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Taking Responsibility

By AICC Staff

March 20, 2023

In July 2021, Maine became the first U.S. state to require producers of packaged consumer goods sold in the state to finance municipal recycling programs. Known as extended producer responsibility (EPR) for packaging, the legislation was developed primarily to address funding and infrastructure deficiencies surrounding plastics recycling—yet all product packaging is subject to its directives, including printed paper, cardboard, and corrugated.

Other states have since followed Maine’s lead, passing their own EPR laws. Currently, proposed EPR legislation is being debated and discussed in many more. For boxmakers, this legal landscape has the potential for wide-ranging impact, from sales to pricing to production.

What Is EPR?

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EPR programs of one kind or another have existed in the U.S. for years, covering such products as batteries, pharmaceuticals, mercury-based thermostats, paint, and carpets. But there have been no established state-based programs regarding packaging. That is changing due to the efforts of a group of state lawmakers known as the EPR for Packaging Network, along with the National Caucus of Environmental Legislators and organizations such as the Product Stewardship Institute (PSI).

A 2021 PSI news release highlights the significant points of Maine’s new law, which has become a model for other states: “Under the new law, Maine’s Department of Environmental Protection will select and contract with a stewardship organization to operate a packaging stewardship program that will reimburse and assist municipalities in providing recycling services throughout the state. Brand owners selling packaged goods must pay fees on all packaging materials to the stewardship organization to fund the system (italics added) based on the costs of recycling for each material, including infrastructure investments or resident education needed to capture materials statewide.

“Producers will conduct an assessment of the statewide recycling system to determine the funds needed for the program, collection, and recycling infrastructure gaps in the state, and consumer education needed to ensure robust recycling,” the news release continues. “The law also provides an ‘on-ramp’ to the recycling system for more challenging packaging materials, allowing producers to establish, fund, and operate ‘alternative collection programs’ to facilitate reuse and recycling of these materials.

“This new packaging EPR program will generate recycling jobs, reduce greenhouse gas emissions from waste disposal, and address the inequitable environmental and health impacts of our waste system on vulnerable communities.”

Putting EPR within the context of the U.S. paper industry, Terry Webber, vice president of industry affairs for the American Forest & Paper Association (AF&PA), says, EPR “legislation introduced in multiple states—and passed in Colorado, Oregon, and Maine—would obligate producers, sellers, or brand owners of printing paper and/or paper packaging to pay for the end-of-life management of their products that flow into the marketplace.”

Exactly how that happens varies from state to state, based on the interests and needs of packaging manufacturers, regional waste and recycling companies, and local governments.

For example, one of the most common approaches so far—modeled in EPR bills for Oregon, Maryland, and Washington state—involves municipal management and reimbursement. Under this approach, local governments manage recycling operations and contracts, and a stewardship group (also known as a producer responsibility organization) reimburses them for the cost of vehicles, sorting, etc. In most cases, stewardship groups are funded by producers, who pay fees for the handling of certain stipulated products. While fee specifics are left up to the parties involved, producers typically are expected to pay more for products that are more challenging to recycle or have fewer end markets.

Another EPR option is known as full producer responsibility, wherein the stewardship organization manages the entire recycling process. Hawaii’s House Bill 1316 has been described as a full producer bill because it allows packaging producers to contract with counties for waste collection and management.

Although 2021 initially was touted as the breakthrough year for EPR legislation across the U.S., the COVID-19 pandemic slowed the momentum. Since then, a handful of bills have passed, some have gone to committee, and others seem to be languishing. At press time, however, EPR bills have been either passed into law or proposed in California, Colorado, Maine, New Hampshire, and Oregon. Webber anticipates seeing additional EPR legislation soon in Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, Rhode Island, Vermont, as well as other states.

Benefits of EPR

In an April 2020 white paper produced by the Northeast Recycling Council and Northeast Waste Management Officials’ Association, the authors noted various potential benefits provided by successful EPR programs, including:

  • Dedicated, nontaxpayer funding to support collection, recovery, recycling, and management;
  • Possible taxpayer relief for those who pay for recycling and management under the traditional system;
  • A system that enables states and, possibly, regions to take a more unified approach to strategic planning around recycling; and
  • Potential for increased investment in the end markets and recycling infrastructure.

In addition, depending on program specifics, producers may have incentives to improve packaging design to make it more easily recyclable and to incorporate higher percentages of recycled content.

“EPR laws for packaging and paper products can provide sustainable funding for recycling by shifting the burden from governments and taxpayers to packaging and paper product producers and brand owners,” the paper sums up. “These are the companies that decide what packaging and paper products are available on the market.”

