(EPR) model approach

Recycling has been the subject of many negative headlines over the past two years: “The World’s Recycling is in Chaos;” “RIP: Recycling is Dead as We Know It;” “Recycling is a Waste.” The list goes on. Of the communities surveyed in The Recycling Partnership’s 2019 “The State of Curbside Recycling” report, more than 50 have canceled their recycling programs, and 29 percent have stopped collecting certain items.

It is undeniable that the past few years have presented unprecedented challenges to recycling globally. In the United States, costs are at historic highs, and revenues are at historic lows. And yet, the public, for the most part, still wants to recycle, and many manufacturers depend on recycled feedstock.

Consumer brands are responding with increasing commitments to design for recyclability and to use more recycled materials. But these commitments are not driving increased collection of the materials needed to meet those goals. In fact, current and projected demand for recycled content far outstrips the supply of key recyclables, including plastics such as polyethylene terephthalate, high-density polyethylene and polypropylene.

How can these diverging trends be reconciled? A growing chorus is pointing to extended producer responsibility (EPR) legislation for printed paper and packaging (PPP) as a solution.

What is EPR?

EPR is a practice and a policy approach in which producers take responsibility for managing products and/or packaging they produce at the end of their useful lives. Responsibility may be fiscal, physical or a combination of the two. EPR shifts the financial burden of recycling from the ratepayer or government to the producer and consumer of the products and packaging being recycled. The theory behind this approach to materials management dates to a 1990 report by professor Thomas Lindhqvist of Lund University in Sweden that suggests the internalization of end-of-life costs would encourage more environmentally friendly design.

In these times of challenging recycling economics, EPR presents a sustainable financing model for managing materials that does not rely on local governments and/or ratepayers to make up for revenue. The stable funding provided through EPR mitigates market risk for local recycling programs as producers are obligated to cover the costs of recycling (or a designated portion thereof) regardless of the revenue generated from the recovered commodities. In down years, the added cost burden would be placed on producers, which would pay higher fees to fund the system; in up years, their fees would decrease. Through these ups and downs, recycling programs would function uninterrupted.

A producer responsibility organization (PRO) is created by the producers (brands/retailers) for the purpose of meeting their EPR obligations. PROs develop and execute a program plan to comply with legislative/regulatory requirements and also set and collect fees from producers to finance those activities.

EPR also appeals to circular economy advocates, and sometimes to the brands seeking to increase use of recycled materials, as it allows producers to manage the recycling system like a supply chain by more directly connecting recycled commodities with production.

How common is EPR?

EPR is not a new concept in the U.S., though it has typically been applied to hard-to-recycle materials. Twenty-six states have EPR policies for electronics, and several programs have been established for hard-to-recycle items, such as paint, mercury-containing thermostats, mattresses and batteries. Beverage container deposit systems are also a form of EPR that is in place in 10 states. However, EPR for PPP collected through municipal recycling programs is not currently in place in the U.S.

EPR for packaging was first implemented in Germany in 1991. It spread throughout Europe in the 1990s and is now required in all EU member states.

Implementation of EPR for packaging in Canada began in 2003 and has been adopted by most Canadian provinces.

Today, nearly all Organization for Economic Cooperation and Development countries, with the exception of the U.S., rely on EPR to finance PPP recycling. This trend combined with the perfect storm of economic conditions that challenge recycling have sparked growing interest in EPR in the U.S.

Will states adopt EPR for PPP?

Some states could see EPR legislation garner serious consideration in either 2020 or 2021:

Maine. In 2019, the Maine legislature passed a resolution (LD 1431), pursuant to its framework EPR legislation, directing the Maine Department of Environmental Protection (DEP) to develop draft EPR legislation for PPP in time for the 2020 session. The DEP issued a draft packaging EPR bill to the legislature in early 2020 that outlines a municipal reimbursement program, modeled on Quebec’s system. The legislation is currently being considered by the Maine Legislature.

New York. Chairs of the New York State Senate and Assembly Environmental Conservation Committees introduced competing EPR bills for packaging in February. The Senate bill seeks to create a comprehensive EPR program for PPP where municipalities can choose to provide service and be reimbursed by producers, or producers can provide service directly. The Assembly bill initially focuses on plastic packaging and expands to cover paper and other materials in future years.

California. The California Circular Economy and Pollution Reduction Act (SB 54), which was considered during the 2019 legislative session, came very close to enactment during the final days of the session in September 2019. It was expected to be taken up in early in the 2020 legislative session. However, a ballot initiative that proposes several of the same provisions as those contained in SB 54 was submitted for inclusion on the 2020 election ballot. The initiative was collecting signatures (960,000 are needed) by April 21 to place this on the November ballot.

Recology, a key recycling company in California, supports the initiative, as do many environmental advocacy organizations. It had been assumed that the proposed ballot measure may encourage swift legislative action on SB 54 in 2020, but that has not occurred to date.

Washington. Following the consideration of legislation in 2019 that addressed single-use plastics and contained a provision for EPR, studies that included policy analysis with an emphasis on EPR were initiated by the city of Seattle and King County as well as by the Washington State Department of Ecology. Given the study timelines, it is expected that any EPR legislation for packaging will be considered in the 2021 legislative session.

Oregon. The Oregon Department of Environmental Quality (DEQ) is conducting an analysis of policy options (referred to as Legal and Relational Frameworks) to modernize recycling in the state. Oregon is evaluating five different options (scenarios), three of which use EPR constructs that draw from various programs worldwide. The five options under evaluation will be narrowed through analysis and consideration by the multistakeholder advisory committee in the spring. Any legislative action that might result from the study could be seen in 2021.

National. In February of this year, following a year of discussions with stakeholders, Sen. Tom Udall (New Mexico) and Rep. Alan Lowenthal (California) introduced the Break Free from Plastic Pollution Act. This proposed legislation incorporates a number of provisions, including EPR for PPP, a national beverage container deposit program and bans on certain single-use plastics.

Although we are witnessing some state- and federal-level interest in EPR legislation as a method for sustainably financing PPP recycling, a majority of U.S. communities continue to try to maintain their programs within the current system. Whether EPR is the solution, serious discussions around the U.S. recovery system are taking place, and the time for significant solutions has come.

Resa Dimino is a senior consultant with RRS (Resource Recycling Systems), headquartered in Ann Arbor, Michigan, and can be contacted at resa@recycle.com. Bryce Hesterman is a consultant with RRS and can be contacted at bhesterman@recycle.com. More information on RRS can be found at www.recycle.com.