Jul 8, 2024

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If you have an interest in packaging policy or sustainable packaging, you have likely heard the term “EPR” or “extended producer responsibility.” But what exactly is EPR, and how will it ultimately affect the types of packaging we use? In this Deep Dive, we will explore the current EPR landscape in the U.S. and what is likely to come over the next several years.  

A note of caution: this article is intended as a general overview of packaging EPR with some basic advice for companies trying to navigate the new legislative landscape. It should not be taken as legal advice, and we highly recommend that companies who think they are regulated “producers” seek legal counsel to better understand their responsibilities. 

Introduction to EPR

Extended Producer Responsibility, or EPR, refers to a policy approach that shifts the responsibility for waste management of a given product from consumers/taxpayers and municipalities onto the producers of that product. Typically, the main goal of EPR is to minimize the environmental externalities of a product’s end of life – that is, minimize the unintended consequence of what happens to a product when we’re done with it. EPR prompts a society to start thinking on a large scale about where products end up when we’re done with them and how we can better manage them. 

EPR regulations are not new to the U.S. and have been around for over a decade to manage products like e-waste, mattresses, paint, tires, batteries, etc. Let’s take the example of paint. “Producers,” meaning paint manufacturers, are typically responsible for the paint up until the point where you, the consumer, purchase it. But there are some unintended consequences that come when you’re done with that paint can that likely has extra paint in it. While most paint is actually recyclable, many people throw it away or pour it down the drain, which can contaminate the environment with hazardous chemicals. Ultimately, consumers/taxpayers and the environment pay the costs to deal with this result, and paint companies don’t have an incentive to fix it.  

This outcome is obviously not ideal, so many states introduced paint EPR in the early 2000s. Now, 12 states have paint EPR laws that create systems for producers to take back leftover paint and facilitate the responsible disposal of paint to reduce those negative environmental outcomes. In policy or economist speak, we’d call EPR a way to prompt producers to “internalize the environmental externalities.” 

The concept of EPR first began in Europe in the 1990s, then Canada formalized EPR for packaging in 2009, and now the wave of packaging EPR has come to the U.S. We will dive deeper into which states have adopted EPR for packaging legislation and their timelines later.  

The Concept Behind Packaging EPR

In the paint example above, consumers/taxpayers were the ones fronting the costs for the improper disposal of paint. The same thing is happening with packaging today. As our current system stands, consumers are the ones paying for the disposal of packaging through taxes and fees which go to waste haulers and local governments that fund our trash pickup, landfilling, recycling services, litter management, and more. There are a variety of unintended consequences, including the plastic pollution crisis that Atlantic and A New Earth Project talk about frequently. There simply are not enough incentives in place to discourage landfilling or littering and encourage packaging reduction, reuse, and recycling. 

Packaging EPR aims to create some of those incentives. Under packaging EPR (which we’ll just call “EPR” for the remainder of this Deep Dive for ease), the producers will be partially or fully responsible for the cost of disposal, whether that be trash, recycling, composting, etc. (Don’t worry – we’ll get into more detail about who the “producers” are later.) 

But what does that “responsibility” look like? It can take two basic forms: financial and operational. When producers have “financial responsibility” under EPR, they basically take on the cost of paying for responsible disposal of packaging. This likely includes paying for waste collection, more recycling services, composting, and landfilling, as well as programs to prevent litter. As a reminder, this would be instead of, or in addition to, the local municipalities and taxpayers funding the collection and disposal of packaging. Producers fund their financial obligation by paying fees into a system based on the amount of and type of packaging they sell into the regulated state.  

With “operational” responsibility, producers actually play a role in the day-to-day collection and disposal/recycling of materials. This may look like running take-back programs or starting up new recycling and compost services. In EPR laws in the U.S. so far, we largely have seen programs set up for producers to have both some financial and operational responsibility for packaging’s end of life.  

Remember: the whole point of packaging EPR is to create incentives for producers to manage packaging’s end of life so that there are fewer externalities that fall on taxpayers and the environment. So when producers have to take some responsibility – financial, operational, or both – for the packaging’s end of life their incentives change. Firstly, they want to use less packaging because they’ll pay fewer fees into the system. Then, for the packaging they do use, they’ll want to use more recyclable packaging because it usually comes with lower fees (more on this later). Lastly, they’ll have incentives to design and use packaging that is compatible with take-back or recycling/composting programs that they’re responsible for funding or operating.  

