The Estonian Competition Authority has concluded that the current system for the collection and recycling of deposit-free packaging waste suffers from serious market failures and requires systemic reform.
A brief analysis released by the Authority outlines a number of competitive barriers and inefficiencies, calling for legislative changes and improvements in transparency and oversight.
According to Kristin Truus, legal advisor at the Authority, 96% of packaging producers in Estonia have delegated their extended producer responsibility obligations to waste recovery organizations (TKOs), resulting in a concentrated market with limited competition. The analysis highlighted structural issues, such as restricted market access for new waste management companies and low transparency in procurement processes, often favoring legally affiliated service providers.
Risks of vertical integration and conflicts of interest were also noted, particularly in cases where waste management firms maintain long-term legal and financial ties with specific handlers. Additionally, concerns were raised about the dominance of a single waste transporter, which may distort competition through its control over waste collection at the point of generation.
The Authority further pointed to gaps in data availability, traceability of recycled material, and opaque distribution of packaging waste among service providers. These deficiencies hinder effective competition and monitoring of market shares.
In response, the Authority issued several recommendations aimed at improving competition and accountability. These include lowering barriers to entry, enhancing the transparency of selection processes, ensuring fair allocation of packaging waste, and reinforcing the independence of waste management firms. Legislative amendments to the Packaging Act have also been proposed within the framework of the ongoing waste reform.
As part of its findings, the Authority launched a state supervision procedure to investigate potential abuse of dominant position in the packaging waste transport sector.
The full analysis is available on the Estonian Competition Authority’s website. The agency operates under the Ministry of Justice and Digital Affairs and is responsible for oversight in a range of sectors, including competition, energy, water, transportation, and food supply chains.
