The European Commission may hold off from taking legal action against Germany over its controversial new recycling scheme following talks between the two parties.
According to a report from Dow Jones, EU Commissioner Frits Bolkestein and Germany's environment minister Juergen Trittin have been working hard to find a compromise position and remove the threat of legal action.
The Commission had given Germany until today to introduce changes to the legislation governing the return of one-way containers on the grounds that they favoured local companies - most of the one-way containers sold in Germany come from other countries, while German producers use mainly recyclable packaging.
The report suggests that the Commission has not yet taken a decision regarding the threat of legal action, but that both sides are confident that an agreement can be reached without recourse to the courts.
The new ruling has had a major impact on brewers and soft drink producers in Germany, as they are the main users of non-returnable packaging. Unlike the existing scheme - for reusable packaging - there is no nationwide network of collection points for the bottles and cans, obliging consumers to return the packages to the store where they bought them to claim their deposit.
This has led many retailers to simply remove all one-way packaging from their shelves, in turn impacting sales of these products.
Germany has argued that the system has to be tough in order to achieve its aim - persuading producers to switch to the 'greener' reusable packaging - but the Commission was concerned that it was simply restricting sales of products imported from elsewhere in the EU, the vast majority of which are still packaged in one-way containers.
The Commission demanded that the Berlin authorities at least put in place a collection system for non-returnable packaging which would make it easier for consumers to return the packs, and while this is yet to materialise, the government has agreed to allow packs to be returned to any retail outlet, rather than just the one where the product was originally bought.
Whether this will be enough to pacify the Commission remains to be seen, especially since it is still dependent on the goodwill of the retail sector, which has been highly critical of the programme thus far. Many stores have already threatened to refuse to accept packaging bought elsewhere, and most are still boycotting one-way packaging in the first place.
The German government is thus facing not only the threat of legal action from the Commission but a major revolt from its important retail and beverage sectors - leading store operators such as Metro and brewers such as Holsten have already complained at the cumbersome system, and winning over important companies such as these could be just as hard - if not harder - than convincing the Commission.