As of this writing, five U.S. states have passed EPR for packaging legislation. Maine and Oregon passed first in 2021, with Colorado and California following in 2022. In May 2024, Minnesota signed the fifth bill into law.  

Now, we’ll dive more into some of the elements of packaging EPR that help create these incentives. 

Elements of Packaging EPR

The Producers 

Who counts as a producer under EPR?  

Typically, the “producer” of a piece of packaging is the brand whose name appears on the packaging, not the actual manufacturer of the packaging itself. The idea here is that the brand is the one that makes the decision about what kind of packaging to use, and thus, they have the market power to demand different packaging materials or designs. However, there are some exceptions to this rule, and different states/schemes may have slightly different criteria for producers based on whether they’re a U.S.-based company, if they’re a distributor or private label, etc. There are too many caveats to go into here for the different states’ laws, but just remember that typically, the producer is the one whose brand is on the package. To see if you’re an obligated producer for each state, you’ll need to consult the EPR statute (the bill that becomes law) in that state. 

It’s important to note that “producers” don’t need to be based in the regulated state: if they are selling product into the regulated state, they are likely an obligated producer under that state’s law. 

States typically have small business exceptions. Each state has a minimum threshold based on the amount a company sells within the state. For example, if a company is selling over $1 million worth of product per year in California, they will likely be an obligated producer, but a company selling less than $1 million would be exempt, regardless of where that company is based. This threshold is different for each state.  

The Producer Responsibility Organization (PRO) 

An EPR program is managed by a Producer Responsibility Organization (PRO), which is typically a non-profit run by the producers. The PRO (which may also be called a Stewardship Organization) must be approved by the state, and the PRO and the state agency work together to make the EPR program successful. Some key producers will start a PRO, and then other producers can join the PRO to comply with the law. 

One of the main elements of this is a program plan that the PRO drafts and that the state approves. The actual EPR law (statute) likely outlines some key performance targets that the PRO is responsible for achieving, such as a recycling rate target. The PRO will draft a plan for how they plan to achieve those targets and fund their operations to manage responsible disposal, and the state will approve it.  

Each year, producers provide data to the PRO about how much and what type of packaging they sold into the state. Based on that data, the producers each pay fees to the PRO. The PRO works with the state government agency to execute the program plan, allocating funds to improve recycling infrastructure, increasing covered material collection, supporting consumer education, and achieving program targets.  

In the U.S., it is most common for the PRO to need to be a non-profit organization. This is not required as often in Europe. Additionally, in the U.S., typically there can only be one PRO per state, although not always. 

Who is the PRO?  

The PRO can be a different organization in each state. However, thus far, the Circular Action Alliance (CAA) has been named as the PRO in California, Colorado, and Oregon. We expect it will continue to be named as the PRO in other states, basically operating a “franchise” model. CAA is a 501(c)(3) nonprofit founded by 20 companies, including Amazon, Coca-Cola, Keurig Dr. Pepper, Mars, and many more in response to the rise of EPR laws.  

The Advisory Board 

Each state typically selects a Producer Responsibility Advisory Board consisting of a variety of affected or knowledgeable stakeholders. The Advisory Board works to identify the challenges, opportunities, and nuances to developing EPR, advising the PROs on law implementation. Atlantic Packaging’s President, Wes Carter, sits on the Advisory Board for the PRO in California, representing Atlantic as the only packaging company on the board. Advisory Boards will often feature voices from local governments, environmental justice (EJ) groups, recyclers, composters, producers of covered materials, and more. 

The Fee Structures 

Packaging EPR laws often set target recycling and composting rates that the PRO and producers are responsible for meeting. For example, California’s law has the goal of reaching a 65% packaging recycling rate by 2032, with interim goals along the way. They also typically have goals to harmonize recycling rules and processes across the state to support better infrastructure and make it easier for consumers to participate in recycling. Some states, like California, also set goals on packaging reduction for brands/manufacturers. For example, California’s EPR bill, SB 54, has a goal to reach a 25% reduction in single-use plastic packaging by weight and unit by 2032.  

