The obligation to maintain packaging accounting begins when packaging is placed on the market for the first time. The purpose of this requirement is to ensure that a company has a clear overview of the types of packaging generated in the course of its activities and how the related obligations are fulfilled. In practice, this means transparent and traceable accounting that reflects the actual packaging mass and its movement.
The obligation to undergo a packaging audit applies to a more limited group of companies, namely those whose annual packaging mass placed on the market exceeds 20 tonnes. The audit requirement is not continuous but applies on a cyclical basis. Under the Packaging Act, companies that have received an unqualified auditor’s opinion may be exempt from a statutory packaging audit for the following three years. As a result, companies whose packaging accounting was last subject to a packaging audit in 2020 entered a new audit cycle last year. This brought packaging audits back into focus for many organisations and provided an opportunity to assess whether packaging accounting has remained consistent and has kept pace with interim changes.
In practice, questions tend to arise not so much from the existence of the obligation itself, but from whether packaging accounting has been established as a continuous process that supports the company’s day-to-day operations. Where accounting has been treated merely as a reporting exercise, it tends to lose alignment with reality quickly in a changing environment.
Packaging accounting is based on a clear understanding of what constitutes packaging and how it arises within a company’s activities. Generally, sales packaging, grouped packaging and transport packaging are distinguished, but the purpose of this classification is not merely formal. It helps to understand and map the process and identify the stage at which packaging enters the company’s area of responsibility.
Confusion around classification often stems from viewing packaging solely as a physical object rather than as a function. In reality, neither size nor material determines whether something qualifies as packaging – packaging may be a small binding or fastening element or a wooden pallet, provided it fulfils a packaging function in the handling or marketing of goods.
Packaging enters accounting at the moment it is placed on the market for the first time by the company. This most commonly occurs in connection with imports or the packaging of products during the company’s own operations. Reusable packaging, such as wooden pallets, also requires careful consideration, as the accounting treatment depends on whether and how the conditions applicable to reusable packaging are met.
When packaging that has been placed on the Estonian market for the first time in the course of business activities is collected and resold, the obligation to declare it does not cease. As a general rule, the mass of resold packaging may not be excluded from declarations. If a company is able to collect packaging waste arising from imported packaging and direct it to recycling itself, it is possible to declare the imported packaging mass directly to the Packaging Register on the basis of recycling certificates. When fulfilling recycling obligations independently, it is essential to ensure that the required recycling certificates are available and compliant.
Most companies fulfil their packaging obligations through a recycling organisation, which enables compliance with statutory recycling requirements. However, this does not replace the need for the company’s own packaging accounting.
Packaging accounting works best when it is maintained consistently. During packaging audits, we have observed that companies undergo constant change: personnel, suppliers, products, packaging and information systems evolve over time. These changes represent key risk areas that must be addressed on an ongoing basis.
Inconsistencies may also arise where accounting is based on simplified methodologies or proportional allocations that were justified at the time they were introduced. If such approaches are not reviewed regularly or adjusted in response to changes, the clear link between source data and actual packaging mass may be lost. In such cases, packaging accounting becomes difficult to verify and loses transparency, increasing risks in the context of a packaging audit.
Situations identified during recent packaging audits were primarily related to internal changes within companies that had the greatest impact on the consistency of packaging accounting. Staff turnover and loss of knowledge, new products and packaging, and system changes led to situations where previous accounting logic was no longer appropriate.
Mitigating these risks requires a strong internal packaging accounting policy, or self-monitoring system, which defines the accounting methodology, responsibilities and process chains. Such a system helps ensure that packaging accounting remains consistent and auditable even during periods of change.
Well-functioning packaging accounting is clearly structured and transparent. Excessive complexity without substantive added value may increase administrative effort and weaken the link between accounting and actual circumstances. A clear connection between packaging, quantities and mass forms the basis for verifiable and reliable accounting and supports timely and accurate declarations. Clearly documented packaging accounting helps companies strike a balance where obligations are met in compliance with requirements, accounting remains auditable, and administrative costs are kept at an efficient level.
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