Who foots the bill?

Talk to anyone with a vested interest in recycling, and the conversation soon boils down to one question: Who pays?

More than three years after China implemented its National Sword policy, it’s an issue policymakers at the state and federal level in the U.S. are starting to grapple with as the nation realizes the true cost of salvaging value from its waste stream.

When it comes to plastic packaging, policymakers are beginning to turn to extended producer responsibility (EPR) legislation—which imposes fees on the makers or distributors of specified products and packaging to help cover the costs of their disposal or environmental mitigation. Although the idea of charging for the end-of-life disposition of troublesome products when they are manufactured or distributed isn’t new, the details of how to make the system work for packaging are still up in the air.

Finding support

In Maine, as in many states, the inefficiencies of the current system have created a disincentive to recycle. According to the state’s Department of Environmental Protection (DEP), the cost to recycle materials is 67 percent higher than the cost of landfilling materials. Maine Rep. Nicole Grohoski, who sponsored the EPR bill for plastic and paper packaging that this summer became the first of two in the country to enter into law, believes the current system has fallen short.

“People want to do their part by recycling, and municipalities want to offer programs, but they can be cost-prohibitive for the tax base,” she says.

Under Maine’s Legislative Document (LD) 1541, U.S.-based brand owners will pay fees based on the amount of paper and plastic packaging material they bring into the state. Plastic, metal and glass bottles, which are covered by a separate deposit-redemption arrangement, will be exempt.

Consumers likely won’t notice fees that are levied against plastic packaging, but that money will add up, says Sydney Harris, policy and programs manager for the Boston-based Product Stewardship Institute (PSI), a nonprofit organization that lobbies for EPR legislation.

“The idea behind EPR is that corporations should be responsible for the product and the packaging that they put on the market, including postconsumer, because those products and packaging often have significant health, safety, environmental [and] social impacts,” Harris says.

LD 1541, signed into law in July, aims to encourage waste reduction; materials reuse; the use of readily recyclable materials; a reduction in packaging materials’ toxicity; and the use of single-material packaging that includes prominent and easily understandable symbols or instructions regarding recycling or disposal.

Funds will go toward municipalities, based on their costs for abating litter and collecting, recycling or disposing of material. In addition, municipalities and other entities can apply for funding to invest in education and infrastructure related to recycling.

“The Maine DEP estimates that municipalities spend around $17 million a year in taxes on managing packaging waste, so that would likely be a minimum but shows the order of magnitude,” Grohoski says.

An oversight organization, known in Maine as a stewardship organization (SO), will track waste amounts and collect and disperse fees from producers. The entire structure could take several years to implement, she says.

It wouldn’t surprise Grohoski to see a nonprofit that producers already are involved in apply for this role.

“It’s not unusual for the state to contract with outside organizations for help with program administration, especially when the task may require many additional staff with specialized expertise and particular skill set that the DEP staff may not have in-house,” she explains. “The SO will need to have people with experience in things like software development, accounting and other services that are not necessarily regulatory in nature,” she adds.

Following the trend lines

Following Maine’s lead, Oregon became the second state this summer to ratify EPR rules. Oregon Gov. Kate Brown signed SB 582, known as the Plastic Pollution and Recycling Modernization Act, into law Aug. 6. Similar to Maine’s EPR legislation, Oregon’s law will require brand owners selling packaging, paper products and food-service ware into the state to join SOs and pay fees to support the improvement and expansion of recycling programs and infrastructure statewide.

Pete Chism-Winfield, program coordinator for the city of Portland, Oregon, says Oregon’s EPR law could help to boost transparency about what materials are being collected and what they are being recycled into. He adds that the law could lead to investments in recycling equipment.

He says, “Some of the MRFs [material recovery facilities] in the area have already, in response to National Sword, been investing in adapting to slowing down lines and putting in new equipment to get cleaner streams of material. But having that ongoing—because we know in the recycling world that the materials that we buy and we use are constantly evolving—funding mechanism that helps the system with it as we move forward is going to be, I think, pretty crucial.”

In addition to Maine and Oregon, about a half dozen other states are considering their own legislation—including New York, Vermont, Washington and California.

Additionally, Congress’ Break Free from Plastic Pollution Act lays out a national EPR system. The proposal takes on a slate of initiatives, from mandating progressively higher levels of recycled content in bottles to establishing a bar for the percentages of products that must be reused, recycled or composted.

PSI, which has more than 120 partners, including businesses and governmental groups, backs bills that give all stakeholders a voice in the process.

