EPR Is Operationalizing: What Does It Mean
If you get a little uneasy when you hear the phrase “EPR is operationalizing,” you are not alone. For years, Extended Producer Responsibility has been theoretical, directional, and stuck in legislation. But now, it is finally moving into day-to-day business operations. Launching the second season of the Change Cycle Podcast, Christine Yeager breaks down what operational EPR means for your business and how to deal with it with clarity and strategy. Learn how to proactively manage your data, be comfortable with the discomfort of change, and turn compliance into a strategic advantage.
---
Watch the episode here
Listen to the podcast here
EPR Is Operationalizing: What Does It Mean
I'm super excited to kick off what I am calling season two because when you own a show, you can make up whatever season you want. Here we are doing season two. A second year of doing this show. I'm super excited about this year for multiple reasons. If you read my last episode at the end of last season, you would have heard me talk about how I see 2026 where we shifted EPR to become operational. What does that mean? We're going to talk a little bit about that in our episode.
If the idea of EPR being operational doesn't only make you think of the dead star, then you're not alone and generally feeling uneasy about this idea of it kicking off and moving forward. I want to break it down a little bit. For years, extended producer responsibility in the US lived mostly in policy conversations and bills being introduced, bills being passed and frameworks debated. We had a lot of program plans drafted. It was all very theoretical and something to watch.
What's changing now is that EPR is moving into day-to-day business operations. That shift from policy to operations is what I want to ground us. This episode is about clarity, not panic and prediction. Hopefully, we'll set a tone of where I'd like this season to go and talk about the good, the bad and the ugly of driving change and driving change into the circular economy. It will not be all sunshine and roses. Nothing really is. Change is hard, as we've talked about a lot on the show.
Vocabulary Check: Defining EPR And Other Terms
You can celebrate the goods and you can keep a clear eye on what's maybe more challenging and use that to overcome things. Also, we want to be very realistic and transparent about this and what this means for business, change, all the above. However, because this show is all about making things approachable, clear and not too intimidating. We will continue to start these solo episodes with a vocabulary check. I'm going to unpack a couple of terms. If you want to go deeper, there's a lot of introductory episodes earlier on in season one.
If this is your first time or if you have forgotten all of it because you ate too much food and relaxed too much over the holidays and you're still making your way back in. Although, hopefully, by the time this episode airs, you're feeling the groove. Nonetheless, Extended Producers Responsibility or EPR, and not to be confused with ERP, which is a technology supply chain system term. This is EPR. It's a policy approach that shifts the responsibility and specifically the cost of managing packaging and paper waste from municipalities to the companies that put those materials on the market.
What can change? It can be packaging or mattresses or textiles, as is the case in California. Nonetheless, mostly what we're talking about here is packaging in paper. That's because that's probably what the latest legislation that's going to impact the largest number of companies, consumers and people and also, producers. What does that mean producer? A producer is the entity that is legally responsible for EPR compliance. They are the obligated party.
It's not always the brand name on the package. Depending on the state and the product. It is generally the brand owner. It can be the first importer or a distributor. It can be the first entity that sells into the state. In some cases, it can be a retailer who owns brands. It's critical to understand what the definition of producer is because everything downstream relies on who is ultimately obligated. There's a producer responsibility organization, which is generally founded by producers. It depends on the structure, but it's basically where producers come together or select an organization to help administer the extended producer responsibility legislation in compliance with that legislation on behalf of producers.
It's generally made up of producers or at least producers have to register with this organization. Each state selects their own based on various factors. In the United States, Circular Action Alliance is the approved producer responsibility organization for all the states that have passed EPR and made their selection. That organization collects data and sets and collects fees. Contracts with service providers, we're on that in a minute. They reimburse eligible costs and they report to the regulator. They align with the regulator on what those eligible costs are and what the plan will be for improvement
.
Producers don't run the EPR programs. The producer responsibility organizations do, but the producers are obligated by the law to be a part of a producer responsibility organization then you have service providers. A service provider is an entity that supports collection, transportation, processing, sorting, recycling, reuse or in market delivery under this EPR program. This can be a hauler or a more firm material or a recycling facility. It can be a processor. It can be a recycler, so somebody who takes the material and then turns it back into something else.
It can be somebody who uses it for reuse. It can be a composter, depending on the state. It can also be the entity that sells the recycled material at the end of the day. That would be a responsible end market I think of recycled PET. Service providers are where EPR is being implemented and becoming real. You see the investment going to these surface providers making the overall cost of processing or managing that material go down.
