Does allocation affect the cost of Extended Producer Responsibility?
When your company is subject to Extended Producer Responsibility (EPR) for packaging, you pay for the collection, sorting and recycling of the packaging waste that your packaging becomes in the municipalities.
As a member of Emballageretur, we handle the practical and financial management of your company’s EPR obligations.
But the cost of handling your packaging does not depend only on your own volumes. It also depends on the so-called allocation.
In this article, we explain what that means — and how it affects the price your company pays.
The plan is that Dansk Producentansvar (DPA) allocates municipal waste volumes between the Producer Responsibility Organisations (PROs) every two years.
This allocation is based on:
how much packaging the member companies in each PRO collectively place on the market
and how much waste has historically been collected in each municipality.
The aim is for each PRO to pay for the collection of the share of waste that corresponds to that PRO’s market share.
But because reality is not perfect, a PRO may end up being allocated either more or less packaging waste than its market share would actually indicate.
This is called over- and under-allocation.
Over-allocation occurs when a PRO is allocated more packaging waste for collection in the municipalities than its market share should trigger.
This can happen, for example, if a member company has reported packaging volumes that are too high, or if there is more waste in the municipality than expected.
Financial consequence:
The individual PRO receives a higher invoice from the municipalities, which must be financed by the member companies. This can affect the price per kilo of packaging in the following year.
Under-allocation occurs when a PRO is allocated less packaging waste for collection in the municipalities than its market share should trigger.
Financial consequence:
The PRO’s costs for payments to the municipalities are lower, and this may have a positive effect on the price level in the following year.
Allocation is not a static concept. The system is designed to be adjusted continuously, so that costs are distributed as fairly as possible.
This means, for example, that if we have been over-allocated in one year, and have therefore paid too much for the collection of our member companies’ packaging waste based on our market shares, the adjustment will ensure that we receive a smaller allocation the following year – and therefore have to pay less.
In autumn 2025, a debate arose about an alleged allocation error for packaging, which critics claimed had created unfair price differences between Producer Responsibility Organisations (PROs).
A central part of the discussion concerned producers below the de minimis threshold, i.e. companies with less than 8 tonnes of packaging per year. These companies can choose either to report their packaging quantities by material category or as a combined total.
Danish Producer Responsibility (DPA) has stated that only the quantities reported as a combined total were not distributed in the allocation for 2025 and 2026.
The reason is that, at the time of allocation, there was no allocation key that could correctly distribute these quantities across materials. Without a professionally and data-supported allocation key, any allocation would have involved significant uncertainty.
DPA has also stated that the non-allocated quantities amount to less than 1% of the total packaging waste quantity.
On that basis, DPA has assessed that the scale is not sufficient to carry out a new allocation process.
At the same time, the system is designed so that PROs that have collected more than their allocation are adjusted in subsequent allocations. Any over-collection is therefore compensated over time, as described in the previous sections.
DPA has also stated that a new allocation key, which takes material categories into account for companies below 8 tonnes, is currently being developed and is expected to be ready for the next allocation in 2027. This means that allocation will become even more accurate and transparent going forward.
It is important to underline that over-allocation and under-allocation only affect the finances of the individual Producer Responsibility Organisation.
The finances are completely separate, and no PRO pays for fluctuations in another PRO.
This means, for example, that:
If Emballageretur receives an over-allocation, only Emballageretur’s members may be affected by the additional cost.
If we receive an under-allocation, no other PRO benefits from it.
In short:
Each PRO carries the consequences of its own allocation.
There is no cross-financing and no mixing of finances.
This means that the allocation of any other PRO – whether positive or negative – can never affect your price with Emballageretur.
In a system such as Extended Producer Responsibility (EPR) for packaging, allocations will naturally vary from year to year.
Some PROs choose to let their prices fluctuate directly with these changes. This often creates unstable price levels, where companies never quite know what next year’s budget will look like.
That is not how we work in Emballageretur.
Our sister organisation, Elretur, has managed EPR for electronics for 20 years and has delivered documented and historically stable prices year after year throughout that period.
Emballageretur has therefore naturally adopted Elretur’s principles to ensure that the companies we help with packaging EPR get prices that are as stable as possible – year after year after year.
The result is a pricing principle designed for long-term stability, not short-term fluctuations.
Allocation does not come as a surprise to us. We continuously analyse data on over-allocation and under-allocation and incorporate the risk into our pricing. This means that a single year with over-allocation does not overturn the finances or your price.
If we receive an under-allocation and therefore have lower costs, we set funds aside. These reserves are used specifically to balance the finances in a year when the allocation is higher.
This is how we ensure that our member companies avoid both price shocks and major fluctuations from year to year.
Each Producer Responsibility Organisation has its own finances. They are kept strictly separate, and no PRO pays for another PRO’s fluctuations.
For you as a member, this means that:
Emballageretur only pays for our own allocation.
Over-allocations in other PROs do not affect your price.
Any benefits from under-allocation only benefit Emballageretur’s members.
DPA’s system ensures that no PRO is liable for another, and that the finances are always separate.
At the same time, Emballageretur is part of Retur – Denmark’s largest family of Producer Responsibility Organisations:
We are:
Non-profit
Cost-efficient, with specialists across five different EPR areas
Able to secure economies of scale for our members
A member democracy with real influence for companies
Built on 20 years of experience in managing EPR in practice – and ensuring stable prices.
From the beginning, we have built our finances around robustness and risk management. Any fluctuations in allocation are handled through reserves and our pricing principle. We use the same financial mechanisms that have created 20 years of stability in Elretur. The finances of other PROs therefore do not affect Emballageretur.
This structure gives your company a crucial sense of security: your price as a member of Emballageretur depends only on our own finances – not on competitors, market fluctuations or the market shares of others.
That is why we can say with great confidence that Emballageretur is designed to deliver stable, predictable prices – not only next year, but year after year.
For your company, this provides what matters most in complex legislation: financial security and predictability.
Calculate your company’s prices with Emballageretur using our price calculator