If you’ve walked the aisles of a drugstore or scroll through skincare brand websites lately, you’ve probably noticed a shift. Every brand from indie clean lines to luxury heritage labels is hypoling its “zero-waste” serum bottles, “compostable” face cream jars, or “recyclable” packaging bundles. But as an eco-friendly skincare packaging supplier who’s spent the last six years sitting in on product launch meetings, sourcing raw materials, and fielding calls from small business founders who are scared they can’t swing the cost of switching, I’m here to cut through the noise: governments aren’t just talking about green packaging—they’re paying for it. No, this isn’t a scam or a loophole buried in 100-page policy documents. It’s real money, structured incentives, and programs designed to take the pressure off brands that want to do the right thing by the planet. Eco Friendly Skincare Packaging
Let’s start with the basics because I’ve heard too many packaging experts and brand owners dismiss these programs as “too complicated” or “only for big corporations.” The truth is, most of the major incentives are split into two buckets: tax breaks and grants, and extended producer responsibility (EPR) compliance support. For context, EPR is the rule that makes brand owners responsible for the end-of-life of their packaging, and many governments now offer ways to get paid or get reimbursed for meeting EPR requirements with eco-friendly materials. As a supplier, I’ve watched dozens of our clients—from a small California-based CBD skincare brand with 10 employees to a mid-sized organic line in the UK—tap into these programs to not only switch their packaging but actually save money on production costs.
Take the European Union, a region that’s been leading the charge on packaging rules for over a decade. The EU’s Circular Economy Action Plan, updated in 2020, has a suite of incentives that directly apply to skincare packaging. For example, Germany’s Packaging Act (Verpackungsgesetz) offers a “green bonus” to brands that use packaging made from at least 70% post-consumer recycled (PCR) plastic or are fully compostable. Last year, a client of ours in Berlin, a natural face oil brand, used this bonus to cover 35% of the cost of switching their traditional plastic droppers to PCR glass and compostable paper tops. They told me that without the bonus, they would’ve had to raise their prices by 12%—a move that would’ve pushed their target customers away. Instead, they kept prices the same and even launched a mini campaign highlighting the government support they received, which boosted their sales by 18% in six months. It’s a win that doesn’t get talked about enough: incentives don’t just lower costs, they give brands a marketing edge too.
The EU also has the European Regional Development Fund (ERDF), which offers grants for small and medium-sized enterprises (SMEs) that invest in sustainable packaging. Grants range from €5,000 to €50,000, and there’s no requirement to pay them back. A few years ago, we worked with a mid-sized organic skincare brand in Portugal that wanted to switch from single-use plastic jars to mushroom-based mycelium packaging for their body butters. The total project cost around €25,000, and they secured a €12,000 ERDF grant to cover the tooling costs and material testing. That grant was the difference between the project being feasible and being put on hold for another two years. What’s important here is that these grants aren’t just for brand owners—some countries also offer incentives to packaging suppliers like us to develop new sustainable materials. For example, Belgium’s Walloon Region gives R&D tax credits to suppliers that test or produce innovative compostable or PCR packaging. Last year, we used a 25% tax credit to fund our testing of seaweed-based packaging for face masks, which would’ve been out of our budget otherwise.
Now, let’s turn to North America, where incentives are a bit more state-specific but still very real. In the United States, the Inflation Reduction Act (IRA) of 2022 is a game-changer for sustainable packaging, even though most people associate it with solar panels or electric vehicles. The IRA offers a 30% tax credit for manufacturers that produce packaging made from recycled materials, and a 20% credit for brands that use 100% compostable or biodegradable packaging. For skincare brands, that means every bottle or jar they switch to PCR plastic or compostable plant-based material gets them a cut back on their federal taxes. A client of ours in Oregon, a clean skincare line that sells face serums and moisturizers, used this credit to save over $40,000 last year. They reinvested that money into expanding their product line, so it’s not just a one-time savings—it’s a long-term investment in growth.
Wait, I know what some of you are thinking: “That’s all for big brands. I’m a tiny indie brand with less than $1 million in annual revenue—do I qualify?” The answer is usually yes, if you look at state-level programs. California, which has some of the strictest packaging rules in the U.S., offers the Small Business Sustainable Packaging Grant Program, which gives grants up to $15,000 to brands with less than 100 employees. A small client of ours in Los Angeles, a brand that sells natural lip balms and body scrubs, used one of these grants to switch from plastic tubes to paper tubes with a compostable lining. They told me that the grant covered the entire cost of the tooling to adapt their filling line, which would’ve been impossible for them to afford on their own. They now sell 90% of their products online, and their packaging is one of their top selling points because it’s “locally funded by the California government to be zero-waste.”
