What is the bonus-malus fee system for packaging?

The bonus-malus fee system is a financial structure used by producer responsibility organisations to calculate compliance costs. In France, Citeo's eco-modulated tariff structure is mandatory for producers placing 500,000 or more Consumer Sales Units (CSUs) on the market per year, while smaller producers may choose a flat-rate declaration instead.

For a long time, Extended Producer Responsibility (EPR) programmes operated on a simple principle: producers paid a flat fee based strictly on the weight and broad material category of the packaging they placed on the market. A merchant selling goods in a completely unrecyclable multi-material blister pack paid the exact same rate per kilogram as a merchant selling goods in a widely recycled, clear polyethylene bag. This flat-rate approach funded municipal waste collection but failed to create any direct financial incentive for brands to design better, more sustainable packaging.

The bonus-malus approach corrects this market failure by linking the economic cost of compliance directly to the environmental cost of the packaging design. By charging more for materials that disrupt recycling facilities and less for materials that feed cleanly into secondary markets, the system forces packaging decisions out of the marketing department and into the finance department. For an online seller, this means that ignoring the technical specifications of your mailing bags or product boxes will directly erode your profit margins through higher compliance invoices.

What the bonus-malus fee system actually means

At its core, a bonus-malus fee system is the practical application of eco-modulation. When you report your annual packaging volumes to a Producer Responsibility Organisation (PRO), you no longer just report total weights. You must break down the packaging by specific material grades, additives, colours, and physical formats. The PRO then evaluates these attributes against established design-for-recycling guidelines. If your packaging contains disruptive elements, such as non-washable glues or dark opaque plastics that optical sorting machines cannot see, the PRO applies a malus percentage on top of your base fee.

If your packaging is optimally designed for the recycling infrastructure in that specific country, you receive a bonus discount. This is not a mechanism designed to generate extra profit for the compliance schemes. The goal of eco-modulation is simply to redistribute the actual cost of waste management fairly among the producers who create the waste.

The eco-modulation must ensure cost neutrality for each individual material category, so companies with quantities in a material category as a whole do not pay more or less than the actual costs of waste treatment. (Eco-modulated fees - VANA)

Because this system operates as a closed financial loop within a specific material category, the extra revenue collected from the malus penalties is used directly to fund the discounts given to the companies achieving the bonus tier. This means that if you continue to use hard-to-recycle packaging, you are literally subsidising the compliance bills of your competitors who have transitioned to greener alternatives.

Does this apply to me?

If you place packaged goods on the market in a jurisdiction that enforces eco-modulation, this system directly dictates your compliance costs. In the European Union, the Packaging and Packaging Waste Regulation (PPWR) makes this mandatory. Eighteen months after the entry into force of the relevant delegated and implementing acts, the financial contributions paid by producers to comply with EPR obligations must be modulated in accordance with harmonised recyclability performance grades (Packaging and Packaging Waste Regulation (EU) 2025/40). Under the PPWR framework, packaging will be assessed and classified into performance grades A, B, or C, and any packaging falling below a 70 percent recyclability grade will be deemed technically non-recyclable and restricted from the market entirely.

At the national level, many countries already enforce their own bonus-malus systems. In Denmark, packaging is sorted into green, yellow, and red levels based on specific design criteria. In France, the PRO Citeo applies an eco-modulated tariff structure that is mandatory for any producer placing 500,000 or more Consumer Sales Units (CSUs) on the market per year (My membership - Citeo.com). If you fall below this threshold in France, you can opt for a flat-rate declaration, but you forfeit the ability to claim any bonus discounts. Spain also legally mandates that collective systems establish transparent and non-discriminatory bonuses and penalties based on product efficiency criteria (Real Decreto 1055/2022, de 27 de diciembre, de envases y residuos de).

Why do bonus-malus rates differ so widely between countries and materials?

The numbers behind eco-modulated fees vary significantly by country, by PRO, and by the specific material in question. In all cases, however, the financial penalty for poor design is substantial. If you cannot document that your packaging meets the necessary design criteria, you will default to the highest penalty bracket. In Denmark, for example, if a business cannot document a design criterion, the packaging must be categorised at the red level.

