The Extended Producer Responsibility Act (EPR), known as the LUCID Act in Germany, is transforming the way small businesses around the world operate when selling to the European Union. Although my jewelry workshop is in Mexico, these regulations have reached me, and I want to share with you how they affect micro-enterprises like mine, as well as reflect on their implications and the challenges they present.
What is the LUCID Act and the EPR?
The LUCID Act, part of the EPR, seeks to make producers responsible not only for the products they sell but also for the waste generated by packaging. In theory, this encourages recycling and the circular economy, something I fully support. However, its implementation presents enormous challenges for those of us who run small, one-person businesses.
Currently, this law is active in Germany and France, with variations in Austria and Spain, and it is expected that it will eventually apply throughout the EU. Even the United Kingdom, after Brexit, could adopt a similar regulation. The tricky part is that each country has different requirements, which multiplies the administrative burden for those of us who sell to multiple countries.
What does complying with the LUCID Act entail?
For those of us who sell to the EU, complying with this regulation involves:
- Registering with the government of each country where you sell. This includes obtaining a unique registration number in each territory.
- Obtaining a shipping license in each country. This permit is mandatory to operate within local regulations.
- Paying recycling fees in advance. This requires calculating the volume and type of packaging to be sent to each country and paying an advance fee.
- Reporting the quantities sent at the end of the year. It is necessary to accurately report the actual volume of packaging sent and, if the initial calculation was exceeded, cover the difference.
The challenges for a microenterprise
These obligations, designed for large companies, do not make a distinction in costs for those of us who use recycled, compostable, or sustainable packaging. In my case, I was already using these materials before the law existed, but I did not get any advantage from it. In addition, the implementation of the EPR leaves the management of recycling in the hands of private companies, which means that these regulations must be profitable for them. This generates high costs and few affordable options for micro-enterprises. The governments that implement them, for their part, do not offer subsidies or support for those of us who have low shipping volumes, which leaves us at a disadvantage compared to large corporations.
High costs: Recycling services are usually expensive, especially if you handle low sales volumes.
Administrative burden: Registering your shipments in each country, and calculating and reporting your packaging consumes time and energy, resources that are often limited for those of us who work alone.
Unequal competition: While large companies such as Amazon or Temu can absorb these costs thanks to their enormous sales volumes, micro-enterprises face barriers that make it difficult to compete in the international market.
My experience as a microentrepreneur
Since 2022, I have registered in Germany and have complied with the Lucid Law because I believe in environmental responsibility. Sustainability has always been part of my brand, and my jewelry workshop has always sought to be ethical, fair, and sustainable. However, the outlook is getting more complicated. Now I decided not to renew my license for 2025, since on December 13, another regulation came into force that makes it even more difficult to continue selling to the European market: the General Product Safety Act (GPSR). This law, together with the EPR, further complicates the outlook for small businesses that want to sell to the EU. If you want to know more about the GPSR and how it affects microenterprises, you can read the post I wrote on this topic [here].
As a micro business, I do everything I can to reduce my environmental impact: I use recycled materials, design sustainable packaging, and work under the fair trade model. But the irony of these laws is evident. While small brands like mine face these challenges, companies that produce low-quality, high-environmental-impact goods dominate the market without much difficulty.
How am I adapting? I have taken several measures:
- Cancel shipments to the European Community: Although I love that my pieces reach different corners of the world, I have had to limit the countries to which I ship to better manage costs and administrative burdens.
- Strengthen local markets: I am focusing more on my country, Mexico, and the rest of North America, where regulations are different and I can operate with greater freedom.
- Communicate clearly: I have learned to explain to my international clients how these laws affect shipping costs and to keep them informed about any changes.
Final thoughts
The EPR and the LUCID Act remind us of the importance of being responsible for our environmental impact. The intention of these laws may even be admirable: a world with less waste and more recycling. But in practice, they demand solutions that are not always viable for those of us who work on a small scale. For those of us who handle everything—design, production, sales, and shipping—these regulations can be daunting, as they show how regulations designed for large companies can block sales options for micro-enterprises.
At the end of the day, sustainability should not just be an individual responsibility, but a joint effort where governments, companies, and consumers work together.
By the way, if you want to delve deeper into this topic, I recommend the documentary Buy Now, which explores the reality regarding recycling by large companies and developed countries, greenwashing, and the impact of our consumer choices.
If you have a small business and you also face these challenges, I would love to know how you are handling it. I believe that together we can find ways to adapt and move forward, even in a world full of challenging regulations.
Thank you for reading and for supporting those who doos las cosas en pequeño, pero con mucho corazón!
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