As evidence of EPR efficacy, the paper highlighted Canada where provinces with EPR programs “have increased recovery rates, … bolstered recycling infrastructure, and grown strong markets for recycled material” and Europe “where EPR (for packaging only) has been established for decades,” leading to packaging recycling rates of 70%–80%.

“Other strategies, including voluntary product stewardship efforts, effect small, incremental changes in attempts to optimize the current system,” notes PSI in its Packaging EPR Tool Kit. “EPR is the only large-scale solution that takes an entirely different approach to create a much-needed, significant transformation in the entire system.”

Can One Size Fit All?

One aspect shared by almost all U.S. EPR legislation—proposed and passed into law—is an all-encompassing approach to packaging recycling that treats cardboard, corrugated, and printed paper the same as flexible plastic, metals, and sometimes even electronics and large appliances.

While acknowledging the clear benefits of improved recycling across the board, Webber sees this broad, one-size-fits-all approach as potentially too heavy-handed where boxmakers and the paper industry overall are concerned. It has the potential, he says, to create “onerous administrative and financial obstacles for the paper industry, which could affect our ability to make continued critical investments in recycling and manufacturing infrastructure.

“Paper is a highly recycled material made from a sustainable natural resource,” Webber points out. “More paper is recycled in the U.S. every year than plastic, glass, steel, and aluminum combined, and successful recyclers like the paper industry should be exempt from fees designed to improve the recycling rates for other less recycled products.”

How brand owners will pay these additional fees is left unsaid in the legislation. If they are not passed along to the end consumer through higher prices, they will need to be created through economizing elsewhere in the supply chain by using lower-cost materials or fewer materials overall and/or applying price pressure on boxmakers and packagers themselves.

It is also unclear whether such fees produce the intended results. “In British Columbia, often cited as the model EPR program, research has found no evidence that the steward-operated EPR program results in cost containment or increased recycling performance for paper,” Webber says.

America’s paper recycling system has inherent complexities that need to be understood and incorporated if EPR guidelines are to be truly effective, Webber says. So far, work still needs to be done in this regard, with the existing system being threatened by “poorly designed EPR legislation under consideration in several states. These EPR bills may upend paper recycling’s success because they fail to differentiate materials with high recycling rates and healthy end markets—like paper—from others that are difficult to recycle or have low recycling rates.”

For a better alternative, Webber points to California’s recent EPR legislation, State Bill (SB) 54, which was passed into law in June 2022. Webber calls it “landmark producer responsibility legislation.”

“SB 54 provides an ‘off-ramp’ for materials—like paper—that demonstrate robust annual recycling rates,” he says. “Any producer that can demonstrate to the state recycling agency that their product is maintaining a 65% recycling rate or higher before the program starts [or is maintaining a 70% recycling rate afterward] will be allowed to opt out of paying for participation in the larger producer responsibility organization. This first-of-its-kind ‘off-ramp’ is a notable policy mechanism,” Webber says, “as it seeks to reinforce market-based success and voluntary industry investment, an approach, which is in stark contrast to ‘one-size-fits-all’ EPR policies.”

Leading the Lawmakers

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Legislators may not realize the advances made by the paper industry when it comes to recycling, Webber notes, so they may see broad EPR laws as a necessary step. AF&PA is one of the organizations working to address that.

“We are encouraging policymakers to recognize the paper industry’s accomplishments, including our 68% national recycling rate for paper in 2021—a rate on par with the highest ever achieved—and our voluntary commitments to invest $5 billion by 2024 to enhance capacity to use recycled fibers in paper products by nearly 25%,” Webber says. “These critical contributions, totaling nearly $2.5 million per day, will continue to ensure a strong end market for recycled paper fibers collected in cities and towns across the U.S.”

He encourages boxmakers and other AICC members to help deliver this information to the nation’s lawmakers. “While AF&PA has taken the lead in opposing onerous EPR legislation, we cannot do it alone,” he says.

“We need industry support to engage and amplify our efforts. That’s where advocates for our industry can play an important role. All who have an interest in the success of our industry and paper recycling have the power to be effective and advance a sustainable future through advocacy engagement.

“The best conversations with policymakers start at the local level, and they want to hear from our industry,” he says. A key part of those conversations involves educating policymakers about the efforts and investments the paper industry has made to expand access to community recycling programs and create thriving end markets for recycled materials, both of which have contributed to increased recycling rates. At the same time, legislators need to understand “how poorly conceived EPR proposals could hurt industry investment and negatively impact paper recycling,” Webber adds.

“The industry needs your voice now more than ever. Your perspective can give policymakers knowledge on how our essential industry makes significant contributions to the circular economy and paper recycling. As we look to the future, our paper recycling system should serve as a model for how smart investments, policies, and regulatory decisions can expand access to recycling programs, increase recycling rates,

and create robust end markets for recycled materials.”


Portrait

Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.

 

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