July was an important month for state-level packaging producer responsibility programs in the United States. Over the past several weeks, two states — Maine and Oregon — have signed into law legislation for packaging producer responsibility, and several more states are considering doing the same.
AMERIPEN supports shared responsibility for financing and managing the modernization of the recycling system to match packaging innovations. However, we are concerned that these laws and future legislation may exclude stakeholder input, create difficult-to-manage systems, and further strain an already struggling US recycling/recovery industry.
A closer look at both laws underscores the challenges that the packaging industry foresees as more states look to packaging producer responsibility as one way to balance recycling budgets by shifting the financial responsibility of end-of-life management of packaging from consumers and government to industry. Even so, recent research shows these laws may still cause increased costs to consumers for the goods they purchase.
Maine’s bill, LD 1541, was signed into law July 13 and covers most types of consumer packaging, including boxes, cans, pouches, non-beverage containers, and wraps. It was designed to help improve recycling rates and reduce waste. Producers — primarily product brand owners — will be required to pay into a stewardship organization, and local governments can use that money to fund packaging end-of-life management.
However, the law excludes industry stakeholder collaboration in the producer responsibility organization (PRO) and places full authority for the development of the program in the hands of the state’s Department of Environmental Protection (DEP). This creates a significant burden on DEP, and it also is inconsistent with other packaging producer responsibilities programs in Canada and Europe, which integrate industry stakeholders and recognize their ability to help create effective long-term solutions for recycling.
The producer fee structure in Maine’s law also is problematic. Producers will be charged based on packaging weight and type, rather than their packaging’s recyclability. As a result, packaging that is highly recyclable may actually cost more than other products that are not as recyclable. AMERIPEN believes this approach will do little to raise recycling rates and will ultimately raise costs for Maine residents. In fact, a York University study of LD 1541 shows that the cost will very likely be passed on to consumers, who will pay between 3.91% and 5.57% more for goods in their state.
In Oregon, SB 582, which was signed into law on August 6, shares some of the same flawed approaches as Maine’s law. Producer costs are based on a list of recyclable covered products developed by the state. As in Maine, fees are based on weight and material type. The PRO can petition the state to use other fee models, and new materials will have to demonstrate a market before they can be included in curbside programs.
Although the packaging producer responsibility program is under the leadership of industry, and a new, government-appointed recycling advisory council will have an advisory role, the state’s Department of Environmental Quality (DEQ) will maintain oversight, make most of the substantive decisions for the program, and set the major financing rates.
Effective packaging recovery requires the expertise and services of multiple stakeholders. We need funding to modernize the recycling system across the country, but we also need other policies and mechanisms to collaboratively help strengthen where the system is weak and advance where it is strong.
Because of this, AMERIPEN collaborated with the entire packaging value chain to outline key principles and objectives for financing packaging recovery, and we worked closely in Maine and Oregon to incorporate these tenets into proposed amendments to their legislation.
While Maine rejected our proposal, Oregon worked to adopt some of our suggestions. As we move toward rulemaking and we anticipate more states may model off these two, we believe more work is needed. Chief among our concerns are the following:
• Collaboration with, and decision-making by, industry stakeholders is essential for systematic change. Our proposal suggests an industry-led PRO that leverages expertise from the entire packaging value chain, including the waste community and state officials.
• We must dedicate resources to upgrading the system for the future and not simply transfer costs based on the system as it is today. Neither state’s law encourages investment into end-market development or research and development for better collection, sortation, and reprocessing.
• The US recycling system needs some level of coordination among these state-based programs. More consideration should be given to how national or regional industry-led PROs could standardize programs to streamline efforts — much like the Canadian Stewardship Services Alliance serves as a harmonizing body between the various packaging producer responsibility programs in Canada. The new laws will make this difficult to accomplish, especially in Maine.
• A cap on government administrative fees is needed to offer predictable financing to both packaging producers and recyclers. Maine's law provides for this; Oregon's does not.
As a result of these laws, we anticipate more packaging producer responsibility programs to develop across the country, and AMERIPEN will continue our dialog with lawmakers to advocate for the industry and to effectively use our expertise to build programs that are results based, efficient and effective, and equitable and fair. We can support industry financing for packaging recycling and recovery, but we need to ensure that programs work for all stakeholders and are not simply a transfer of funds from one payer to another with little vision toward revitalizing the recycling/recovery system for the future.