Making EPR Work

Strategies for making EPR successful for all stakeholders from the 2023 AMERIPEN Annual Summit.
By Dan Felton

Packaging value-chain stakeholders, environmental regulators, elected state officials, and others gathered in Alexandria, VA, for AMERIPEN’s 2023 Annual Summit during the first week of May for thought-provoking discussions on a range of issues, with extended producer responsibility (EPR) often taking center stage. That is for good reason: four U.S. states have enacted EPR laws—California, Colorado, Maine, and Oregon—and nearly 40 EPR-related bills in 15 U.S. states have been under consideration this year.

While these laws are not alike and will likely become more distinct after rulemaking, they do share a foundational approach in which brands that put packaging on the market (producers) become financially and, in some cases, operationally responsible for the end-of-life of their products. The pending U.S. laws require producers to join a producer responsibility organization (PRO), sometimes referred to as a stewardship organization, which manages the program and collects fees from the producers to fund the collection, sortation, and processing of covered products, or materials, that are defined by the law or the program itself. This approach is believed to help brands advance goals for circularity by linking them to both design and end-of-life, creating a system that offers direct feedback on material recycling so that producers become more circular in their approach to their products and packaging by considering the entire product lifecycle.

Most stakeholders across the packaging value chain agree that investing in reuse and recycling systems is necessary in most situations, but not all agree on how best to finance these improvements, or what changes are most needed now. The Summit offered a neutral space for candid and collaborative conversations about the packaging industry’s future in a truly circular economy. As a packaging trade association representing the entire packaging value chain—from raw material providers to haulers and recyclers—AMERIPEN included stakeholders from different countries and industries to discuss strategies for developing and implementing successful EPR programs, drawing on expertise from advocacy specialists, professionals in the midst of developing their own state programs, and experts from Canada and Europe, which have had EPR regulation in place for a decade or more.

Discussion Takeaways
Although the event was closed to the public and media, the following are general highlights and takeaways from those talks that could be of particular interest to waste haulers and materials recovery facilities (MRFs):

1. A single PRO with oversight from a broad stakeholder advisory council was recommended as the preferred structural approach. PROs/stewardship organizations are organizations run and led by the producers that pay EPR fees. They are typically responsible for collecting and distributing fees, ensuring recovery and recycling targets are met, promoting eco-friendly design, educating the public on packaging waste prevention, verifying data, and reporting to government authorities about success in meeting goals. PROs can have significant influence on how packaging recycling will be run, where materials are sold, and who gets service contracts.

Panelists who have experience with the established EPR programs in Europe and Canada, and with other materials beyond packaging, agreed that in executing those responsibilities, a single-PRO system reduces complexities and conflicting management. The PRO needs to be transparent in its fees collection and funding distribution, as well as the materials involved, to build industry and consumer confidence with packaging recycling. The PRO itself should be “influential”; its programs should solve for all stakeholders to not only financially benefit, but also meet targets and goals for packaging recovery. More generally, the PRO should be focused on best practices and solutions that spur positive recycling and waste reduction behaviors, increase packaging recycling and recovery, recapture material values, and limit administrative costs.

While PROs are designed to be owned and run by those that pay EPR fees—the brands—all speakers noted that for a PRO to accomplish its duties in a responsible manner, a diverse advisory council of experts who collaborate with and understand all stakeholder needs—and who are committed to efficiency—is beneficial to the success of the PRO. This means including representation from raw material providers to haulers and recyclers. In Oregon, for example, the state has legislated for the creation of a 17-member advisory council, plus two non-voting members, to ensure that voices from across the value chain, and not just producers, are heard. The council cannot adopt any recommendations without a majority vote. (AMERIPEN was appointed to a three-year term on the council last year.) Not all states have this approach. However, as PROs are established, AMERIPEN advises the waste community to continue to reach out and request a formalized process to ensure its voice helps inform the PROs’ strategies and future
policies.

2. Collaboration is key, and compromise is vital to winning the long game. As EPR empowers producer-led PROs to make many key decisions regarding packaging waste and recovery, it is widely accepted that they will not be able to make all stakeholders 100 percent happy, but they should be transparent and prepared to backup why all needs cannot be met and how they attempted to work with stakeholders to avoid unintended consequences.