“We want to see financial and sometimes management responsibility go to the producers. But we also need to see government oversight and accountability and transparency in this program. So, there’s definitely a balance of power, if you will,” Harris says. “We also like to see economic incentives that really incentivize manufacturers to incorporate environmental considerations into the design of their products and packaging.”

The impact on recyclers

As states such as Oregon and Maine begin to reshape their recycling models to incentivize more recyclable packaging, Chism-Winfield says he has witnessed a shift in the conversation surrounding EPR laws.

“The tone [and] conversation even six years ago, or even sooner than that, was that EPR can’t work in this country because there is not the political will to do it. And I think, due to the awareness of some of the plastic pollution around the globe and our contributions to that, that had really shifted that conversation,” he says. “The conversation shifted from ‘Can EPR happen in the country?’ to ‘EPR needs to happen in the country, and how does it happen?’”

Chism-Winfield says he hopes other states won’t wait to begin enacting their own forms of EPR.

In California, numerous bills currently active within the state legislature incorporate EPR. They include SB 38, which would require beverage container distributors in the state to form an SO to manage the recovery and recycling of empty beverage containers, while AB 842, the California Circular Economy and Plastic Pollution Reduction Act, would create a packaging SO and impose packaging fees on producers.

Other bills up for consideration in the state mandate recycled content. For example, AB 478 would require thermoformed plastic containers sold in California to contain specified average amounts of postconsumer recycled plastic, penalizing producers that violate these requirements.

Keng Baloco-Wong, who manages product sales and logistics for MRFs operated by City of Industry, California-based Athens Services, says, “Currently, [the state] is working on AB 478, which is specific to [thermoformed containers] and basically gives the timeline of producers having to use 30 percent recycled content after 2030.”

Baloco-Wong adds that she thinks EPR is likely to pass in other states, including California. “I definitely think there will be other components of EPR that pass here in California. These bills are getting a lot of traction.”

While not EPR, most recently, California lawmakers in the state Senate passed SB 343 Sept. 9, which aims to ensure claims related to the recyclability of a product or packaging are truthful.

“SB 343 is a bill that we are supporting right now that is trying to eliminate the chasing-arrows recycling symbol because it’s very misleading,” says Joe La Mariana, executive director for San Carlos, California-based RethinkWaste, a public agency that serves 430,000 residents and 11,000 businesses across 11 municipalities. “People are very well-meaning putting materials in their [bins] that are not recyclable, and then we need to go to great lengths to sort them out.”

La Mariana says he hopes EPR will gain momentum across the country as the general public and state legislatures begin to see the value in placing ownership of these hard-to-recycle materials into the hands of the manufacturers.

“I think we’re past the time where manufacturers get to unilaterally design the products and just walk away from them,” he says. “At some point, they have to have some sensibility and some sense of ownership of what happens to those materials downstream and what the effects are on our community.”

Areas of resistance

With the U.S. recycling rate for plastics at less than 10 percent, according to U.S. Environmental Protection Agency figures for 2018, recycling proponents agree action is needed to support infrastructure that is designed to handle the tens of millions of tons of materials that are currently landfilled.

But some believe not all EPR legislation is created equal, with critics categorizing bills in two camps: polluter pays versus polluter control. They warn some bills give too much power to producers to decide how their own fees are spent.

“Any bill that creates a PRO I would be opposed to because the PROs are just an unnecessary middleman, middlewoman function,” says Neil Seldman, a co-founder of the Institute for Local Self-Reliance (ILSR), a think tank that pushes grassroots answers to problems ranging from the obstacles faced by mom-and-pop businesses to disparities in broadband access.

Seldman, who is based in Washington and directs ILSR’s Waste to Wealth Initiative, specializes in helping cities and businesses recover material from the waste stream and add value to the local economy through new processing and manufacturing facilities. For him, growing support for EPR raises a question: Who’s guarding the henhouse?

Maine’s LD 1541, which Grohoski describes as a polluter-pays arrangement, provides a mechanism by which producers can apply to the DEP to create an alternative collection program. Other legislation goes further, making these organizations responsible for waste-tracking and fee-handling, at least to some degree. That’s the case in Oregon and the setup that some federal bills propose.

Seldman characterizes that as an unacceptable usurpation of local control over recycling. Producers won’t want to invest in innovation if they can choose instead to get rid of waste cheaply, he says. He believes producers will direct their EPR fees to dispose of their plastic scrap in the cheapest way possible.

