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Home My WebLink About2021-08-25 EMC agenda item 5-b(1) - The FAQs of EPR _ Greenbizuwwi�' u /,1i uumli� flllliouuu By Suz Okie August 9, 2021 Suz i Analyst, Circular Economy GreenBiz Group Shutterstock Just over a month ago, I cited the lack ofextended producer responsibilitv_(EPR) bills pertaining to plastics and packaging in the United States as a cause for concern. As of July 13, I'm thrilled to share it's time to print an update: The U.S. went from zero EPR bills related to packaging to one, when Maine Gov. Janet Mills signed LD 1541 into law. While Maine has taken home the gold, Oregon is hot on its trail with its own packaging EPR bill awaiting the governor's signature. Additionally, nine other state -level EPR bills (not to mention a federal bill) are under consideration. But with all this momentum has come a mountain ofconfusion around the nuts and bolts of EPR. To better understand the mechanics of Maine's newly minted legislation, I sat down with Sydney Harris, policy and programs manager at the Product Stewardship Institute (PSI). Collaborating with on -the -ground organizers such as the Natural Resources Council of Maine — a nonprofit that was instrumental in getting the new law across the finish line— PSI has been building capacity and laying the groundwork for EPR over the past 20 years. Here are some frequently asked EPR questions that Harris helped me answer: • As with all EPR legislation, the bill for end -of -life management — in this case, for transporting and recycling packaging materials — will be footed by the " producers" that make these products and bring them to market. But multiple companies — everyone from resin producers to retailers— have their hands on any given product or package. So, who's responsible? "For the most part, it's consumer brands," Harris said. "If you buy something, chances are the brand you see on the packaging will have paid the fee. They're the ones that choose what their products go into, so it's only fair that they're the ones incentivized to choose sustainable packaging." "lfyou buysomething, chances are the brand you Of course, there area couple of exceptions to the rule. Nonprofits and select producers are exempt, with producer exemptions tied to annual gross revenue (less than $5 million for the bill's first three years, less than $2 million thereafter) or annual volume of packaging sold in Maine (less than 1 ton of packaging, or less than 15 tons for producers of perishable foods). Other rare cases might charge retailers if they are solely responsible for importing a product into the state, although such occurrences will likely be uncommon. What will it Cost? While Maine taxpayers currently cough up an estimated $16 million to transport and dispose of their packaging, the sum of money LD 1541 will raise is yet to be determined. Maine's Department of Environmental Protection (DEP) has until December2023 to initiate a variety of rules, including the precise costs associated with each individual packaging material. From glass to paper to plastics, each ton of material brought into the state will come with a fee. As to what that fee wi 11 be —stay tuned. One thing we do know is that an "eco-modulation" system will tip the scales to benefit or discourage certain packaging designs. "Eco-modulation is a reallyfancyterm for fin ancial incentives," shared Harris. Through this system, materials such as black plastics, which are notoriously hard to recycle might carry a higher cost per ton than, say, clear plastics. While we don't yet know how the DEP will sort out the calculus, we do know it will encourage a laundry list of recyclers' dream criteria, with fees incentivizing recycled content, ease of recyc[ability, lower toxicity, increased reuse, reduction of litter and amount of materials used —even labeling that reduces consumer confusion. •w wit[ the money be • First and foremost, collected fees will reimburse Maine's municipalities for the cost of recycling packaging. "It is unlikely that municipalities will get 100 percent of their [packaging] recycling costs covered, even though that might be the goal," Harris noted. If we look to Quebec, a province that boasts a simi [a rly structured EPR system, the average municipality is reimbursed for96 percent of its costs. "That's pretty good." Beyond municipality reimbursement, a small portion willcover the EPRsystem's overhead costs and, perhaps more excitingly, funding will beset aside for education and infrastructure. Written in the bill is a required, in-depth assess mentof recycling infrastructure across the state. Once gaps are identified, recommended infrastructure investment and consumer education could be approved by the DEP. Who will run the system? Maine's DEP will have a lot of responsibility in the new EPR system, but it will not manage the process alone. The DEP will contract a stewardship organization — also referred to as producer responsibility organization, or PRO — to handle a variety of responsibilities. While notyetformed, the stewardship organization could likely be a nonprofit or conglomerate formed by a group of producers and brands. In charge of the day-to-day operation, it will provide the DEP with an annual report on thevolume of packaging being brought into Maine. In this way "the onus will be on the brands to be transparent about everything they're putting on the market," Harris explained. " The onus will be on the brands to be transparent about everything they're putting on the market. " Beyond collecting and reporting data, the stewardship organization will be inch a rge of collecting brand's fees for a stewardship fund and for performing the recycling infrastructure assessment previously mentioned. A key difference from other EPR systems is the fact that Maine's DEP is contracting the stewardship organization, rather than letting them operate on their own. This gives Maine a lot of control when it comes to the management and oversight ofthe system, keeping powerwith state and local governments. With the signing ofthis historic bill, Maine may have set off a ripple effect impacting future legislation and packaging decisions across the country. When I asked Harris ifshe anticipated packaging offerings to change beyond Maine's borders, she was a bit more conservative in her speculation. "Realistically, it may take some time before we see any dramatic shifts in the types of packaging being brought to the market, but this is a critical step in the right direction." One thing Harris will be keeping hereye on is the tipping pointwhere we see nationwide changes in packaging choices. "[How many state bills] will it to ke? I think that will be one of the really interesting things to track." [Interested in more on the Circular Economy? Subscribe to our Circularitv Weeki newsletter, sent Fridays.] % 10 tl U)l l I'll g hil We ri per ,, II 0 0 %�m1re c elr1b oIri gJ)%Ids rpoIdIL;;;ri ' 1,,;JJ,p11 all My E,,,, fac, -a Ulu ol,lirn — f[o,Uul"I"o More on this topic Share this article " is ,4 i y� i, i% %7Ir a The urgency around plastics in 3 numbers by Suz Okie Durability is back in fashion by Suz Okie What Biden's infrastructure pIan fails to reimagine by Suz Okie Right to re pair is on thew M by Suz Okie (3,et artidles like d fds d6livered,to your h-vdbox Subscribe Neh/voirlk Le d �i Meda KI. NevvAel.l.eirs Caireeirs @ Gireein&z �I�J.pijA �eairn Webcasts Edfl.oiNA GuHefiines Qireein&z feairn Resew clh,Rejppir!, s, Us V I i.e, Pa pg eein&z 350 Podcasi. r ............................................... 5pipippid. iiin lllir:vacy lllolk�y GV 201,9 GireoinlB I z GI-41D Ina. GIRT 1: NIB Z' ond GIRI: 1: NITZ.-COM, al". res I stered tradei,narks of Gir-inlB, GI'OU ID 1111