EPR is gaining more momentum in the U.S. What are its major benefits and shortcomings?
By Tom Szaky
Extended producer responsibility (EPR) legislation for packaging is increasingly being introduced across the US. EPR, which shifts the financial burden of collecting and recycling products and packaging off of consumers and governments and onto the companies that sell the products, is already well-established in other regions of the world, particularly Europe. Five states have full packaging EPR program laws: California, Colorado, Maine, Minnesota, and Oregon. Several others have active EPR bills.
Because we operate in more than 20 countries, many of which have had EPR in place for years in some capacity, we have had a first hand look at the benefits and shortcomings of EPR.
Why is EPR Policy Needed?
In the current U.S. recycling system, the main actors鈥攎anufacturers, retailers, consumers, and waste management companies鈥攁re generally not mandated to adopt circular actions. It is much easier (and less expensive) to operate within a take-make-waste linear model than to move toward circular systems. Generally (other than in the states with EPR laws mentioned above), manufacturers do not have to take responsibility for the end-of-life of their products and packaging. Retailers can choose to stock whichever products make them the most money. Consumers have shown preference for more convenient, disposable options, and they have no legal obligation to recycle anything. If they do put an item in a recycling bin, the waste management company is not legally required to recycle it (they will recycle what they can make a profit from).
These realities drive waste creation. While the waste crisis has been top news for decades, and many manufacturers, retailers, and consumers have made conscious efforts to reduce waste, little progress on recycling rates has been made. This is where government action can help.
How Does Policy Help Address Waste?
There are a few ways policy is being leveraged to reduce waste, encourage recycling, and close the loop. The majority of these policies target manufacturers.
Manufacturers: Policies typically fall into the following categories:
鈥� Regulations that prevent them from creating certain items. Single-use plastic bans are an example. The U.S. has no federal single-use plastic bans, but several states, plus Washington D.C., do regulate items like plastic bags and straws.
鈥� Requirements that mandate certain actions, like using a portion of post-consumer recycled (PCR) content in production. California, Washington, New Jersey, and Maine have PCR laws.
鈥� Mandatory deposit return systems (DRS). Brands can be encouraged to participate in deposit return systems, which require them to put a deposit on their product, increasing the price at retail. Consumers get this deposit back when they return the package, typically at a retailer in a 鈥渞everse vending machine.鈥� In the U.S., we call such legislation for beverage packaging a 鈥渂ottle bill,鈥� and it exists in 10 states (and Guam) today. Every time DRS goes into effect, recycling rates increase.
Taxes on products and packaging they put in-market. This is EPR. The money is pooled and used to fund recycling infrastructure and processing. It can be administered at a country level (as in Germany) or at a regional level (as is the case in the U.S., with states introducing their own legislation).
Retailers: As mentioned above, many states have bans regulating single-use plastic at retail. In several states, retail stores of a certain size may only supply plastic bags if they provide a convenient storefront receptacle to make sure used bags are collected and recycled. Maine became the first state to enact legislation requiring recycling efforts at retail stores in 1991.
Consumers: There is no legal obligation for consumers to recycle instead of disposing of a recyclable item. Some countries, like Germany, do fine households for improper recycling. Isn鈥檛 it interesting that we are fined for littering, but not for sending recyclable items to landfills?
Recyclers: The U.S. has no federal mandates that recycling companies must recycle what they collect. However, under state EPR bills like California鈥檚 Senate Bill 54, producers must ensure that a certain amount of their packaging is being recycled. The bill requires recycling operations to provide information on the type and amount of material that moves through their facilities.
Why EPR is Amazing but Not Perfect
EPR generates funds to help subsidize recycling, effectively encouraging more recycling to take place. EPR can also encourage producers to improve packaging design, such as by shifting from single use to reusable packaging. However, it does not make everything curbside recyclable because it does not address the underlying economics of waste. Other than a few materials鈥攕uch as glass, aluminum, and cardboard (the items local recycling services typically accept)鈥攊t costs more to recycle waste than the resulting raw materials are worth.
