A tale of two countries

Like elsewhere in the world, extended producer responsibility (EPR) for packaging continues to be at the center of waste management strategy policy discussions in North America. While Canada has formalized EPR programs in several provinces over the past 10-plus years and has potential new programs in development, the United States has yet to pass a packaging EPR bill on a state or federal level.

Following is an update on existing EPR programs and legislative proposals throughout North America.
 

Canada expands packaging programs

Stewards in Canadian provinces saw many changes to EPR programs for packaging this past year, including rising costs and the expansion of small business exemptions.

Costs Rise. In Ontario, stewards paid more last year to address a funding shortfall for its municipal obligations. Stewardship Ontario released a 2014 Adjustment Fee Schedule to raise $7.7 million from its Blue Box stewards, who received a fifth 2014 invoice (they normally receive four, which are sent quarterly) before the end of last year.

Fees for this year under Manitoba’s stewardship program increased in almost every category, except for PET/HDPE (polyethylene terephthalate/high-density polyethylene) bottles and aluminum packaging.

Likewise, Eco Enterprises Quebec’s fees went up across the board; however, it remains the only province to offer producers a credit for postrecycled content in printed matter and in containers and packaging.

In British Columbia, Multi-Material BC’s (MMBC’s) fees—the highest in the country—didn’t change from 2014 to 2015.

Possible legislative changes in Quebec may mean stewards will no longer be able to exclude business-to-business packaging and printed paper from EPR reporting obligations in the future, which could increase their expenditures. While there’s no time frame, discussions in the province continue about designating these additional materials under the Environmental Quality Act.

Small Business Exemptions Expand. The British Columbia Ministry of Environment in 2014 became the latest Canadian province to pass a regulation that exempts categories of small businesses from the obligation to assume responsibility for the recycling of their packaging and printed paper under the British Columbia Recycling Regulation. The exemption extends to:

• businesses with less than $1 million in annual revenues;
• businesses that supply less than 1 metric ton of packaging and printed paper to British Columbia residents;
• businesses that operate as a single point of retail sale and are not supplied or operated as part of a franchise, a chain or under a banner; and
• organizations that also are registered charities.
   

Moreover, MMBC introduced simplified reporting for businesses that supply between one and five tons of packaging and printed paper to residential consumers, classed as low volume stewards. These stewards are required to pay a flat fee commensurate with the amount of material they supply into the residential marketplace.

New Programs Loom. Last year, Saskatchewan was preparing to launch a shared responsibility household packaging and paper stewardship program for 2015. However, shortly before the start of the program Jan. 1, 2015, the Ministry of Environment announced some changes to exemptions for small businesses and capped fees that delayed its launch. While stewards wait to hear about the future of the program, Multi-Material Stewardship Western issued a Cost Recovery Invoice to each member Jan. 30, 2015, to recoup the costs incurred since 2013 for program development, meetings with provincial and municipal governments, steward recruitment activities, contracts and agreements, support for steward reporting and establishment of a fee schedule. Each member was invoiced based on a percentage of the annual cost for 2015 they were assessed.

In British Columbia, a new stewardship organization called StewardChoice emerged as an option for producers to meet their packaging and printed paper EPR reporting obligations, initially in multifamily buildings. The organization has submitted a draft stewardship plan to the BC Ministry of Environment for review and approval.

Among several proposed changes to Nova Scotia’s solid waste regulations is a product stewardship framework for 24 products, including packaging and printed paper. A public consultation period was held on the proposed changes last year, the results of which will be released soon.

Nova Scotia also joined Prince Edward Island, New Brunswick and other Atlantic jurisdictions in a study last year about the option of moving to an EPR program for packaging and paper, including developing a framework and implementation plan for each province. The study was released in August 2014.

Lastly, Alberta is considering designating packaging and printed paper to be managed under an EPR program. A stakeholder consultation process began in 2013 to discuss proposed changes to its recycling regulations. Completion of a regulatory package for review is expected by this spring.
 

U.S. states take steps

Unlike Canada, the U.S. has been slow to embrace EPR for packaging. While product programs for items such as paint, carpet, mattresses and mercury thermostats exist in more than 30 states, no laws establishing packaging EPR programs have been passed. However, some states have taken steps to introduce the concept with proposed or passed framework EPR bills during recent legislative sessions, including:

• Maine – The state passed a framework EPR bill in 2010 that gives it authority to establish programs for select product categories. However, additional regulations are needed to create EPR programs recommended for specific products, such as packaging.
• California – The Integrated Waste Management Board adopted an EPR framework as a policy to guide the development of new legislation. If enacted, the framework would provide California the authority to establish overall product stewardship programs and procedures for targeted products.
• Rhode Island – In January of this year, the Marine Debris Reduction Act was introduced, which would establish EPR for packaging as part of an effort to reduce the amount of unrecovered post-consumer waste packaging at the state’s beaches, in storm drains and in the bay and ocean. The bill calls for a manufacturer-financed system to increase the collection, recycling and reuse of discarded packaging materials.
• Vermont – Last year, Senate Bill 312 was introduced, which would have established minimum principles for the enactment of EPR programs in the state, including future programs for packaging and printed materials. The bill didn’t go anywhere.
   

While EPR bills for packaging haven’t been widely adopted, some states have attempted to address the increasing burden of recycling costs on municipalities and states via another route: with litter and/or recycling tax mandates. These taxes typically have a two-fold purpose: to fund both the cleanup of commonly littered packaging and the recycling of packaging. In essence, these taxes serve the same purpose as EPR fees but only target a small segment of the packaging stream.

Several states from New England to the Pacific Northwest currently have these mandates in effect, and Delaware’s just expired at the end of 2014. While each state’s tax differs slightly in the materials it covers and the amounts manufacturers, wholesalers, retailers and distributors must pay each year, most affect food and beverages. For example, in Rhode Island, the state levies a litter control tax on certain food and beverage retailers, which ranges from $25 for retailers with less than $50,000 in sales to $125 per $1 million of sales. Whether these states expand their litter and/or recycling taxes in the future to cover more packaging waste—in effect, creating more EPR-like programs—remains to be seen.
 

Futur impacts on U.S. EPR legislation

To date, concerted efforts have been made to help fund recycling infrastructure through programs such as The Closed Loop Fund, the founding members of which are Coca-Cola, Colgate-Palmolive, Johnson & Johnson, Keurig Green Mountain Inc., PepsiCo, Procter & Gamble, Unilever, Wal-Mart and Goldman Sachs. But changing economic forces may take the idea of funding recycling further and drive EPR in the United States, such as:

• the cost of processing recyclables and the lower quality of recycled materials resulting from the growth in single-stream collection programs and more lower value materials being collected;
• lower oil prices and new virgin plastic capacity, which put recycled plastics at a greater economic disadvantage;
• compared to the rest of world where EPR subsidizes the cost of recycling, the U.S. continues to struggle to maintain and expand its recycling programs.
   

Victor Bell is president of Environmental Packaging International, Jamestown, Rhode Island, and can be reached at 401-423-2225, ext. 800, or by email at vbell@enviro-pac.com. For more information, visit www.enviro-pac.com.