EPR simplification for small businesses: European Parliament backs suspending the authorised representative obligation – analysis

EPR simplification for small businesses has moved from industry wish list to parliamentary position: in October 2026 the European Parliament agreed that EU-based small and micro enterprises should no longer have to appoint a separate authorised representative in every member state where they sell their products. The change covers packaging, batteries, textiles, footwear, electrical and electronic equipment and single-use plastics. MEPs did, however, narrow the European Commission’s original proposal and made it clear that fees and other producer obligations stay in place.

In short: EPR simplification for small businesses means that EU companies with fewer than 50 employees and an annual turnover or balance sheet total of no more than €10 million would not need to appoint an authorised representative in each member state until 2035 – or until a comprehensive EU circular economy act is adopted. EPR fees, waste-prevention duties and other obligations remain unchanged.

What exactly did the European Parliament vote for?

Following the plenary debate on 19 October 2026, Parliament adopted its negotiating position on two pieces of legislation. Both are part of the Commission’s Environmental Omnibus package, which aims to reduce the administrative burden of EU environmental law.

Both votes delivered clear majorities:

• the position on waste batteries and packaging waste was supported by 616 MEPs, with 9 against and 39 abstentions;
• the position on textile, footwear, electrical appliance and single-use plastic waste passed with 612 in favour, 8 against and 39 abstentions.

Support at this level is rare in waste legislation. It signals that suspending the representative obligation is not a political fault line but a widely accepted fix to a single-market barrier. The final text, however, will only emerge after trilogue negotiations with the Council.

What is an authorised representative, and why is it a burden?

The core idea of extended producer responsibility (EPR) is that the company placing a product on the market pays for the collection, sorting and recycling of the waste that product becomes. Current EU rules also require a producer to appoint an authorised representative in every member state where it sells but is not established. That representative handles EPR compliance locally: registration, reporting and fee payment.

For a large company with subsidiaries across Europe, this is routine. For a ten-person online shop or small manufacturer shipping to a few neighbouring countries, it is a disproportionate fixed cost: a separate contract, a separate service provider and a separate fee in every destination country – often regardless of whether it places a few hundred kilograms or several tonnes of packaging on that market.

The problem is sharpest for packaging, because almost every product has some. Industry experience with packaging design for recycling already shows how much of the compliance effort falls on getting packaging data right across different national systems.

Who qualifies for EPR simplification for small businesses, and for how long?

The Commission originally proposed a general suspension of the authorised representative obligation in certain sectors. Parliament backs a more targeted approach with three conditions:

• EU-based companies only. Online sellers and producers from third countries – for example in Asia – would still have to appoint representatives.
• Small and micro enterprises only. The threshold is fewer than 50 employees and an annual turnover or balance sheet total of up to €10 million.
• Time-limited. The suspension would run until 2035, or until the EU adopts a comprehensive Circular Economy Act, which the Commission is expected to propose later in 2026.

Excluding third-country operators is a deliberate choice. One of the biggest weaknesses of EPR systems is distance selling, where the producer is out of reach of national authorities. The authorised representative exists precisely to close that gap – so Parliament is easing the rules only where the producer operates within the EU legal framework and can be reached if needed.

What does not change: fees, prevention, reporting

MEPs explicitly stated that the suspension does not affect other obligations under EPR schemes. A small business will still have to pay for the products it places on each national market and comply with waste-prevention and other producer requirements. The responsibility does not disappear; only the mandatory intermediary does.

That distinction matters. EPR fees fund collection and recycling systems – if they fell away, the cost would shift to households and municipalities. The experience of extended producer responsibility in the US shows how central producer funding is to making collection systems work at all.

Parliament is also calling for further steps to ease compliance within the single market:

• better information exchange between member states,
• interoperable digital systems,
• common reporting requirements for companies.

The second point is crucial. Without a local representative, a small business must connect directly to several national registers. If those systems do not talk to each other, the administrative burden is merely rearranged rather than reduced.

What could this mean for Hungary?

Hungary’s extended producer responsibility system has been running since July 2023, coordinated by MOHU MOL Hulladékgazdálkodási Zrt., which acts as the national concession company. Authorised representatives are governed by Section 10 of Government Decree 80/2023 (III. 14.), and Hungarian rules already draw a distinction:

• a producer established abroad that places circular products on the Hungarian market may fulfil its obligations through an authorised representative – an option, not a requirement;
• a producer established abroad that sells into Hungary as an e-commerce service must fulfil its obligations through an authorised representative;
• the authorised representative must be established in Hungary with a Hungarian tax number, and is liable for meeting the producer’s obligations.

The proposed EU suspension would therefore work in both directions, but with different weight.

For Hungarian small businesses that export. A small Hungarian company selling packaged goods, clothing or small electronics into Austria, Slovakia or Romania could save the cost of representatives in those countries – especially where the destination country requires one from every foreign producer. The effect would be most visible in cross-border e-commerce and small-batch manufacturing.

