Most brands treat EPR fees like a utility bill — an unavoidable cost based on how much packaging you use. Eco-modulation changes that. It's the mechanism that lets packaging design directly reduce (or increase) your EPR costs — sometimes by 30–50%.
Eco-modulation is the adjustment of EPR fees based on packaging recyclability and environmental performance. It's built on a simple economic principle: packaging that's cheap to collect and recycle should carry lower fees; packaging that contaminates recycling streams or can't be recycled should pay more.
In practice, PROs maintain a set of criteria that classify packaging into surcharge and discount categories. Your fee for that packaging is then multiplied by a modulation factor — higher or lower than the baseline rate.
It's existed in some form since France introduced it in 2012. But under the PPWR, eco-modulation becomes mandatory and will eventually be harmonised across the entire EU.
Currently, eco-modulation rules differ by country and PRO. Here are the main systems:
France has the most developed eco-modulation system in the EU. Citeo applies modulation factors ranging from -50% to +100% on base rates:
Bonus criteria (fee reductions):
Malus criteria (fee surcharges):
The net effect: a brand using dark PET bottles with PVC labels and a non-detachable sleeve could pay 85–100% more than baseline. A brand using clear PET bottles with paper labels and 30% recycled content could pay 55% less than baseline on the same weight.
Germany's eco-modulation is less formalised than France's but becoming more structured. The ZSVR (via the VerpackG) requires PROs to apply differentiated rates based on recyclability. The specific criteria vary by PRO, but common surcharge triggers include:
Germany is moving toward more formalised eco-modulation criteria aligned with the PPWR recyclability framework.
Fostplus introduced new eco-modulation criteria in 2024 and expanded them from August 2026. Belgium now distinguishes 7+ plastic sub-categories (PET, HDPE, PP, PE film, PS, PVC, other) with different rates for each, reflecting recyclability differences.
Non-recyclable formats (black plastic, PVC, multi-layer films without separation technology) carry the highest rates.
These markets are earlier in the eco-modulation journey. Surcharges exist for clearly non-recyclable materials (PVC, EPS, heavily contaminating formats), but the granular bonus/malus system is less developed than France and Belgium.
PPWR Articles 6 and 7 establish a mandatory harmonised eco-modulation framework across the EU. The mechanism:
Step 1 (by 1 Jan 2028): The EU Commission adopts delegated acts establishing recyclability grades A–E for all packaging categories. These grades will be based on:
Step 2 (from 1 Jan 2030): EPR fees across all EU member states must be modulated based on these grades. All PROs must apply higher fees to Grade D and E packaging; lower fees (or exemptions from certain surcharges) to Grade A and B packaging.
What the grades mean in practice:
| Grade | Description | Fee impact |
|-------|-------------|-----------|
| A | Recyclable at scale with existing collection and sorting | Lowest fee (baseline or below) |
| B | Recyclable with minor restrictions | Below-baseline fee |
| C | Recyclable in principle but with limitations in current infrastructure | Baseline fee |
| D | Not recyclable in current infrastructure | Surcharge |
| E | Non-recyclable / non-sortable | Highest surcharge |
The grades are being developed in collaboration with industry (EUROPEN, CEFLEX, RecyClass) and national sorting authorities. Initial mapping suggests:
Before changing anything, identify your current eco-modulation exposure. For each packaging component:
This tells you where your highest fee exposure is — and therefore where packaging changes create the most savings.
Switch from poly mailers to corrugated cardboard mailers. This changes the material (lower base rate) and improves recyclability. Eco-modulation impact: potentially -30–40% per kg compared to LDPE flexible film.
Remove dark colourants from plastic packaging. Clear or natural-coloured HDPE and PET are sorted by NIR machines; dark-coloured versions aren't. Switching to clear or lightly tinted packaging removes surcharges in France and will be relevant EU-wide under the grade system.
Avoid PVC and EPS. Both attract the highest surcharges. PVC is also subject to phase-out pressure in food-contact applications. EPS (expanded polystyrene) is effectively banned under some national rules. Replacing EPS with EPP (expanded polypropylene) or paper pulp alternatives removes the surcharge.
Ensure component separability. Labels that can't be removed, sleeves fused to glass — these contaminate sorting and attract surcharges. Use water-soluble adhesives for labels, detachable sleeves, or no sleeves at all.
Add recycled content. Most systems apply bonuses for 30%+ recycled content in plastics or paper. Recycled-content corrugated cardboard is standard; recycled-content plastic is more expensive but may be worth it at scale.
The standard calculation:
Annual fee without improvement: (kg × base rate) × modulation factor (e.g., 1.5 for surcharge)
Annual fee with improvement: (kg × new base rate or same rate) × new modulation factor (e.g., 0.7 for discount)
Annual saving: difference
If the packaging change costs €X upfront and saves €Y per year in EPR fees across all markets, payback period = X/Y. For brands selling in multiple markets, the saving compounds across every market's system.
Note: packaging changes often have benefits beyond EPR fees — lower shipping weight, better customer experience, carbon footprint reduction. Run the full ROI calculation, not just the EPR component.
With recyclability grades arriving in 2028 and mandatory eco-modulation from 2030, brands using Grade D/E packaging face a significant fee increase at that point. The surcharge magnitudes haven't been set yet, but based on current French malus rates and the political trajectory, brands still using LDPE polybag mailers, EPS, or multi-layer flexible films as primary packaging in 2030 should expect 50–100%+ surcharges on those materials.
Starting packaging redesign now — rather than in 2028 or 2029 — gives you time to work through supplier changes, test new formats, and capture the fee savings across several years before the mandatory surcharges kick in.
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For the full lifecycle of packaging redesign decisions and their financial impact, see our expert article on packaging redesign for EPR savings. For the regulatory framework behind the grades, see Recyclability grades A–E and EPR fee impact.