Common misconceptions about the bonus-malus fee system

“The malus is a fine paid to the national government”

This is incorrect. The malus is not a punitive state fine or a tax. It is a surcharge paid directly to your chosen Producer Responsibility Organisation to cover the higher physical costs of collecting, sorting, and attempting to process non-standard or highly contaminated packaging waste.

“Receiving a bonus means you will make a profit on your compliance”

This is false. A bonus is simply a discount applied to your baseline EPR fee. You will always have a net cost for placing packaging on the market, but the bonus ensures that your cost is structurally lower than a competitor using less sustainable materials.

“Small sellers are completely exempt from eco-modulation”

While some national schemes currently offer simplified flat-rate reporting for micro-enterprises or low-volume sellers, the overarching direction of European legislation is universal modulation. Even if you are currently below a detailed reporting threshold, adopting recyclable designs now protects you against future cost shocks when those exemptions inevitably close.

“All plastic packaging automatically receives a malus”

This is a widespread misunderstanding. The bonus-malus system targets recyclability, not just the raw material family. A clear, mono-material PET plastic bottle with a compatible label will often receive a top-tier green rating and a corresponding bonus, while a paper-based container lined with unrecyclable plastic laminates could easily trigger a malus.

5 examples of packaging traits that trigger a bonus or malus

1. Dark and opaque plastics. Packaging made from carbon-black plastic absorbs the near-infrared light used by automatic sorting machines in recycling facilities. Because the machines cannot identify the resin, the plastic is sent to incineration or landfill, triggering a heavy malus.
2. Post-consumer recycled content. Incorporating material that has already lived a life as a consumer product creates market demand for recyclates. Many PROs reward this with a direct financial bonus, lowering your overall base fee per kilogram.
3. Paper packaging with non-washable glue. If the adhesives used to attach labels or seal boxes cannot be separated during the standard paper pulping process, they contaminate the entire batch of recycled paper. This limits compatibility and results in a malus.
4. Clear mono-material designs. A container constructed entirely from a single, widely accepted resin type, such as clear PET or HDPE, is highly valued by recyclers. This design choice reliably qualifies for the highest bonus tiers across multiple European jurisdictions.
5. Multi-material composites. Blister packs combining a rigid plastic shell firmly glued to a cardboard backing usually require manual separation by the consumer. Because consumers rarely separate these components properly, they degrade recycling streams and incur a penalty fee.

Terms related to the bonus-malus fee system

Frequently asked questions

Will the PPWR change how national bonus-malus systems work?

Yes. Currently, each national PRO sets its own specific design guidelines and discount amounts. The PPWR will introduce harmonised recyclability performance grades across the European Union. Financial contributions paid by producers will be modulated strictly in accordance with these unified A, B, and C performance grades.

How do I prove my packaging deserves a bonus discount?

You must obtain and keep technical documentation from your packaging suppliers detailing the exact material composition, inks, and adhesives used. During your periodic reporting, you submit this data to your PRO. Some schemes also provide self-assessment tools or require formal declarations of conformity to validate your claims.

Do I pay the malus directly to the tax authority?

No. The malus is an operational surcharge applied by the Producer Responsibility Organisation that you are registered with. You pay it as part of your standard periodic invoicing for waste management services, and the PRO uses those funds to balance the costs of processing difficult waste streams.

Can I pass the cost of a malus on to my customers?

You can generally factor the cost of your EPR compliance into your overall product pricing strategy. However, depending on local consumer protection laws and specific state regulations, you may be strictly prohibited from displaying the EPR fee or the malus penalty as a separate, visible line item on a customer receipt or checkout page.

What happens if I do not know the exact composition of my packaging?

If your supplier cannot provide detailed material specifications, you cannot prove that your packaging meets the required design-for-recycling criteria. In almost all operational bonus-malus systems, packaging with unknown or undocumented components automatically defaults to the highest red tier or maximum malus penalty.

Sources:

• Eco-modulated fees - VANA
• Packaging and Packaging Waste Regulation (EU) 2025/40
• My membership - Citeo.com
• Mon adhésion - Citeo.com
• Real Decreto 1055/2022, de 27 de diciembre, de envases y residuos de
• Rates | Verpact