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Producers ponder what's ahead as another state takes new approach to recycling

Highlights

Oregon Senate Bill 582 to establish EPR program

Shifts financial burden to producers, away from taxpayers

Industry divided on program's effectiveness

  • Author
  • Sarah Schneider
  • Editor
  • Bill Montgomery
  • Commodity
  • Petrochemicals
  • Tags
  • United States
  • Topic
  • Environment and Sustainability

With a second US state having recently put into place an extended producer responsibility law and a wave of others considering doing the same, companies that package their products in plastic may see more incentives to use recycled materials and create more sustainable packaging designs.

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Gov. Kate Brown of Oregon signed the nation's second extended producer responsibility bill into law Aug. 6. Maine's governor did so in mid-July.

Lawmakers in at least six other states, from New York to California to Hawaii, have introduced EPR bills in 2021, though Maine and Oregon are the only states to have seen such legislation pass both their upper and lower chambers.

Extended producer responsibility, or EPR, aims to increase collection rates, which would increase the supply of recycled materials, by shifting some packaging end-of-life management burdens from consumers and governments to industry.

According to the Association of Oregon Counties, the state's current recycling system costs local governments and taxpayers $223 million annually. The PRO is expected to raise $83 million per year through annual membership fees to help offset some of that.

However, because the US has never successfully adopted an EPR scheme of this nature, unlike Canada and Europe, market participants are uncertain of its outcome, with some suggesting these laws may end up increasing the costs of consumer goods.

Recycling Solutions for Oregon published a letter of opposition, stating that the bill will raise state recycling costs by 30% while only increasing the amount of recycled material by about 3%. The letter was signed by the American Forest and Paper Association, Ameripen and the Consumer Brands Association, as well as 40 food, beverage and manufacturing groups.

The DEQ, however, estimated that covered products should increase by 17%, while Oregon legislators hope the EPR program will help achieve the state's goal of a 25% recycling rate by 2028 and its long-term goal of 70% by 2050.

How it works

Senate Bill 582, also known as the Recycling Modernization Act, will require most packaging producers operating in Oregon to join producer responsibility organizations. Such organizations, or PROs, will establish a schedule of annual membership fees proportional to PRO costs by product type, material and weight, according to the bill.

The collected funds are to be allocated by local governments to improve the current recycling system by funding existing facility upgrades, expanding collection services and contamination reduction programs, and covering certain transportation costs.

Certain producers are exempt from participating, such as those with a combined market share of less than 10%.

The PRO will also be responsible for improving accessibility to recycling in rural communities and multifamily properties, developing educational campaigns, and establishing a list of acceptable materials to standardize the recyclables collected.

Unlike in Maine, where the state's Department of Environmental Protection, or DEP, will have full authority for the program's development, Oregon's EPR program will be predominantly under industry leadership.

Addressing packaging design

In addition to creating an EPR program, producer members will have incentives to incorporate post-consumer plastic in their products as well as implement more sustainable packaging designs.

The bill also establishes a "Truth in Labeling" task force meant to "study and evaluate misleading or confusing claims" regarding the recyclability of product packaging. Members will include local representatives, packaging producers, environmental groups, recyclers and state officials. This 15-person task force is to repeal the inclusion of the chasing arrow symbol that often surrounds the resin identification code on packaging as it can mislead consumers into putting non-recyclable items into recycling bins.

Discussions surrounding packaging labels in one state could lead to the development of a national standard.

"Customer confusion caused by misleading [labels] leads to contamination resulting in increased costs and adversely affects processing, with the ultimate loss of access to responsible end-markets," Kristan Mitchell, executive director of the Oregon Refuse & Recycling Association, said in a statement.

Mixed industry response

Like in Maine, many environmental groups and recycling organizations have praised the passage of SB582, including the Oregon Refuse & Recycling Association and the Association of Oregon Recyclers. Over 100 large brand owners -- such as PepsiCo and Nestle -- endorsed a statement published by the Ellen MacArthur Foundation in support of EPRs for packaging.

"Without such policies, packaging collection and recycling is unlikely to be meaningfully scaled and tens of millions of tonnes of packaging will continue to end up in the environment every year," the statement on the foundation's website said.

But groups such as the Flexible Packaging Association, or FPA, have criticized the bill, saying the current EPR model takes away too much authority from producers and industry.

"Unfortunately, SB 582 is merely a tax under the guise of EPR," FPA CEO and president Alison Keane told Platts.

"The objective is to increase supply, but my fear is it won't. We'll look back in five years and just be paying more."

Also, Keane said the latest EPR bill doesn't go far enough to advance new recycling infrastructure and end-markets, but merely props up the state's current broken system.

"The good news is that both of them are going to take so long to be implemented, so we can go back and get better guidelines in place," Keane added.

PROs will have until March 31, 2024, to submit EPR plans to the Oregon DEQ and begin implementing such plans by July 1, 2025.