Responsible end market is a verified destination where material is reused, recycled or composted in a way that meets environmental labor and transparency standards. The detailed definition of what qualifies as a responsible end market is different in each state. Basically, it needs to be reused and not end up in the landfill. A material if nobody is going to buy it at the end of the cycle, then it's not considered a responsible end market. Even if it might be processed at a recycler, but then still ends up at the landfill.
This is where people say recycling is broken. The fact that this responsible end market is written into the law and the definition of what that looks like is written into the program plan and to meet the requirements by the regulator. That is what's going to make recycling not be a farce, basically. If you can comply with the definition of responsible end market, that means you can trust that it's going somewhere and being reused.
We have eco modulation, which is I would say one of the terms that is the toughest to understand. I'll probably have an episode in this season that goes deep into all the aspects of eco modulation. Basically, this is the concept of adjusting EPR fees based on environmental or eco related attributes, such as recyclability, is it detrimental to the recycling stream, is it easy to recycle and what is the overall environmental impact. It comes to life in two ways. There's the base fees that are modulated based on how recyclable material is and then there's whatever one talks about which is eco modulated benefits or malices. Which can come in above the base fees. It's not a discount program. It's a way to incentivize better behavior.
We have registration and reporting. A producer must register with the producer responsibility organization. It's basically saying, "I'm a producer and I'm obligated." There's various deadlines per state for you to say that you have done this. Once you have registered, you have to also stay in compliance. The producer responsibility organization, in this case, Circular Action Alliance is all obligated to report if you are not staying within compliance to various states. There are very definitions of penalties for not being in compliance.
You have reporting, which is submitting your data about what you sell into the particular market that is where you might be obligated. You have to register. You register once and then you report in line with the reporting cycle and you need to do both of these things to stay in compliance over the long term. There are fees. I talked about eco modulation. That's an approach to setting the fees, but then there's the fees themselves. The fees are assigned to each material type. You have administrative fees. It's the cost of covering the people and the activities to establish the program and set it up.
You have the cost of funding with the program or the recycling. For example, in Colorado. One hundred percent of the cost of recycling needs to no longer be on the city's budget and fully on the producer responsibility organization. The cost of recycling for one full year becomes a program fee. There's this requirement to incrementally improve recycling rates over time. The costs will adjust as improvements need to be made and/or, eventually in this perfect world, they've made all the adjustments and now the fees start to go down because the cost of recycling goes down. That's a very long-term outcome.
Fees sometimes or generally, start smaller and grow over time as more investments need to be made. As the things that are harder to improve, require more attention. What we're going to talk about is operational versus legislative. Legislative is bills, statutes, rulemaking, which is where EPR has been for the most part to date. Now, it started in 2025. We're moving into it even more into this phase of operational where we have deadlines, invoices, contracts and then reimbursements happening.
What Operational Actually Means (Vs Passed Legislation)
When we say operational, what do we mean? I want to start here because this distinction of operational versus legislation or VAST pass legislation is very important because companies to this date have probably been relying on their compliance organization or their compliance team to keep track of EPR and the progress. Now, the impacts need to come into your operations. Not only are the activities that companies are doing more operational and not only are the activities the pro is doing are more operational.
The impacts now need to be more on the operation side of the business if you want to get ahead of this. You can be a little more proactive and not on your heels all the time of what needs to be done, what this is going to cost and what changes this is driving. Data has been reported in 2025 and there will be a newer round of reporting for Oregon and Colorado and likely California due in May. Maybe even Maine. Reporting is now moving into a yearly activity. CAA is going to try to streamline these deadlines as much as possible, but it will depend on the way the statute is written and how states are coming online.
Fees are being set and invoiced. In January and February, people will be receiving another Oregon invoice and their first Colorado invoice. Those invoices are due within 45 days of being received. You have the option to split the invoice up. You pay twice a year, at the beginning of the year and again near July.
For the trash nerds, there's something exciting. The service providers are beginning to be contracted and reimbursed. That process is starting to work and people should start. In Oregon, they already were and will receive more reimbursement for their recycling activities. In markets are being evaluated and approved. A lot of the people being hired at CAA are more focused on operations like reuse or recycling as a physical activity and how we evaluate and approve appropriate service providers.
Markets are being evaluated and approved due to EPR. There has been a bigger focus on reusing and recycling operations as a physical activity, as well as how to evaluate and approve service providers.
