Feature: Corporate support builds for producer responsibility in US plastics recycling

This story is the second of a two-part series exploring the growing emphasis on recycling legislation in North America. Read part one here .

As US recycling rates for plastics remain low and environmental accountability increases, corporate support is growing for Extended Producer Responsibility programs.

In the Northeastern US, Waste Connections executives recently cited an increasing focus on legislative measures among the factors increasing the company's exposure to recycling markets.

"There is also a push for [waste-]diversion legislation and recycling in many states that, up to this point, there had not been as much of a push," CEO Ron Mittelstaedt said during a February earnings call. "So it will ultimately continue to develop, and we're good with that. That extends life of our landfills, which are a non-replicable asset."

EPR policies use packaging fees to direct industry funding toward improving the recycling system and motivating brand owners to make their packaging recyclable. A state may select a producer responsibility organization to administer the program.

Demand for US recycled resin—including recycled high-density polyethylene and recycled polyethylene terephthalate—has struggled since early 2023, attributed largely to new domestic capacity that has suppressed prices for virgin pellets.

The price spread between recycled and virgin HDPE resin was last assessed at 28 cents/lb Feb. 23, a far cry from the 94 cents/lb assessed in early June, Platts data showed.

But the lack of post-consumer recycled content mandates also is frequently cited as a significant factor. Buyers who are not bound by mandates may opt for the most-cost-effective option, according to both buyers and sellers.

Although myriad voluntary PCR targets exist for 2025, current post-consumer plastic supply is sufficient to meet demand.

More than 75% of US recyclable material is lost at the household level, however, according to the 2024 Recycling Partnership State of Recycling report. This could quickly become a serious issue, when demand for PCR soars and supply stagnates, sources have said.

So far in 2024, several states have introduced bills relating to EPR. A bottle bill proposal in Washington state failed in mid-February despite support from beverage bottlers.

Four states previously passed legislation to encourage collection and offset costs for post-consumer plastics, including polyethylene terephthalate and polyethylene, and are at varying stages of establishing EPR schemes:

• California: Circular Action Alliance designated PRO; by 2032 single-use plastic to be reduced by 25%, 65% of single-use plastic recycled and 100% of single-use packaging and plasticware is recyclable or compostable;
• Colorado: CAA designated PRO; in January 2024 CAA released a needs assessment;
• Maine: Producers will directly reimburse municipalities for recycling and disposal expenses;
• Oregon: First set of EPR rules approved in late 2023. Recycling program changes will start in July 2025;

CAA also will participate in the Maryland advisory council for the state's needs assessment.

"EPR policies incentivize packaging manufacturers to invest more in [research-and-development] to make packaging recyclable," said one US recycler.

Conversely, low landfill fees—also known as tip fees—also do not encourage innovation, the US seller said.

Nationwide tip fees in 2022 rose by an average of 8% on the year, to an unweighted average of $58.47/mt, according to a June report from the Environmental Research & Education Foundation.

Tip fees also varied widely by state. For example, among states sharing a border with Canada, charges ranged from an average of $28.20/mt in Montana to $107.67/mt in Maine.

High fees to use Canadian landfills can make transporting post-consumer materials across the US border for disposal more attractive as well, market sources said.

Neighbor to the North

In contrast, Canada generated an estimated 978,743 mt of plastic packaging in 2022, according to an annual report from the Canada Plastics Pact.

Of that amount, 20% was recycled, up from 12% in 2019, the report said. During that time, recycling of flexible packaging increased by 3 points to 4%.

And between 2020 and 2022, PCR use among CPP signatories rose by 32%, the CPP report said.

Each of the 10 Canadian provinces has either assigned full responsibility for plastic waste to producers or is transitioning to 100% obligation.

• Alberta: Transitioning to EPR in April 2025;
• British Columbia: Recycle BC launched in May 2014;
• Manitoba: EPR program moving to 100% from 80%;
• New Brunswick: Transition to EPR launched November 2023;
• Nova Scotia: EPR to be implemented December 2025;
• Ontario: Circular Materials PRO administers common collection system; 100% EPR fully implemented by 2026
• Quebec: Éco Entreprises Québec designated PRO in 2022

"Canada is a lot more like Europe than like the United States," said one US seller.

As part of Ontario's EPR program, US waste company WM was awarded two recycling facility projects.

Tara Hemmer, chief sustainability officer at WM, said: "Extended Producer Responsibility in Canada and the structure that we have there, it really is around us using those assets as manufacturing plants, and really a fee-for-service model. So it's a great example of how we can leverage this technology differentiation for more business in the future."

Corporate support

Canadian provincial governments are not the only bodies embracing European-style recycling initiatives.

Jim Fitterling, CEO of US-based Dow, recently cited EPR and other legislation for encouraging the company's focus on circular investment in Europe.

"We've got some capacity coming up in Europe," he said during the company's quarterly earnings call in late January, "and we started there because the enhanced producer responsibility schemes are there."

Similarly, Eastman CEO Mark Costa said EU legislation is helping drive the circular economy, citing a requirement for 25% recycled content for beverage packaging for 2025.

Costa, however, described the US legislative landscape as a patchwork.

"Every state is developing a different point of view around circular economy and how they want it to play out," Costa said.

Nevertheless, Eastman customers are asking for 100% recycled content, Costa said.

"They don't want anything less, because they want to have a bold claim," he said.

Eastman started up its first US methanolysis plant in late 2023 in Kingsport, Tennessee, and plans to build similar plants in France and elsewhere in the US. Methanolysis is a form of advanced or chemical recycling that breaks down polyester into its molecular building blocks to create virgin-quality resin.

Although Eastman has yet to make final investment decision on its second US plant, the location of which has not been publicly disclosed, the company plans to start construction of the French plant by late summer 2024, Costa said in the earnings call.