Belgian Competition Authority Clears Early Adoption of Compostable Coffee Pod Requirement

Belgian coffee suppliers ended 2025 on an environmentally high note, as they agreed to commercialise only compostable coffee pods 18 months ahead of a legal deadline. When they asked the President of the Belgian Competition Authority (BCA) for their informal opinion on this commitment, they concluded it falls outside the scope of the prohibition on anti-competitive agreements under Belgian and EU law. 

The opinion offers practical guidance for companies seeking to coordinate early compliance with environmental legal requirements. 

Committing to compostable coffee pods

Major coffee brands and supermarket chains launched an initiative to advance by 18 months the implementation of a packaging waste requirement under the EU's Packaging and Packaging Waste Regulation (PPWR). Specifically, the coffee suppliers commit to commercialising exclusively industrially compostable coffee pods in Belgium from 12 August 2026, rather than waiting until the statutory deadline of 12 February 2028. Together, the participating companies represent over 90% of coffee pods sold in Belgium.

According to the applicants, approximately 80% of coffee pods currently sold are compostable, whilst the remaining 20% do not. As a result, no coffee pods ended up in compostable waste streams. Both types are currently discarded via residual waste streams and the Flemish Public Waste Agency (OVAM) indicated it would revise household sorting instructions to direct coffee pods to organic waste collection only once industry-wide compostability is achieved. 

The early adoption would divert approximately 4,600 tonnes of coffee pod waste annually from residual to organic streams during the 18-month period, reducing contamination and accelerating Belgium's transition to a circular economy ahead of the EU-mandated timeline.

Incoming requirements under the PPWR 

The Packaging and Packaging Waste Regulation (PPWR) entered into force on 11 February 2025 and will be generally and directly applicable on 12 August 2026. It sets out sustainability and labelling requirements for packaging throughout its life cycle, including production, use and waste management, and aims to: (i) prevent unnecessary packaging and promote reuse, refill, and recycling; (ii) harmonise national measures to avoid trade barriers and competition distortions; and (iii) contribute to the circular economy and climate neutrality by 2050. 

The PPWR applies to all types of packaging, regardless of the material used, and to all packaging waste, whether packaging is used in, or its waste originates from, industry, manufacturing, retail or distribution, offices, services or households. Packaging that does not comply with PPWR can no longer be placed on the market. A key aspect of PPWR is that, from 2030, all packaging should be recyclable. Recyclable criteria and performance indicators are expected to be defined by 1 January 2028 through delegated legal acts. Furthermore, the PPWR introduces various information and labelling requirements on recyclability and proper disposal.

The PPWR also imposes an extended producer responsibility (EPR) obligation on ‘producers’ of packaging (waste), meaning that producers of, amongst other things, coffee pads, are both financial and organisational responsible for the entire lifecycle of their product, e.g. collection, recycling etc. While EPR obligations apply to individual producer, many companies opt to fulfil these obligations collectively via a producer organisation (PRO). 

Crucially, any cooperation between competitors aimed at fulfilling their obligations under the PPWR must comply with competition law rules.[1] It is in that context that the coffee pod producers and supermarkets asked the BCA for guidance on their intention to collectively fulfil their PPWR obligations ahead of the legal deadline. 

Competition law analysis: why the commitment falls outside the scope of the prohibition on anti-competitive agreements 

Sustainability agreement necessary to achieve the intended environmental goals

The BCA considered the producer commitment constitutes a sustainability agreement pursuing environmental objectives in the sense of the Commission’s Horizontal Guidelines.[2] It found that by ensuring near-universal compostability 18 months early, the agreement eliminates consumer confusion regarding disposal and enables clean separation of coffee pod waste into organic streams, facilitating composting and biogas production whilst improving residual waste stream purity.

The BCA also considered collective action necessary in light of OVAM conditioning revision of household sorting instructions on industry-wide compostability. In light of these statements, the authority was of the view that individual initiatives would not suffice to trigger the operational changes required to realise the intended environmental benefits.

No appreciable restriction of competition 

The BCA further found that the commitment is unlikely to restrict competition appreciably for four reasons:

1. Advance compliance with legal obligation – The commitment is exclusively directed at ensuring compliance with a binding EU obligation before its application date. As such, the BCA characterised it as "essentially comparable" to compliance agreements. The short 18-month interval, temporal limitation of the commitment to the date of entry into force of the legal obligation (12 February 2028), and its sustainability purpose justify this treatment.

2. No appreciable reduction in choice for coffee pods – The commitment temporarily affects only packaging type, whilst other competitive parameters, including price, quality and functionality, remain unconstrained. The only competitive parameter which will temporarily be affected is the product variety, but this was not considered to appreciably restrict consumer choice.

3. Price increase risks negligible – According to the coffee pod producers, costs related to switching to compostable pods are minimal (less than €0.01 per 40-pod package). This one-off cost was considered negligible, especially in light of the fact that, upon entry into force of PPWR, Belgian PRO Fost Plus will charge significantly higher (6.5 times) tariffs for packaging non-recyclable packaging. Taken together with the fact that the commitment contains no agreements on retail prices or cost pass-through, the BCA considered that risks on price increases for consumers are negligible.

4. Other aspects – The BCA furthermore verified that the commitment involves no exchange of competitively sensitive information, no foreclosure of non-participating producers, and no restriction on members pursuing more ambitious individual sustainability initiatives.

The President concluded that the commitment entails insufficient risk of appreciably restricting competition and therefore falls outside Article IV.1 of the Belgian Code of Economic Law (BCEL) and Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). 

The opinion's informal character means it binds neither the BCA Auditorate, Competition College nor Belgian or EU courts. However, such opinions may nevertheless offer parties comfort that their agreement is highly unlikely to catch considerable scrutiny. 

For more information on the BCA's draft guidelines on sustainability agreements, we refer to our previous article.

Key takeaways 

• Safe harbour for early regulatory compliance – The opinion confirms that collective agreements to implement binding EU sustainability obligations ahead of statutory deadlines may benefit from treatment analogous to compliance agreements, within certain parameters.
• Willingness to provide guidance – The opinion demonstrates the BCA's willingness to engage with parties seeking guidance on cooperation mechanisms that genuinely further societal interests without adversely affecting consumers. This may prove particularly valuable for more risk-averse members of PROs or trade associations, who may require a certain level of comfort from the authority before agreeing to engage in this type of agreement.

If you need more information or further guidance in this area, please contact Baptist Vleeshouwers, Sander Wagemakers and Claire De Neve.

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