The German federal government hopes to generate an additional €1.4 billion in annual revenue through the introduction of a new plastic tax to consolidate the budget. While the measure may initially seem desirable, Werner & Mertz strongly opposes the cabinet’s decision. According to the company’s statement, the proposal is excessively short-sighted and, in the long term, will only further burden and increase the vulnerability of the German economy. Instead of lumping new plastics and recycled materials together, the company urges a more effective eco-modulation system to protect Germany’s raw material independence.
€1.4 Billion Annually for the Budget: Background of the Plastic Tax
According to the latest cabinet decision, the German government aims to strengthen the domestic budget by introducing a plastic tax, from which they expect an additional €1.4 billion in annual revenue. Since 2021, an EU-wide plastic tax has been in place, requiring every member state to pay 80 cents for each kilogram of non-recycled plastic packaging.
Numerical data highlights the severity of the situation: around 1.7 million tons of plastic waste are generated annually in Germany, equating exactly to the aforementioned €1.4 billion burden for the country. This amount has so far been financed from tax revenues, ultimately from citizens’ payments. The newly planned German plastic tax would restructure this system to pass the costs directly onto those who put plastic packaging on the market.
Dangers of the Proposal to the Domestic Recycling Industry
A cornerstone of Werner & Mertz’s sharp criticism is that the government plan makes absolutely no distinction between packaging made from primary, fossil-based (virgin) plastic and packaging produced from recycled waste plastic (regranulate). This conflation creates further uncertainty for the already struggling German recycling sector.
There is already a lack of economic incentives that would encourage those placing packaging on the market to invest in more expensive but environmentally friendly recycled materials. According to Werner & Mertz, the additional costs caused by the planned tax will have the exact opposite effect: they will further decrease the demand for recycled packaging, which ultimately could even lead to a complete halt in investments in recycling plants.
Independence from Fossil Resources as a Priority
The company considers the plastic tax—in its current form—purely as a fiscal tool to plug budget holes, which it firmly rejects. They argue that the framework conditions for the circular economy in Germany must not be further degraded for the short-term interests of the state budget.
The firm points out that adopting the proposal would not only represent an ecological disaster but would also carry massive economic and security risks. In an era characterized by rising energy and raw material prices, fragile supply chains, and modern security threats, the circular economy is a crucial strategy for guaranteeing national security and economic independence. For Germany, gaining independence from fossil oil resources should be treated as a priority, if only to make the country less politically vulnerable to blackmail.
The German recycling sector is already facing serious difficulties. In recent months, an increasing number of sites in the plastic recycling sector have been closed, plants have been shut down, and several companies have filed for bankruptcy. The primary reason for this is that industrial demand for high-quality recycled materials has drastically fallen due to low prices. Recycling companies, which mostly belong to the SME sector, now need support and predictability more than ever to be able to invest in high-tech sorting systems.
“The German plastic tax in its currently proposed form would not be of any help: it is merely an additional burden on the German economy, without supporting the circular economy in any way,” stated Reinhard Schneider, owner of Werner & Mertz. Instead, the executive demands the introduction of a so-called eco-modulation under Paragraph 26 of the Packaging Act (VerpackG), which would have a truly guiding effect while simultaneously supporting climate protection and German raw material resilience.
Eco-modulation Instead of Additional Burdens: Werner & Mertz’s Alternative Proposal
Instead of mere taxation, the company has outlined a highly pragmatic solution for the targeted support of high-quality recycling in Germany. The essence of the concept is that every company placing plastic packaging on the market should pay a slightly increased licensing fee. This amount would be transferred via the dual systems issuing the licenses directly to a neutral fund management body.
In the next step, market players who place packaging made from recycled materials on the market could claim a refund based on the amount of regranulate used. The amount of this refund would be higher than the licensing fee paid in advance. According to Werner & Mertz’s reasoning, this system would create a meaningful financial incentive for the use of recycled materials and provide effective support for increasing the volume of a high-quality circular economy.
Pioneer of the Circular Economy: Werner & Mertz’s Achievements
Werner & Mertz has played a pioneering role for years and proves the successful practical application of the circular principle through its own example. The mid-sized company is at the forefront of the consistent use of recycled materials from post-consumer waste.
Within the framework of the group’s Recyclate Initiative, a historical milestone and new record was reached in June 2025: they achieved the production of one billion bottles made from 100 percent recycled plastic waste. Furthermore, the family business’s most famous brand, Frosch, is celebrating its 40th anniversary this year (2026), which also well exemplifies the long-term viability of the sustainable economic model.
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