For small EU businesses entering the Hungarian market. In Hungary the change would mainly affect distance sellers: a small Slovak or Austrian online shop shipping directly to Hungarian customers would no longer need a Hungarian authorised representative. For other sales, Hungarian rules never made the representative mandatory. Losing mandatory representation raises new questions for Hungarian EPR registration and fee collection – for instance, how the authority and MOHU will identify, invoice and check foreign online sellers without a Hungarian tax number directly, given that today it is the representative who is liable in Hungary.

The timing is notable, because the Hungarian system itself is in flux. The waste management concession review and the expected renegotiation of MOHU’s concession contract touch on exactly the questions an EU-level EPR simplification raises: who pays, who reports what, and who is responsible for the system working.

The product streams involved are significant in Hungary as well. Eurostat’s latest e-waste figures show that separate collection of electronic waste is still falling short across the EU, while separate textile collection in Hungary is only now being built up – as we covered in our piece on MOHU’s free textile collection containers.

Risks: who is accountable when there is no representative?

The authorised representative is not bureaucracy for its own sake. Its role is to ensure there is a legally reachable, accountable party in the destination country. Remove it, and three risks come into view.

An enforcement gap. Authorities will have to recover unpaid fees or missing data from a company based in another member state. That depends on the quality of cooperation between member states – which is why Parliament stresses information exchange.

Free-riding. If some small businesses fail to register in destination countries, collection systems have to run on fewer contributions, which may push up fees for compliant producers.

Safety-critical waste streams. For batteries, fees fund not only recycling but safe collection. The sharp rise in battery fires in waste management shows what is at stake if funding for a waste stream weakens.

These risks are manageable – but only if the suspension comes with genuine digital cooperation and harmonised reporting.

Next steps: Council, trilogue, Circular Economy Act

Parliament’s position is not yet law. The next steps are:

1. Council position. Member states must adopt their own negotiating position.
2. Trilogue. Parliament, Council and Commission will then negotiate the final text.
3. Circular Economy Act. The Commission is expected to table a comprehensive proposal later in 2026, which may reshape how EPR schemes interact in the longer term – and which, under Parliament’s text, could end the temporary suspension before 2035.

The regulation and the directive will work differently: amendments to the regulation will apply directly, while the directive’s provisions must be transposed into national law, so Hungarian legislation will also need to be amended.

Our assessment: the right direction, but the details will decide

Parliament’s decision is a sensible compromise. It recognises that in a single market it makes little sense for a small business to hire 27 different local intermediaries to meet the same obligation. At the same time, it does not let simplification slide into weaker producer responsibility: fees remain, third-country operators get no relief, and the suspension is time-limited.

The real question is what a small business actually gains. If, instead of a representative, it must register on 27 different national portals, report in different formats and track different deadlines, the burden simply changes shape. EPR simplification is only worth something if harmonised reporting and connected registers follow – and for now the vote treats these as a request, not an obligation.

Businesses would do well to map where they sell, what representative contracts they hold there, and how easily those contracts could be ended if the rules change. Until the final rules are known, however, current obligations remain fully in force.

FAQ – EPR simplification for small businesses

What does EPR simplification for small businesses mean?

It means EU-based small and micro enterprises would no longer have to appoint an authorised representative in every member state where they sell their products. The European Parliament adopted its position on this in October 2026. The change covers packaging, batteries, textiles, footwear, electrical and electronic equipment and single-use plastics.

Which companies would be exempt from appointing an authorised representative?

Only EU-based companies with fewer than 50 employees and an annual turnover or balance sheet total of no more than €10 million. Producers and online sellers from third countries would still have to appoint representatives, because ensuring that authorities can reach them is the hardest part of enforcing EPR.

How long would the suspension of the authorised representative obligation last?

Under Parliament’s position, until 2035 or until the EU adopts a comprehensive Circular Economy Act. The Commission is expected to propose that act later in 2026, so the temporary suspension could end before 2035 if the new framework enters into force earlier.

Do small businesses still have to pay EPR fees?

Yes. MEPs explicitly stated that the suspension does not affect other obligations under EPR schemes, including fees and waste-prevention requirements. A small business would still pay for the products it places on each national market; only the mandatory local intermediary would no longer be required.

When will EPR simplification for small businesses take effect?

That is not yet known. Parliament’s text is a negotiating position: the Council must adopt its own, and the final text will be agreed in trilogue. Member states must then transpose the directive’s provisions, and until then current obligations remain fully in force.

How does the change affect Hungarian businesses?

In two directions. Hungarian small exporters could save the cost of representatives in destination countries. At home, Government Decree 80/2023 makes an authorised representative mandatory only for foreign e-commerce sellers, so mainly small EU online shops shipping directly to Hungarian customers would no longer need a Hungarian representative.

🔗 Official sources and references: 👉

• European Parliament, press release (20 October 2026): Waste: MEPs back simplified rules for small businesses
• Government Decree 80/2023 (III. 14.) on the detailed rules of the extended producer responsibility system (consolidated text, in Hungarian)
• European Commission proposal: COM(2025) 980
• Procedure file – regulation: 2025/0395(COD)
• Procedure file – directive: 2025/0396(COD)
• EPRS Briefing: Extended producer responsibility (24 September 2026)
• Legislative Train: Environmental Omnibus package

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