Automotive OEMs and their packaging suppliers face mounting pressure from both sides of the Atlantic as the EU's Packaging and Packaging Waste Regulation (PPWR) takes effect in August 2026 and US state-level Extended Producer Responsibility programs accelerate enforcement. The dual regulatory push is forcing contract renegotiations, supplier audits, and packaging redesigns across the automotive supply chain, with costs and compliance risk rising for companies that delay preparation.
Background
The European Union formally adopted Regulation (EU) 2025/40, commonly known as the PPWR, which entered into force in February 2025.1Recycled Content in plastic packaging | PPWR | Mondi Group The regulation will generally apply starting August 12, 2026, though several detailed requirements - particularly around labeling, recyclability, recycled content, and reuse - will phase in between 2026 and 2030 and beyond.
Unlike the previous Packaging and Packaging Waste Directive, the PPWR establishes a single, harmonized legal framework across all Member States, applying uniformly as a regulation rather than a directive. For the automotive sector, this means transport packaging - crates, pallets, returnable containers, and protective inserts - falls squarely within scope. The PPWR covers all packaging regardless of whether it is used in B2C or B2B contexts, explicitly including transport packaging, outer packaging, pallets, drums, crates, intermediate bulk containers, big bags, and reusable industrial packaging.
In the United States, EPR is advancing state by state, with Maine, Oregon, Colorado, and California among those that have already passed packaging-focused EPR laws at varying stages of implementation. Seven US states have enacted packaging EPR laws as of late 2025, with additional legislative activity underway in 2026.
Details
The PPWR introduces binding recycled-content mandates for plastic packaging. By 2030, single-use PET beverage bottles must contain at least 30% post-consumer recycled content, while other plastic packaging must reach 35% PCR, with targets rising to 65% by 2040. Contact-sensitive packaging made from non-PET plastics must contain 10% recycled content by 2030 and 25% by 2040. These thresholds apply to any plastic packaging component placed on the EU market, including automotive transport and protective packaging.
Lubomir Kroupa, COO of an environmentally focused packaging firm, noted that "from 12 August 2026, we will have to confirm to our customers that the packaging complies with the requirements," adding that "it has not yet been conclusively clarified how this conformity is to be proven in detail."
At the ALSC Europe 2026 conference, JLR senior packaging manager Jonathan Shepard acknowledged the regulation's significance: "We don't underestimate the impact of PPWR and what's coming. We know in August it's going to be a binding regulation that we have to adhere to." He also highlighted practical trade-offs, explaining that some containers cannot incorporate recycled content without redesigning the box and potentially increasing material weight, which "is counterintuitive and counterproductive to what the legislation is trying to achieve."
Eco-modulation of EPR fees will expand, meaning packaging design directly affects compliance costs - packaging that is difficult to recycle will attract higher fees, while compliant designs benefit from lower financial burdens. The same principle is taking hold in the US. California's SB 54 allows fines of up to $50,000 per day for noncompliance and will begin collecting EPR fees based on 2025 data, with payments due starting in 2027.
Outlook
Most OEMs and tier suppliers still face cost pressures, complex parts, and regulatory challenges that make buyers cautious about adopting new packaging innovations. With the PPWR's August 2026 general application date now four months away and US state EPR programs shifting from framework-building to active enforcement, automotive packaging decisions made in current contract cycles will determine compliance posture through the end of the decade. OEMs that have not yet audited supplier packaging portfolios against both EU and US requirements face growing risk of market-access disruptions and escalating fee exposure.