3. New programs should incorporate existing infrastructure. What EPR will actually look like depends on the markets where it is being implemented, the types of materials used, and whether they are developed or still developing recycling markets. On several occasions, participants and panelists discussed the need for increased infrastructure investment to meet recycling targets. In fact, during a live poll of participants, “investing in infrastructure improvements” ranked highest (48 percent) as the primary purpose of an EPR program.

Because circularity of packaging materials is the primary goal for many brands and states seeking to implement EPR programs, there is strong interest in using funds to improve sortation and end markets to improve the quality of recycled material to meet packaging-specific needs. Participants and attendees also deemed investments in technologies to help effectively incorporate hard-to-recycle materials as a priority. This injection of funds is seen as positive support to the reprocessing community and will help brands and states meet recycled content goals/mandates as well as help launch the U.S. waste and recovery system into a global leadership role by developing systems and technology to handle some of the most difficult materials in the recovery system today.

4. Regional or federal legislation is needed to gain uniformity of definitions and rules. How we define recovery terminology will impact how different states implement EPR and could restrict efforts to harmonize programs at a national or regional level. Across the U.S., different definitions for recycling exist. For example, some of the definitions include composting, some exclude advancements such as chemical recycling, and so on. This inconsistency in how we define packaging and recovery leads to disparate efforts by the states and confuses consumers. As federal efforts like the Federal Trade Commission’s “Green Guides” and EPA’s National Strategy to Prevent Plastic Pollution draft evolve, and disparate state legislation concerning recyclability messaging emerges, we risk increased consumer confusion and further complication of an already challenging market environment.

For example, a new labeling law in California (SB343, adopted in 20211) deems the use of the resin identification code (RIC), in combination with chasing arrows, as deceptive or misleading unless the state considers the packaging material recyclable based on information and requirements to be set forth by the state. This new law contradicts laws in 36 other states2 where failure to include the RIC in combination with chasing arrows could result in state or private enforcement actions. This inconsistency in definitions and recycling guidance now places packaging designers in an untenable situation where they may be forced to design packaging on a state-by-state basis and develop stringent chain-of-custody procedures to ensure packaging designed for one state does not enter another. Otherwise, they risk violating state law. Furthermore, this inconsistent use of the RIC could challenge reprocessors that rely on that information to help sort materials. We all need consistency among the states to better define how we design, sort, and reprocess material, as well as educate the public.

5. This dialogue is essential to ensuring EPR can achieve the desired outcomes we all seek. Presenters at the Summit reinforced that early engagement with system-wide stakeholders is essential to design equitable EPR programs from the outset rather than amending later on. As states move into rulemaking and introduce additional new bills, stakeholders across the packaging value chain must also be at the table to share their information and concerns, explain unintended consequences, and negotiate viable solutions. The waste community is a vital part of this dialogue and can help inform how EPR programs, now and in the future, are structured and financed for greater efficiency and best possible outcomes.

Everyone Must Be Engaged
EPR is a legislative proposal that will impact many stakeholders across the packaging value chain. While it has been designed with the end goal of making producers responsible for their packaging from design to end-of-life, understanding and designing a system to avoid unintended consequences cannot happen unless the voices of all those engaged in the packaging value chain, including the waste and recovery community, are at the table. We need the waste community to continue to proactively engage to ensure we can design these programs effectively from the outset and protect their investments. AMERIPEN will continue to be at the forefront of educating its members and advocating on behalf of the packaging value chain (including the waste community) to ensure any current and new responsibility laws are as reliable, efficient, equitable, and fair as possible. Please join us to learn more about EPR in the U.S. by attending our webinar series, “Packaging EPR Has Arrived in the U.S. – Now What?” and consider engagement with waste-related trades and others, like AMERIPEN, to be part of the EPR conversation. | WA

Dan Felton is Executive Director of AMERIPEN – the American Institute for Packaging and the Environment. The association represents the U.S. packaging value chain by providing policymakers with fact-based, material-neutral information. He can be contacted at [email protected].

Notes
1. California Senate Bill 343, adopted October 5, 2021, available at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB343.
2. Alaska • Arizona • Arkansas • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Nebraska • Nevada • New Jersey • North Carolina • North Dakota • Ohio • Oklahoma • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Virginia • Wisconsin (per “Recycling Labelling Laws Today” Truth in Labeling Taskforce (OR DEQ)