September 27, 2022
Today's guest blog comes courtesy of the GreenBiz Group. The original post can be read here.
Estimates suggest that packaging comprises 28 to 40 percent of total municipal solid waste (MSW) generation in the United States. As generation of MSW, and particularly packaging waste, continues to increase in the U.S., we’ve been challenged with trying to recycle our way out of a waste crisis. While recycling has been facing issues for some time, the scope of the problem became well known in the wake of China’s National Sword policy, after which many U.S. municipalities could no longer cheaply export recyclables. Faced with taking on the cost to recycle themselves or finding cheaper means of recycling, many cities reduced or halted their recycling programs.
These challenges can’t be solved simply by expanding recycling as it currently exists, because the packaging waste mix has grown more complex. Single-stream recycling faces constant contamination from an increasingly complex array of packaging formats, particularly the proliferation of flexible plastic bags and films that clog machinery at Material Recovery Facilities (MRFs).
The resulting problems? Not enough people have access to convenient curbside recycling for the packaging they use every day. Additionally, companies are often incentivized to use virgin materials over those with recycled content: the expense of recycling and high levels of contamination result in recycled materials costing far more than their virgin alternatives. And lastly, many recyclable materials, such as fiber, are often more expensive than their difficult-to-recycle counterparts.
Packaging companies such as mine have been prompting brands to transition to sustainable packaging, and there is some incentive for brands to do so — we know that consumers are concerned about the sustainability of packaging and have pressured companies to act. However, the "brand image" incentive only goes so far given the premium brands often must pay to switch to sustainable packaging. Brands that have chosen to do the right thing by switching to more sustainable packaging are often financially penalized for doing so through these premiums.
Long story short: We have tons of material to recycle, but insufficient infrastructure to recycle it, and not enough incentives for companies to use recycled or recyclable packaging materials. Consumer pressure has prompted some progress, but not nearly enough to spur the level of transition we need towards sustainable packaging, much less to improve our recycling and composting systems.
That’s where packaging Extended Producer Responsibility (EPR) comes in. EPR is a policy framework that places financial and often operational responsibility for the end-of-life of a package on the producer of that package, which is usually a brand. Producers pay fees for the packaging they use into a Producer Responsibility Organization (PRO), and then the PRO uses the funds to support and improve recycling (and sometimes composting) systems. When done well, these funds fully cover the cost of package collection and recycling, instead of having taxpayers pay these costs. More recently, EPR laws have included "eco-modulated" fees instead of modulated fees, based on two factors: the total weight of material they introduce into the market; and net recycling costs. The eco fees are more complicated and take environmental metrics, such as greenhouse gas emissions and reusability, into account. They incentivize brands to make different packaging choices because they’d pay more for the less recyclable packaging they sell, and less for packaging that’s more recyclable.
With packaging EPR policies in place, brands are financially incentivized to eliminate unnecessary packaging and to use recyclable or compostable packaging wherever possible. EPR creates a level playing field so that all companies must think about ways to improve their packaging. Many countries, including Canada, Germany and Japan, have packaging EPR laws, and I’m thrilled that in the last 18 months alone, four U.S. states have passed packaging EPR bills, the biggest and most recent of which is California.
In addition to creating a level playing field, packaging EPR will give producers a critical chance to improve recycling infrastructure and consumer education in the states with EPR laws. Financial and operational investment in recycling will result in more clean, recyclable material coming out of MRFs for manufacturers to turn into new packaging. This will help brands, many of which have set ambitious recycled content goals that are difficult to achieve due to the unavailability of clean, high-quality post-consumer material.
If companies across the supply chain are serious about sustainability, they should support EPR. Companies that operate in states that have not yet passed packaging EPR laws should contact their trade association leads and work with state legislators to express their support for these laws. For companies that operate in the four states with new EPR laws, getting involved is key: Companies should contact their trade associations to understand how to help form the PROs. Gaining a seat at the table will help companies ensure their voices are heard as PROs design the fee structures that determine how effective EPR will be.
Packaging EPR represents a critical lever we can pull to improve packaging sustainability. Producers will be able to pool their funds and inject much-needed capital into a system in dire need of investment. They’ll be able to redesign packaging and the system to recycle it at the same time. While brands have historically seen EPR as a cost burden, achieving a circular economy for packaging will only be possible with the collaboration and investment required through packaging EPR.
Disclaimer: Guest blogs represent the opinion of the writers and may not reflect the policy or position of the Northeast Recycling Council, Inc.