Canada is another region with strong, underrated incentives. The federal government’s Green Circular Economy Fund offers contributions up to 50% of project costs for businesses that reduce plastic waste, and many provinces add their own bonuses. For example, Ontario’s Extended Producer Responsibility (EPR) for Packaging Program gives brands that use recycled or compostable packaging a discount on their EPR fees. Historically, brands that use traditional plastic packaging pay higher EPR fees to cover the cost of recycling or disposing of waste, but switching to eco-friendly packaging can cut those fees by up to 40%. A client of ours in Toronto, a body lotion brand, told me that their annual EPR fees went from $12,000 to $7,200 after switching to PCR plastic bottles, which freed up $4,800 a year to spend on marketing and product development. That’s a big deal for small brands operating on tight margins.
But here’s the thing that most people don’t tell you: navigating these programs isn’t as hard as it sounds, especially if you work with a packaging supplier that knows the system. Over the years, we’ve built relationships with policy advisors in every region we operate in, and we now offer a free 30-minute consultation to our clients to help them map out which incentives they qualify for. We’ve also created a simple checklist for our clients: first, check if your country or region has EPR discounts, then look for tax credits, then grants— in that order, because most of the time EPR discounts apply immediately, while grants and tax credits take a bit longer to process.
I want to address the elephant in the room, though. Some industry analysts argue that these incentives are just a way for governments to shift the cost of waste management from taxpayers to brands, and that many programs are only available to brands that can afford to apply, which leaves small indie brands behind. That’s a valid concern, and it’s why we’ve made it a priority to help even the smallest brands access these programs. For example, last year we worked with a group of three independent skincare brands in the U.K. to apply for a joint grant from the European Social Fund, pooling their resources to cover the application fee and work with a policy consultant. They all qualified, and each got a €8,000 grant to switch their packaging, which meant they didn’t have to compete with larger brands that have in-house policy teams.
Another common myth is that eco-friendly packaging is too expensive, and incentives don’t make a big enough difference to offset the cost. Let’s run the numbers for a small skincare brand selling 10,000 units a year. A traditional plastic dropper bottle might cost $0.80 per unit, while a PCR glass dropper with a compostable paper top costs $1.10 per unit. That’s a $0.30 difference per unit, or $3,000 a year. But if that brand qualifies for a 30% tax credit under the U.S. IRA, that’s $900 back. If they qualify for a California state grant for $5,000, that covers the tooling and part of the packaging cost, and if they get a discount on EPR fees of $1,000 a year, the net difference is almost zero. In some cases, the incentives even make sustainable packaging cheaper than traditional packaging.
Now, let’s talk about what’s coming down the pipeline, because if you’re a brand that’s been waiting to switch, now is the time. The EU’s new Packaging and Packaging Waste Regulation (PPWR), set to take effect in 2024, will make it mandatory for all packaging to be recyclable or reusable by 2030, and it will expand the green bonus to cover even more sustainable materials, including recycled cotton and plant-based waxes. In the U.S., several states are drafting their own EPR laws, including New York, Illinois, and Massachusetts, which will likely include discounts for eco-friendly packaging, following California’s lead. In Canada, the federal government recently announced $1 billion in new funding for circular economy programs, including packaging incentives. As a supplier, we’re already updating our material offerings to align with these new rules, and we’re working on a new tool that will let clients input their product type, location, and order volume to see exactly which incentives they qualify for.
At the end of the day, the goal of these government incentives isn’t to give brands a handout—it’s to drive systemic change. For too long, skincare packaging has been one of the biggest contributors to plastic waste, with the average product line going through 10 different packaging components that end up in landfills or oceans. Governments are using incentives to make sustainable packaging accessible for all brands, not just the big ones with big marketing budgets.
If you’re a skincare brand owner, a product manager, or someone who’s tired of the “sustainable packaging is too expensive” narrative, I want you to know: you don’t have to go it alone. As an eco-friendly skincare packaging supplier, we’ve spent years refining our process to make it easy for brands to switch, and we can help you navigate the incentive process to offset costs, speed up timelines, and make your sustainability goals a reality. There’s no catch, no fine print, just real programs designed to make the planet a better place—and help your brand thrive while doing it.
If you’re ready to learn more about how government incentives can work for your brand, we’d love to connect for a procurement discussion to walk through your specific needs, outline eligible programs in your region, and share our latest sustainable packaging solutions tailored to skincare lines.
Cosmetic Bottles References:
- European Commission, Circular Economy Action Plan, 2020
- German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection, Packaging Act Green Bonus, 2022
- U.S. Department of the Treasury, Inflation Reduction Act: Tax Credits for Sustainable Packaging, 2023
- California Department of Resources Recycling and Recovery, Small Business Sustainable Packaging Grant Program, 2022
- Government of Canada, Green Circular Economy Fund, 2023
Shanghai Medellin Technology Co., Ltd.
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