Companies Seek Federal EPR: How Producers Can Prepare

Governments and industry are at a crossroads in their work to figure out how to manage the world’s trash in a way that’s both environmentally responsible and economically feasible. Landfill space is shrinking; disposal costs are rising; and now brands are called on to help ease the burden by recycling the products and packaging they crank out once they become waste.  A big problem is getting the materials back—recycling collection and processing infrastructure is woefully lacking.

These waste management issues are the driving forces behind Extended Producer Responsibility (EPR)—laws that hold producers responsible for managing what they sell at the end of life. 

Europe has run such legislated stewardship programs for decades and now they are popping up in the U.S., especially around single-use packaging. Packaging EPR laws have passed in five states, and more are coming.

So, producers should prepare now to stay ahead of the game, advises Heidi Sanborn, executive director, National Stewardship Action Council. And they should be thinking about more than how to deal with what they market once it hits the waste stream because expectations are expanding. 

“What we first thought EPR meant was simply to set up collection and recycling programs. But now it can cover everything from truth in labeling; to changing product and packaging designs and chemistries so materials are safer and less expensive to recycle; to source reduction, which is using less material or making [an application] refillable to avoid waste in the first place,” she says.

So, producers should think about their products through their lifecycle (from design through disposal). If they think lifecycle now it will save them time, stress, and money in the long run, Sanborn advises.

The most successful systems are those where multiple stakeholders came together to develop the legislation and to aid in implementation, says Erin Simon, vice president and head, Plastic Waste and Business, World Wildlife Fund.

In the U.S., producers are just beginning to engage in dialogues with policymakers and other stakeholders. Doing so is critical to ensure that their practical insights and industry-specific knowledge informs EPR policy, says Scott Cassel, chief executive officer/founder of Product Stewardship Institute.

These multistakeholder conversations are as critical to developing a harmonized approach, rather than a patchwork of rules across states.

“A growing number of companies along the plastic value chain are asking for federal EPR. As more states pass EPR legislation, companies are seeking standardization and reduced complexity that would come with a federal law,” Simon says.

She encourages companies to listen to the Senate Environment and Public Works hearing on EPR for Consumer Packaging and to check out the Business Coalition’s letter to the Biden Administration calling for executive leadership on plastic pollution to learn about conversations around national policy.

Producers should be thinking about how much plastic and what kind of plastic they put on the market. These are among many details that evolving laws require them to report, says Anne-Titia Bové, advisor to Circular.co, a developer of a data-powered sustainable materials sourcing platform.

“What is the total weight of plastic packaging sold, say in 2024, and how many pieces of packaging have they sold? And know there are better or worse plastics for the environment and human health. One better plastic is PET because it’s easily recyclable.  Some worse ones are PVC and polystyrene, which are harder to recycle and have more toxicity associated with them,” Bové says.

Brands and other companies can expect to hear about eco-modulation if they haven’t already—a concept intended to incentivize eco-friendly designs. Producers pay lower EPR fees for products and packaging designed to be recyclable and or reusable and less toxic for the environment; they pay higher fees otherwise.

“Producers that are leaders in sustainability have already begun to focus on eco-design principles, incorporating recyclable materials and designing for easy disassembly to reduce environmental impact and compliance costs. Those companies will have a competitive advantage in the new playing field of eco-modulation,” Cassel says.

Eco-modulation helps address a common barrier resulting from the way EPR programs are typically run, says Peter Borkey, Circular Economy Lead for the Organisation for Economic Co-operation and Development (OECD), an intergovernmental policy thinktank.

Usually producer responsibility organizations (PROs) manage brands’ responsibilities for them collectively, rather than considering decisions that individual producers make and outcomes of those decisions.

Consequently, if brands invest in improving their package design and their competitors don’t, they incur cost with no benefit, Borkey says.

So, while there are economy of scale advantages in pooling producers to fund collection and recycling, the flip side is they do not get incentives to improve their products.

“I think it’s in their interest to work with PROs to modulate fees to develop standardized packaging that considers constraints at the backend of the process, in sorting facilities, to help reduce cost,” Borkey says.

He advises producers to work with each other and with their PROs to define design standards and set up an eco-modulation system that reflects those standards.

France is leading the way in EPR, with over 26 systems targeting products from toys and power tools to cigarette butts and construction materials. And they are one of the first to set up a fee structure, which for packaging includes a weight-based fee, unit-based fee, and eco-modulation fee. 

To get a sense of how packaging EPR might pencil out for U.S. companies under France’s scheme, Bové simulated a scenario looking at what a few signatories of Ellen MacArthur’s  Global Commitment did to reduce packaging and change the plastic mix. Then she calculated what their material costs and EPR fees would be under the French rule.

In this illustrative example, the select brands would have, on average, nearly halved their EPR fees and reduced their material costs by 10 percent, she says.

There are many questions ahead, such as around fee structures; whether to have a single PRO run the program; or whether to allow multiple PROs to operate. And if there are multiple PROs, how to ensure they all comply with the same terms.

But stakeholders with a pulse on EPR say well-designed laws can be powerful. They can reduce the burden traditionally incurred by governments to manage what producers sell once it’s spent, while giving producers choices as the responsibility shifts to them.

Says Borkey: “The beauty of EPR is that it is a market-based instrument.  It allows companies to internalize environmental external cost (such as waste management costs that till now producers did not have to bear). And they can decide the most efficient way to comply and optimize those costs.”