Rise in regulations could impact paper, plastic markets

An increasing number of bills have been pursued at the state level that could impact the recycling industry, according to Institute of Scrap Recycling Industries (ISRI), Washington. Across the U.S., state legislators are introducing bills pertaining to single-use plastics (such as banning straws or disposable flatware), auxiliary container bills, bottle bills and bills related to extended producer responsibility (EPR). 

Bernie Lee, research analyst of commodities at ISRI, reports that about 30 bills have emerged at the state level that are focused on changing single-use plastics in 2019. Similarly, state legislators have introduced 135 auxiliary container bills in 2019. Lee notes that there is some “overlap” in bills that fall under the single-use plastics and auxiliary container categories.

“It’s not clear-cut,” he says. “The way we categorize them is single-use plastics has the key word ‘single-use plastics’ in the bill language.” 

Lee adds that only 106 bills at the state level related to auxiliary container bills were introduced in 2017 and 2018 combined. 

There have been 112 bottle bills introduced at the state level in 2019. Lee says many of these have been focusing on increasing deposit values for the program. However, he says many of these bills do not have clear definitions on how these costs will be handled. 

“The number of bills in play may have sort of effects on how plastics will be priced in the marketplace,” Lee adds. “If redemption rates are higher than they’re worth, it will create a squeeze. We need to make sure these bills won’t have deleterious market effects.” 

Lee notes that paper and plastics processors might want to track the bottle bill legislation in Maine, Massachusetts and Oregon, specifically. 

Also, 11 bills emerged related to EPR this year. In the past, Lee says this type of legislation was more related to the electronics recycling sector. Now, he says, there is more concern around packaging materials. 

“We’re seeing marked increases already compared with last year on the number of bills addressing extended producer responsibility,” Lee says, noting that paper and plastics processors should keep an eye on packaging EPR bills.

Lee adds that two EPR bills are on the floor in Massachusetts; however, these are moving slowly. He says Texas also has an EPR bill that aims to stimulate materials as a feedstock for manufacturing. 

While neither Lee nor ISRI can make predictions on what bills would clearly impact the industry, Lee stresses that state legislation related to single-use plastics, bottle deposit laws and EPR need to be tracked by the paper and plastics processors. 

“There has been an increase in the number of bills,” he adds. “The public has a vested interest in seeing these bills—they are focused on climate change and ocean plastics. Your markets could change. I don’t know how, but these are some drivers that could change markets.”