Commentary: EPR is frequently cited, often misunderstood

With the signing of Washington State’s packaging extended producer responsibility (EPR) bill into law, we now have seven states that have programs in various stages of initial implementation. The Annapolis, Maryland-based Flexible Packaging Association (FPA) has been actively engaged in every negotiation and has developed expertise in this new policy arena for the United States. As policymakers and their staff become more familiar with this policy, it is essential to clarify what we mean when referring to EPR.

What is EPR?

Dr. Thomas Lindhquist formally created the principle of EPR in the 1990s and provided us with a definition, saying that “Extended producer responsibility is an environmental protection strategy to reach an environmental objective of a decreased total environmental impact from a product, by making the manufacturer of the product responsible for the entire life-cycle of the product and especially for the take-back, recycling, and final disposal of the product.”

At its core, EPR is an economic policy designed to shift the financial, and sometimes operational, responsibility of the end-of-life management of products from consumers and government to the manufacturer (producer) of the product. Necessarily, EPR will facilitate the construction of additional infrastructure to mitigate that while also incentivizing product design for less impacts on the environment.

The Paris-based Organisation for Economic Co-operation and Development (OECD), drawing on Lindhquist’s body of work, further clarifies that EPR is “not a tax.” While EPR compliance schemes may trigger a fee for producers, the fee pays for a service. Fees may cover the full net costs for the collection and recovery of covered products.

As a north star, FPA encourages all stakeholders to focus on the critical feedback loop that is necessary for market forces to address system-wide impacts correctly. A primary desired end state of EPR is that materials that are more challenging to recover or reuse will be economically disadvantaged compared to alternative materials that are widely recyclable or compostable. To preserve that principle, fees on materials should be based on their recyclability/recoverability and what funds are needed to pay for the infrastructure costs associated with that material. These fees must be dynamic, increasing when materials are sent to landfills but also have the ability to decrease as infrastructure advances to manage that material responsibly.

If this linkage is broken anywhere along design or implementation of the EPR program, the market forces that are the real “enforcement mechanism” of EPR will not work.

Seven states gearing up for EPR

While FPA strongly supports EPR as a policy principle, it is perhaps unsurprising that the battleground of American politics has yet to produce a “clean” EPR bill. Other interest group priorities, such as material bans (often incorporated into statute through unrealistic performance standards), labeling schemes, state-led toxics initiatives and more, often are included in the political sausage-making process and to the detriment of increasing funds for responsible product management. In fact, FPA has only fully supported two of the seven EPR laws that have passed—Minnesota and Maryland—because they lack conflicting goals and objectives. In other words, they are the closest versions to the core concept of EPR we have had the privilege to work on.

As we look to the future, states with “cleaner” EPR laws will have their programs come online quicker and efficiently deliver more funds to build out recycling infrastructure. The feedback loop between industry and implementing agencies will be stronger, allowing for the required innovation that industry can bring to the recycling space. This innovation will enable the correct collection, sorting and recycling of newer formats and materials, including flexible packaging, into new products. We are confident we can look forward to these scenarios becoming reality in states like Maryland and Minnesota.

In states that combine EPR with other policy initiatives, programs risk becoming mired in overburdensome requirements and regulation, undermining the goal of building recycling infrastructure because the goals of those policy initiatives are at odds. For example, states that combine EPR, which is intended to build out new recycling infrastructure for materials that are not being adequately addressed by the status quo, with a recyclability labeling framework that is based on a sampling of aging, traditional recycling infrastructure, will give regulators two interconnected programs with goals that run counter to each other and cause consumer confusion. In the same vein, oftentimes EPR legislation gets counterintuitively lumped in with attempts to restrict certain recycling technologies.

At face value, material bans would seem to decrease the environmental impact of products. Setting aside the fact that it breaks the critical feedback loop that EPR is attempting to achieve, packaging formats have been competing on environmental metrics for decades. In fact, flexible packaging is a result of market pressure for improved product-to-packaging ratios, a smaller carbon footprint and a desire to source-reduce to become more efficient.

Once policymakers familiarize themselves with the historical context of the packaging industry, it becomes apparent that material bans can set industrial-driven environmental progress back decades if we ban innovative materials without having more environmentally friendly formats in place. We can see these conflicting goals play out in the reissuance of regulations, a myriad of cleanup bills, and likely a mixed bag when it comes to actual improvement in recycling rates across the seven EPR states.

When considering EPR legislation, we must ensure we do not conflate the goals of designing for recycling and recycled content with design for environment. In the case of flexibles, the same advancements that provide their environmentally superior profile are the same reasons they are challenged in the aging recycling stream, but investments through EPR could help us break that cycle and support those innovations and systems that effectively are recycling and reusing these materials, so we get a win-win on design for environment and recycling.

As legislators seek to implement lessons learned from other states and prevent program performance goal confusion, one tool they can turn to is the needs assessment. Needs assessments should predicate and inform the EPR program to keep the program data-driven and provide producers with a realistic data set to make investments. These needs assessments should be material-neutral and include all unique recycling data for all covered materials.

In a similar vein, there should be enough time in statute for a producer responsibility organization (PRO) to form, consider the data and develop strategies to increase collection rates for each covered material category before the program is implemented. Needs assessments can also provide data to inform performance metrics that policymakers want stakeholders to monitor as the program starts building out infrastructure.

FPA will continue to engage on all packaging-related EPR legislative and regulatory proposals as they move forward and remain a resource for policymakers and their staff as they become familiar with EPR as a policy framework. While FPA has long been engaged in this issue area, we look forward to learning additional lessons on EPR, as no U.S. program has been fully implemented yet. We fully expect additional opportunities for legislators to iterate the types of bills that reach the finish line and more fully deliver on the promise of a cleaner environment and innovative packaging that delivers on food shelf life, sterility and product protection across the economy.

Dan Felton is the president and CEO of the Annapolis, Maryland-based Flexible Packaging Association. To learn more, visit www.flexpack.org.