DEAR MS. KARAMFILOVA-BLAGOVA,
The American Chamber of Commerce in Bulgaria supports the efforts of the proposed legislative initiative by the Ministry of Environment and Water (MEW) and the public consultation process initiated for the Draft Law Amending and Supplementing the Waste Management Act (Draft Amendment to the WM Act), which introduces a national deposit-return system for beverage containers. I would like to take this opportunity to express my support for the position of the Association of Soft Drink Producers in Bulgaria (ASDPB).
The Association has been monitoring the processes for introducing a national deposit system for the return of beverage containers for nearly four years. The public consultation is an important step in the right direction for implementing the requirements of European legislation in the field of waste management, specifically Regulation (EU) 2025/40. In this way, Bulgaria will modernize packaging management and achieve the goals of the circular economy. We look forward to joining the EU member states whose legislation (in line with that of the EU) and adopting, like them, some of the best practices they apply almost without exception – namely, deposit systems for packaging established and managed by the obligated industry.
We view it as a positive signal that, under the future Bulgarian system, returnable packaging does not have the status of waste until the moment of its verification. This is a key factor for the effective management of resources and for increasing opportunities for competition. We also view positively the planned transparent procedure for selecting a national deposit operator with the participation of all relevant institutions, ensuring competent and non-discriminatory management.
Alongside these positive aspects, we must also highlight several issues that we believe should be included in the amendments to the current Draft Amendment to the Waste Management Act.
1. There is a lack of general transitional provisions for the period between the law’s entry into force and the actual launch of the National Deposit Return System. Such provisions always create legal uncertainty during a period in which the law formally imposes obligations on producers and retailers, including fulfilling Extended Producer Responsibility (EPR) solely through the system and by entering into a contract with a national deposit operator, in practice before a fully operational system is in place, the operator has been licensed, and the infrastructure has been established.
In response, we propose that explicit transitional provisions be included, stipulating that until the official launch of the system, obligations shall continue to be fulfilled in accordance with the current procedures. Accordingly, the provisions regarding mandatory participation in the system and the corresponding penalties should enter into force on the date of its actual launch. In essence, these should precede the transitional and final provisions currently proposed in the draft.
We propose:
“§32. Until the launch date of the National Deposit Return System, the persons referred to in Article 13a, paragraph 1, shall fulfill their extended producer responsibility obligations for packaging under Article 18a, paragraph 2, in accordance with the current procedure under this Act and the subordinate legislation implementing it.”
“§33. The provisions of Article 13a, paragraph 1, Article 18a, paragraphs 2 and 6, Article 18c, Article 18d, as well as the administrative penalty provisions under Articles 148a and 148b shall enter into force on the date of launch of the National Deposit System for Packaging Return.”
2. We find that there is an inconsistency between the definition of “national deposit operator” in § 1, item 53 of the Supplementary Provisions, where it is correctly stated that the operator is a legal entity under the Commercial Act, and the provision of Article 28a, paragraph 2, which provides that the operator shall be a legal entity under the Non-Profit Legal Entities Act.
This discrepancy is likely due to a technical error, as the overall logic of the bill’s provisions—including the envisaged equity participation, market shares, and the management of significant financial resources, is, by its nature, consistent with the regulation of commercial companies rather than the regime for non-profit legal entities.
We note that the status of the national deposit operator should be explicitly regulated as a company under the Commercial Act that does not distribute profits, as currently regulated in the Act on Organizations for the Recovery of Widely Distributed Waste, through which the ROP has been implemented to date. This ensures a higher degree of legal and financial stability, clearer management mechanisms, participation of economic operators, capital structure, long-term planning, and the ability to manage the significant financial, logistical, and contractual flows characteristic of the operation of a deposit system with national coverage.
Specifically: companies under the Commercial Act engage in commercial activities, whereas entities under the Non-Profit Legal Entities Act primarily engage in non-commercial activities; in essence, the national depository operator will carry out commercial activities for the benefit of society. With regard to companies under the Commercial Act, there are detailed rules and accounting standards for financial reporting, which is of paramount importance both for the proper functioning of the depository operator and for its financing options.
It should be noted that the term “non-profit” does not constitute a requirement for a specific national legal form, nor does it require the operator to be a non-profit legal entity within the meaning of Bulgarian law. The concept is functional in nature and refers to the prohibition on distributing profits and the obligation that any revenue in the system exceeding expenses be used solely and exclusively for its operation and development.