The pooled taxes paid by producers under EPR, make items that are currently profitable to recycle more profitable鈥攁nd as a result, their rates of recycling increase. However, items that have not been profitable to recycle often remain unprofitable to recycle, and, as such, are not recycled, even if the manufacturer of those items is paying its EPR fees. In other words, expensive-to-recycle items, like cosmetics packaging, will not be recycled, while aluminum cans will be recycled at an even higher rate because they are even more profitable than before (see Figure 1).
Figures courtesy of TerraCycle.
*The waste streams selected for these figures are for illustration only. Actual recycling costs and impacts of EPR vary depending on the individual EPR scheme.
You can see this in action with Germany鈥檚 EPR system. Germany is often lauded for being the best recycler in the world. Packaging EPR schemes in Germany do achieve an impressive 65.5 percent mechanical recycling rate for plastics in their scope, however, 35 percent of plastic packaging is still incinerated.
So, if you are a producer of aluminum packaging, EPR works in your favor. However, if you make hard-to-recycle items like cosmetic products, it might not. The tax you are paying will help fund the recycling of items further up the chain, like that aluminum can, instead of your packaging.
Some EPR schemes aim to tax producers proportionate to the relative impact of their packaging through 鈥渆co-modulated fees鈥�. With eco-modulation, producers of very hard-to-recycle packaging pay the most, and producers of already profitable-to-recycle packaging could pay nothing (or even get a credit). This incentivizes producers to move to higher-quality packaging forms (e.g., from polypropylene to PET) (see Figure 2).
Another way to move the needle on packaging recyclability is to voluntarily fund the true cost of collection and processing a given item. Through partnership with us, brands cover the cost of collecting and recycling items that are not profitable to recycle, voluntarily taking responsibility for the waste they create (see Figure 3). Perhaps EPR schemes should allow brands to opt for VPR if they know their packaging will not be recycled under EPR. The costs still incentivize producers to add value to packaging.
The Bottom Line
EPR is not perfect (and a 鈥減erfect鈥� EPR program would be costly for producers), but the bottom line is that a money flow is needed to improve recycling rates, and EPR contributes to that goal. EPR may not be a magic solution, but progress toward reducing packaging waste is still something to celebrate. | WA
Tom Szaky is the Founder/CEO of TerraCycle, an international leader in innovative sustainability solutions, creating and operating first-of-their-kind platforms in recycling, recycled materials, and reuse. Across 21 countries, TerraCycle is on a mission to rethink waste and develop practical solutions for today鈥檚 complex waste challenges. The company engages an expansive multi-stakeholder community across a wide range of accessible programs, from Fortune 500 companies to schools and individuals. In 2019, TerraCycle launched Loop, a circular reuse platform that enables consumers to purchase products in durable, reusable packaging. Loop is available in France, Japan and the U.S., and is a key step in helping to end the epidemic of waste that is caused by 鈥榮ingle-use鈥� consumption. Tom and TerraCycle have received hundreds of social, environmental and business awards and recognition from a range of organizations including the United Nations, World Economic Forum, Fortune Magazine, Time Magazine and the U.S. Chamber of Commerce. Tom is the author of four books, Revolution in a Bottle, Outsmart Waste, Make Garbage Great, and The Future of Packaging. Tom created, produced and starred in TerraCycle鈥檚 reality show, 鈥淗uman Resources鈥� which aired on Pivot from 2014-2016 and is syndicated in more than 20 foreign markets on Amazon and iTunes. For more inforamtion, contact Eric Rosen, North American Senior Manager 鈥� Media Relations for Loop/TerraCycle at (215) 651-9383 or e-mail [email protected].
Resources
www.earthday.org/end-plastic-pollution-leading-anti-plastic-legislation-in-the-us
www.ncsl.org/environment-and-natural-resources/state-beverage-container-deposit-laws
www.epr-compliance.com/en/german-packaging-act
www.maine.gov/dep/waste/recycle/plastic-bag-film.html
www.bussgeldkatalog.org/umwelt-recycling
www.umweltbundesamt.de/sites/default/files/medien/384/bilder/dateien/14_tab_verwertungsquoten-duale-systeme_2023-03-08.pdf
www.umweltbundesamt.de/sites/default/files/medien/1410/publikationen/2022-09-29_texte_109-2022_aufkommen-verwertung-verpackungsabfaelle-2020-d.pdf