padding and any other packaging used to fulfil an order.
6. Does the packaging itself meet PPWR requirements?
   Requirements are phased. Businesses need to distinguish the documentation and conformity duties applying now from future recyclability, labelling, recycled-content and reuse deadlines.
7. Will your marketplace or fulfilment partner require evidence?
   Online platforms may ask for registration numbers or other evidence. Failure to provide it could result in products being restricted or removed.

The commercial reality: many businesses will simply stop shipping

For a small business, compliance has to be proportionate to the market opportunity. If annual sales to one EU country are worth £500 but registration, representation and administration cost several hundred pounds, continuing to sell there makes no commercial sense.

Businesses are likely to respond by:

• limiting EU delivery to one or two proven markets
• setting a minimum order value
• selling through an EU-based importer or distributor
• using a marketplace or fulfilment partner that can assume defined responsibilities
• consolidating EU stock with an established partner
• increasing prices for EU customers
• suspending EU sales completely

The smallest companies will be affected first because they have the least capacity to absorb fixed costs. Ironically, these are often the businesses using simple packaging, producing in low volumes and offering specialist products that are unavailable from mass-market retailers.

There is also a danger that legitimate small businesses will withdraw while poorly informed or less scrupulous overseas sellers continue trading until enforcement catches up. That would penalise companies trying to comply without necessarily delivering the intended environmental benefit.

What should businesses do now?

Do not panic and do not assume that you must immediately register in all 27 EU member states. Start with evidence:

• review the last 12 months of EU sales by destination country
• identify which markets produce enough revenue to justify continued sales
• create a packaging specification for every product and parcel format
• check who is legally responsible under your contracts and delivery model
• obtain country-specific advice on EPR registration and representation
• update website delivery zones if some destinations are no longer viable
• make EU terms, delivery costs and possible restrictions clear to customers
• review the position regularly because implementation and proposed amendments are still developing

For many small companies, the sensible decision may be to concentrate on a few viable EU markets rather than offer delivery across the entire bloc. Others may decide that EU sales no longer justify the cost at all.

A well-intentioned rule with a disproportionate result

Businesses should take responsibility for the packaging they create. That principle is difficult to dispute.

What is difficult to defend is a fragmented system in which a micro-business may need to navigate multiple national registrations and potentially pay fixed representation and administration costs before sending even one parcel. Environmental charges linked sensibly to packaging volume are one thing. A compliance barrier that makes a £40 sale impossible is quite another.

Without a workable de minimis exemption, genuinely proportionate fees or a single registration system for cross-border sellers, the new regime risks closing the EU market to thousands of UK makers, retailers and specialist suppliers. Across Europe and the wider world, millions of small businesses have potential exposure.

The likely outcome is already becoming clear: fewer destinations, higher prices and many small businesses deciding that the safest and most affordable option is simply not to sell to EU customers.

That may reduce the number of parcels crossing borders. Whether it represents a fair or effective environmental policy is a much harder question.

Sources and further guidance

• UK Government guidance on EU PPWR
• European Commission overview of the Packaging and Packaging Waste Regulation
• GOV.UK: Check if you must comply with EPR for packaging

This article is a general overview and does not constitute legal or compliance advice. Requirements vary by country, product, packaging and sales arrangement. Businesses should obtain advice for the individual EU markets in which they trade.