This is also confirmed by established practice in Member States, where the majority of deposit operators are organized as commercial companies under a special regime with a prohibition on profit distribution, established by producers and retailers within the framework of the EPR system, as specifically provided for in this draft law. Some of the most successful examples in this regard are the deposit operators in Austria, Denmark, Sweden, Finland, Estonia, and Latvia, and publicly available information on this can also be found on the ReLoop Dashboard platform, where data on all deposit systems worldwide is published and updated.
In this regard, we propose that in §11, in Article 28a, paragraph 2, the words “the Law on Non-Profit Legal Entities” be replaced with the words “the Commercial Law.”
We also note that the numbering in §11 following Article 28a is incorrect. Accordingly, the subsequent articles should be numbered from Article 28b to Article 28g.
3. We believe it is necessary to include a mandatory requirement in the operation of the National Deposit Return System to explicitly regulate the right of beverage producers to priority access to the deposit packaging and materials collected through the system, in proportion to the quantities they have placed on the market.
This is a key element for the sustainable operation of the system and for achieving the quantitative targets under Regulation (EU) 2025/40 regarding the minimum recycled content in plastic beverage bottles. The deposit system creates a high-quality, clean, and traceable material stream of PET and metal packaging, which is of strategic importance to manufacturers in meeting the growing European requirements for bottle-to-bottle recycling and the use of food-grade recycled material.
The lack of guaranteed access to collected materials, especially for SMEs, would create a risk that manufacturers financing the system through the ROP from being unable to secure the necessary quantities of recyclable raw materials to fulfill their regulatory obligations, including due to the export and/or diversion of recyclable plastic materials to other markets and other industries (e.g., textiles). This would compromise one of the main objectives of the deposit system—closing the loop and ensuring true circularity within the beverage industry.
Such a mechanism is in line with the principles of the EPR Directive, insofar as it is the producers who financially ensure the system’s operation, as well as with established practices in the EU. In addition to being an already established mechanism for deposit operators, priority or guaranteed access to collected materials for producers is also regulated by law in an increasing number of Member States, particularly those that have introduced deposit systems in recent years.
Here, we propose that a new subparagraph be added to Article 28d (which should be Article 28c) with the following text:
“o) ensures, under transparent, non-discriminatory, and market-based conditions, the right of priority access for the persons referred to in Article 13a(1) to materials from collected single-use deposit packaging, proportional to the quantities they have placed on the market, under the conditions and in the manner specified in the ordinance under Article 13a(1).”
Along with the proposed amendments to the draft law, we note that the success of the system will depend to a decisive extent on the subordinate legislation that is yet to be developed.
According to the draft law, the ordinance under Article 13a must be adopted within six months. Given the complexity of the system and the many practical issues that need to be addressed, this timeframe requires an exceptionally careful, expert, and precise approach.
DEAR MINISTER,
We urge that, in finalizing the draft amendments to the Waste Management Act, attention be paid to several of the most important aspects that must not be overlooked:
Clarifying the Scope of Packaging and Beverages
Although the draft law refers to Article 50 of the European Regulation, it is necessary for the ordinance to provide a detailed and unambiguous definition of the scope of the deposit system, particularly with regard to the product categories included in it.
This is of key importance for the legal certainty of producers, avoiding differing interpretations, and the effective implementation of the system from its very inception.
Clarification of the conditions under which the obligated industry will be granted priority access to the deposit packaging collected in the system
In light of the above-mentioned proposed amendment to the draft law, we expect the secondary legislation to set out a clear mechanism and the specific conditions under which non-discriminatory access is granted to every Bulgarian beverage producer to a proportional amount of collected materials, including ensuring transparency in the distribution of materials and the possibility for long-term planning by the industry.
Control over deposit exemptions in the HoReCa sector
Pursuant to Article 18b of the draft law, no deposit is charged for beverages consumed on-premises in establishments. This exemption poses serious challenges regarding control and traceability. The regulation must establish clear, enforceable, and verifiable mechanisms to ensure that this exemption does not lead to circumvention of the system or to unequal treatment among participants.
Balanced Conditions for Retail Establishments
The draft law provides for the possibility that certain retail establishments may not participate directly in take-back under conditions to be determined by the ordinance. In this context, it is extremely important to take into account the specific characteristics of the Bulgarian market, which is characterized by a large number of small retail outlets that play a key role in consumers’ access to beverages. The requirements and exemptions should be clearly defined, practically applicable, and tailored to both the capacity of the establishments and the need for the system to function effectively.
We will be pleased to note that, upon completion of the process of final adoption of the amendments to the Waste Management Act and their entry into force, the legislative and executive branches have taken into account the expert positions and recommendations of the affected industry, as well as the business associations supporting them, such as the American Chamber of Commerce in Bulgaria.
We remain available for continued institutional and expert dialogue on the subject.
Documents: