Compostable coffee capsules made of Solinatra.
Pods have made progress toward sustainability in recent years. But coffee companies will struggle with pending regulations in the critical European market.
In 2022, some 80 billion rigid single-serve coffee pods were sold worldwide. Of that total, only 27 billion were made from recyclable aluminum. Most of those aluminum pods — 80% — are made to be compatible with the Nespresso brewing system. The other two dominant systems — Dolce Gusto, and K-Cup — use various types of plastic, accounting for 53 billion pods in 2022. Yet only 4% were “biodegradable” or “compostable” in one way or another.
“It really is a very small figure, but it still is much, much bigger than what it used to be a decade or so ago when compostables were super, super, super niche,” explained Martyna Fong, director of market intelligence at, Applied Market Intelligence Ltd. (AMI), a consultancy focused on the plastics industry based in the United Kingdom. Yet, although the compostables segment continues to grow, it remains a drop in the vast ocean of rigid pods made from non-compostable plastics, predominantly polypropylene (PPL).
EU first
Regardless of whether pods are made from aluminum, PPL, or bioplastics such as industrially compostable polylactic acid (PLA) or the even newer, home-compostable polyhydroxyalkanoate (PHA), they will have to comply with regulations set by the European Union (EU). After all, Europe alone accounts for a whopping three quarters of total global sales of single-serve capsules across all systems and cup materials.
“Whatever happens in Europe has implications for the global industry,” Fong observed. Some of those implications are already looming on the horizon, thanks to the November 2022 revision of the EU’s Packaging and Packaging Waste Directive (PPWD). Although not yet passed into law, the revision encompasses two very important sections that are will not just influence the capsule industry but have the potential to make or break it.
Pods as 'packaging'
The Directive, in its original version, had exempted coffee pods from being treated as product packaging. The revision changes that. Capsules are now designated as packaging. That means they will be subject to the same rules for disposal as other types of packaging. If the revised PPWD becomes legally binding, companies that fill capsules must pay a packaging tax and comply with EU recyclability targets — or be made of compostable materials that fulfill mandatory composting requirements, according to Fong.
If these new PPWD provisions come into effect, one complication involves lids. Aluminum capsules would not be permitted to use lids made of PPL. Likewise, a PPL capsule would not be able to use an aluminum lid. And a PPL pod would have to omit use of a mix using too many other non-recyclable compound materials.
Access to waste disposal and recycling facilities also becomes a major concern. “Up until now, facilities simply could reject accepting spent capsules, as they weren’t considered packaging,” explained Fong. Under the revised PPWD, however, recyclers no longer can opt out. As for compositing, only a tiny proportion of single-serve capsules are made of compostable materials at all. And even among them, only a fraction are entirely compostable. Most have at least one non-compostable element, commonly the lid.
Conflicting logic
And there are more complications. Spent capsules are usually disposed of with the used coffee grounds inside. This organic matter is compostable. But what if is packed in a pod that is to be recycled? The material must be separated in order to comply with the composting requirement on the one hand, and the recycling rule on the other. "Ideally, we should be aiming at recovering that organic content to adhere to the mandatory composting requirements,” she explained.
By that logic, the preferred method for all capsules — cups plus contents — should be composting them. But, as Fong pointed out, currently less than 4% of the global market is in compostable solutions. The upshot is that the only way to comply with the compostability clause would be for the whole market to swap to compostable cups.
“This is really, really, really problematic for the industry” Fong said. It is indeed not only commercially impossible, but it's impossible technologically, because not all capsule designs can easily utilize compostables. As Fong remarked: “As long as capsules are recyclable — and aluminum is recyclable, so is PPL — why should you have to move to a compostable material?”
Dodging disaster
The capsule industry took issue with this, and began to lobby the EU, submitting a proposal for amendment in April. This proposal firstly requests that only those capsules that are disposed of without coffee grounds inside will be considered packaging under the PPWD; they would not be treated as packaging if they contain coffee when thrown away.
A second amendment asks to remove rigid single-serve capsules from the mandatory composting clause altogether. However, it left in flexible pods (like K-Cup, whose mesh is made of compostable material anyway) as well as coffee bags (i.e., brewing pads and drip bags) as well as conventional coffee filters. The amendment proposal will now have to undergo a final vote in EU parliament, expected in September.
Fong said she hoped that “doomsday for the industry will be averted” by the EU parliament voting to ratify the proposed amendments. If not, and the amendments are rejected, the industry will find itself in dire straits. Whichever version of the directive gets ratified will automatically become a regulation. That means that each and every EU member state would have to implement it to the letter and, as Fong puts it, “not interpret it in their own way.”
Further challenges lie ahead. Some EU countries have an adequate, well-oiled recycling and composting infrastructure in place. Others do not. “How can you then find a way to please everybody?” Fong asked. And then what about the EU’s Single Use Plastics Directive (SUPD)? Capsule manufacturers and coffee companies alike must wrestle with that requirement. Stay tuned.
Capsule Industry to Gather in Barcelona
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The crema of the crop of the world’s coffee industry will once again meet up at a major conference in Barcelona this September. Organized by AMI, the event serves as a forum for stakeholders to jointly analyze industry challenges and debate how to achieve sustainable progress. It also provides a stage to debate and evaluate the industry's global trends, innovations, and opportunities throughout the value chain of plastic and metal capsules.
Keynote speakers will provide delegates with in-depth insights on a broad variety of industry topics, including brewing and dispensing system innovation; smart technologies; capsule filling and molding technologies; material innovation, sustainability, and regulations; and consumer trends.
Attendees and exhibitors will include professionals from throughout the industry: capsule fillers, coffee roasters, capsule molders, material suppliers, technology and machinery suppliers, as well as companies expanding the scope of applications for single-serve capsules. The event takes place during September 26–28 at Barcelona’s Novotel Barcelona City hotel. For information, contact AMI – Applied Market Intelligence Ltd. at info@amiplastics.com.