“It will take all checks and balances out of the public sphere. And we will be mediocre recyclers for the next generation,” he says. “Because the proper infrastructure for distributed composting, reuse centers, resource recovery parks, dual-stream recycling plants, pay-as-you-throw, minimum content [requirements], all those things will be discarded because the industry doesn’t want them. They want total control.”

Also, not all states want to enact EPR legislation. For instance, in Iowa, EPR might not be as effective at helping to improve recycling as initiatives that already are in place. Since 1978, the state’s Beverage Containers Control Law—the deposit program that covers carbonated and alcoholic beverages—has garnered increasing popularity among the residents. According to Iowa’s Department of Natural Resources, an estimated 71 percent of beverage containers are redeemed annually in Iowa.

Under the bill, consumers pay a 5-cent deposit when purchasing a beverage container and receive a 5-cent refund when returning the container to a store or redemption center.

For Mick Barry, president of Mid America Recycling in Des Moines, Iowa, the bottle bill has allowed for significant productivity gains at the company’s MRF by having beverage containers removed from the waste stream.

“It gives us less three-dimensional versus two-dimensional sorting that we have to do,” Barry says. “Most of our MRFs here in Iowa run much cheaper than most across the country because we’re able to handle the material easier and quicker and not have to face the manpower issues that everybody’s facing today. At the end of the day, we look at [recycling] as a production unit. Having the deposit material not in the system makes our MRFs run that much more effectively. And in fact, we support additional legislation here in Iowa where the bottle bill would be expanded.”

While Barry sees EPR as a benefit to MRFs because of its ability to keep recycling costs down, he says such a proposal would have a difficult time getting through the Iowa legislature.

“Iowa’s legislature is really not into mandating things, and we have a rule that no legislation should be with unfunded mandates,” he says. “So, if we’re mandating somebody to do something from the statehouse, then a funding mechanism has to be developed around it.”

In Texas, lawmakers have made several attempts to introduce bottle bill or EPR legislation, but the bills stalled before they made it to the floor for a vote.

“Texas is typically for—in most instances—less government intervention, and there are also very strong lobbying groups, such as the Texas Retailers Association and beverage producers in the state that are very strong groups,” says Kerry Getter, CEO of Austin, Texas-based MRF operator Balcones Resources Inc. “It would take support from all those groups to even create a debate, I think, that was meaningful.”

In the meantime, he says he thinks recyclers should continue to work toward enhancing capture rates for prominent plastic grades that exist in today’s material streams.

“We are still woefully deficient in some of our initiatives with more prominent grades of plastic,” Getter says. “I would love to see us address those markets and that situation more aggressively and with more certainty than we are now.”

He continues, “I think it’s going to be a slow evolutionary process to get from where we are today to whatever someone decides is the promised land. It would be difficult for me to jump on an EPR bandwagon or anything else with respect to enhanced recovery until we can take care of our current business a little bit better than we are doing it now.”

A collaborative approach

No matter their stance on EPR legislation, recycling advocates easily find consensus on one issue: As recycling programs across the country shut down in light of their expense, plastic waste has become a crisis. The Ellen MacArthur Foundation, a nonprofit devoted to creating a circular economy, for example, is working with more than 1,000 partners, including PepsiCo, Nestlé and Coca-Cola, in its push for EPR policies.

“I think this is extremely important because, while being part of the problem, they must be part of the solution,” Ambrogio Miserocchi, a senior analyst for the U.K.-based foundation, says of working with beverage producers.

While he opposes some of the details in EPR bills, Seldman maintains that local programs can handle the job, but they need more funding to do so. He says investment in infrastructure is a component of several congressional bills, including the Break Free from Plastic Pollution Act. He also supports pay-as-you-throw arrangements to cover costs.

“Every ton of garbage that goes to an incinerator or landfill pays a surcharge,” he says. “That surcharge creates a fund for reinvestment in cities and towns, but the money goes to cities and towns to determine their own programs to expand, deepen, etc.”

If you ask Grohoski, her state is making progress already. Maine’s EPR law for packaging will put more responsibility on corporations to cover the costs of essential services and create more balance in a system that has put too much burden on municipalities, she says.

“The law will certainly expand plastics collection opportunities in Maine because, right now, recycling programs are piecemeal across the state, and this program will make the whole recycling system more uniform,” she says.

Karen Hanna is a senior staff reporter with Plastics Machinery & Manufacturing and can be reached at khanna@endeavorb2b.com. Haley Rischar is an assistant editor for Waste Today and Construction & Demolition Recycling, sister publications to Recycling Today, and can be reached at hrischar@gie.net.