The fees collected from producers are also used to facilitate incentives created by EPR. EPR schemes tend to include the concept of eco-modulated fees. Eco-modulation refers to adjusting rewards or penalties based on the environmental impact a packaging type may have. Packaging types and materials that are less environmentally friendly will receive higher fees or penalties, while materials that are better for the environment receive a reward or lower fees. Different laws will interpret “better for the environment” in different ways, but thus far, the EPR laws in the U.S. are designed to reward packaging that is more recyclable, so less likely to end up in a landfill or littered, and/or uses materials more efficiently (using PCR content, lightweighting, etc.).  

For example, producers may be charged higher fees for difficult-to-recycle packaging, like plastic films, while there may be lower fees for packaging that is curbside recyclable or uses recycled content. Fees create incentives for brands to reduce the amount of packaging they use and to switch to more recyclable or compostable packaging. There may also be incentives built in to move away from single-use plastic packaging. These fees and recycling targets also create upstream incentives to incorporate circular principles early in a product’s production, rather than as an afterthought, as is traditionally done in a linear system.  

The PRO then uses the funds generated from fees to fund the collection of materials, improve the recycling system, and develop special take-back programs for certain materials.  

As of this writing, we do not know what the exact fees are in any of the EPR states. While there has been some concern over whether the fees will truly be lower for more “sustainable” packaging, we do have reason to think that the fees will be higher for more difficult-to-recycle packaging such as flexible films or expanded polystyrene foam. 

Each state has released the dates producers will have to begin their payments:  

  • Oregon: July 1, 2025 
  • Colorado: January 1, 2026 
  • California: January 1, 2027 
  • Maine: By January 1, 2027 (at the latest) 
  • Minnesota: By February 1, 2029 

It is also important to note that two other states, Maryland and Illinois, have passed “study bills,” which are “pre-EPR” laws where the states decide to do extensive studies on what the state’s recycling system needs. CAA has even been named as the PRO in Maryland to represent producers’ interests. That said, neither Maryland nor Illinois have scheduled dates by which they will impose fees on producers. 

What are the covered products/packaging types?  

In the language of EPR laws, “covered materials” are the products that are subject to recycling targets and fees. Packaging that is considered “covered material” under EPR schemes in the U.S. typically includes any separable, distinct component used for the containment, presentation, and/or protection of a product from a producer to a consumer, especially single-use plastic packaging. This may include cardboard inserts, stickers, cardboard boxes, poly bags, food and beverage containers, foil and wraps, straws, utensils, and more. As such, covered materials typically include primary, secondary, and tertiary/logistical packaging, along with disposal food service ware. However, covered products may differ between states. For example, Colorado’s EPR laws don’t reference packaging used for the presentation of a product (stickers, etc.). Please see our resources at the end of this deep dive for links to state-specific covered materials.  

What brands should do now

First and foremost, brands should register with the PRO!  

CAA is actively registering companies that think they will be obligated producers under the EPR laws in California, Oregon, and Colorado. CAA originally asked for companies to register by July 1, 2024. At this time, it is free to join CAA, so if companies are unsure whether they should join, it would be better to go ahead and register. This will ensure the company will receive key information about deadlines and information on whether they will be obligated to pay fees. There may be a registration fee after July 1, 2024. Producers can register at 

While there is a great deal of uncertainty surrounding packaging EPR laws and implementation, there are a few things companies can do now to prepare: 

  • Assign a point person at your company to register with CAA and stay on top of updates to EPR laws and implementation. You may even consider seeking legal counsel. 
  • Begin documenting all your packaging SKUs, including weights and material types, to record baseline data for CAA. To provide the most comprehensive data, you may need to record 2022, 2023, and 2024 packaging data to comply with baseline data requirements in the different states. You’ll also want to understand how your company’s packaging data is documented so that you can more easily provide it to the PRO in future years. 
  • Document all the ways you have reduced your packaging and/or made it more recyclable in the last 7-10 years. This could include recording any lightweighting, switching to recyclable packaging, PCR content use, etc. your company has done. 
  • Keep an eye out for any future opportunities to reduce your packaging and make it more recyclable – Atlantic Packaging can help with this! Check out our extensive sustainable packaging tools on our Sustainability page and on A New Earth Project’s website. 

Packaging EPR likely represents the biggest shift in packaging incentives in recent history, and we’ll help you stay on top of it here with more Deep Dives and resources in the future. In the meantime, here are some resources to dive even deeper: 

State-Specific EPR Law Pages: