EVEA: European Commission has locked small businesses out of the single market

TALLINN - The European Union's packaging regulation (EU 2025/40) has, since August 12, effectively shut down the single market for micro- and small enterprises that have been selling small quantities of products to other member states, the Estonian Association of Small and Medium-sized Enterprises (EVEA) wrote to the European Commission.

"Although the goal of collecting and reducing packaging is correct, the means chosen to achieve it have completely failed and, with the added costs and bureaucracy, are effectively locking small businesses out of the European Union's single market. The regulation must be suspended until solutions are found," EVEA CEO Leho Verk wrote to the European Commission. "For example, if an Estonian micro-enterprise sells a packaged product from its e-shop directly to an end-user in another member state, it must comply with all obligations in force there, related to producer registration, reporting, and producer responsibility. For small quantities, these costs are significantly higher than the expected revenue."

The regulation requires a business selling directly to an end-user in another member state to appoint an authorized representative for producer responsibility. "The environmental cost depends on the quantity of packaging, but the costs of appointing, registering, and managing a representative are mostly fixed and do not depend on whether the company sells only one or a few products to a specific member state annually," Verk explained. "For small sales volumes, the actual cost of handling packaging waste is very low, but the added bureaucratic cost amounts to hundreds of euros per year for a single member state."

Although the European Commission has reached the same conclusion after adopting the Packaging and Packaging Waste Regulation (PPWR) and recommends suspending the obligation until 2035, the rule is still in force and creates significant risks for businesses.

"As entrepreneurs themselves describe their situation, they are left with three options: comply with the requirements of the current regulation and suffer significant financial loss, ignore the current regulation and risk a disastrous fine for their company, or stop selling their products to other member states," Verk added.

EVEA is calling on the European Commission to promptly suspend the new regulation and prepare long-term solutions. "From the perspective of small businesses, there are three possible solutions: creating a single EU-wide registration system to reduce the administrative burden, legalizing the use of one representative for multiple or all member states to optimize costs, and creating a significantly simplified procedure for micro-enterprises or very small quantities of packaging," Verk added.

The Estonian Association of Small and Medium-sized Enterprises (EVEA) was founded in 1988 and has over 6,000 small business members. EVEA's main objective is to protect the interests of entrepreneurs and prevent the adoption of decisions that are harmful to the economy.