This is the shift from an intention to execution. For those that have been participating thus far, it might be uncomfortable I would say probably for the producers and the service providers. There's a lot of requests now for data that you didn't have visibility into before. Oregon is a smaller market compared to California. You may have completed your Oregon or Colorado reporting, and you didn't have as many SKUs impacted, but then when you did your California reporting in November. You see the scale and that was only 2023 in your sales. If you've grown at all or if you've changed your portfolio at all, you're going to have to continue the work in defining the appropriate data associated with the SKUs that you sell into that state.
On the service provider side, you're now having to share metrics about what infrastructure you have. How effectively are you sorting? What is your contamination rate? You're having to do this on a monthly basis in some cases. It's a new flood of data and input. That takes time, especially when you maybe didn't have a system to do that before or it's all very manual and not connected. You're adding things together from various lines.
The data requests are very expansive and likely uncomfortable, then budgets. People were generally surprised by their Oregon invoice. We'll see how the Colorado one sits, but there's an anticipation that the January or February invoice that you're going to get is going to be 35% to 40% higher than the one received for Oregon. The budgets are being hit by this in a real material way. We're also exposing gaps and infrastructure.
You can see in the way that the fees are allocated, which materials are lacking infrastructure and therefore, will need the biggest investment to change. There's internal alignment and understanding. Now that you're getting these invoices, it's catching people's attention and making people aware of what this is going to be. There's a lot more demand on trying to understand what this is going to look like in the long term across states as they all come online.
Where We Are Right Now With EPR
That discomfort doesn't mean that this system is broken. It just means that the system is real. It's happening now. It's moving forward. It's doing its job in some ways like bringing to light the incentives and the change that needs to happen. We are now at a high level. California is deep in program plan development and reporting. We anticipate seeing the California program plan in the middle of 2026, like June or July. Which means you'll also see around that time likely an estimation of the fee schedule.
Oregon and Colorado are moving from planning into more of a routine. Fee setting and invoicing will be aligned for those two states. We'll see the invoices come out at the beginning of 2026. We'll see synchronized reporting deadlines in May, and then you'll see a new fee schedule in Q3 and Q4. Minnesota and Maine are advancing registration and likely will begin some level of reporting and early program mechanics. Maryland and Washington are close behind.
There was already a registration deadline for Washington, but besides that, there shouldn't be any reporting required for those two states. Therefore, also no invoices and no reimbursements yet. It's not important necessarily to memorize every date but, in general, it's good to understand that multiple states are now active at the same time.
If you haven't, it's important to sign up for the appropriate newsletters at Circular Action Alliance. You can stay ahead of the changing timelines. There's a couple of deadlines you cannot ignore. We saw early fees in California before full fee implementation. It was at a higher level of the fee categories. Think like plastic, versus each detailed plastic, metal versus aluminum versus steel. The fees were at a higher level. They were only to cover those startup costs. Which in some states is capped and cannot be more than 10%.
When you look across the industry and where EPR is, the 10% number is generally the industry standard around what startup costs will be. The fees schedule that came out in 2025 was more of an early fee and generally, about 10% of the fees that you would anticipate longer term. In 2026, you will see a new fee schedule. That fee won't hit in 2026, but you'll at least begin to see what California can look like on your P&L.
We had a lot of various different reporting deadlines in 2025. As I mentioned, in 2026, they will be a major deadline of May 31st for reporting in Oregon and Colorado, and potentially Maine. Maine also is expected to be more like startup fees. In 2026, we're going to start to see instead of like an invoice hitting here and an invoice hitting there. You're going to see this routine of invoice in January, and invoice in July. These are some of the big deadlines that are happening in 2026.
Legislative Reality: What To Expect And What Not To Wait For
As a producer, you might start to feel this feast stacking not because anyone did or not because it's wrong or we're behind. It's just because these programs are overlapping on top of each other and this is the nature of state-by-state EPR legislation. We will see some action in the legislative sessions. Now, I don't know exactly what we'll see and I'm more of an operations person. There are plenty of people out there in the policy space but New York, Illinois, Tennessee, and Connecticut, some of these states have been talking about EPR for years.
Producers might start to feel fees stacking not because they are behind, but because state-by-state EPR legislation is overlapping on top of each other.
Illinois had a needs assessment bill. The needs assessment content is expected to come back. In 2025, it won't come back, so hopefully in 2026. This spring, we will see renewed bill introduction, some reworked language and continued pressure from municipalities and waste authorities on considering EPR. I don't have a crystal ball but we have seen two a year on average in the last five years. I don't know that we'll see two in 2026 but it does seem like there's continued momentum. Also, I know there's a textile EPR that's being discussed in some states.
There's a lot of discussion around landfill diversion and what the right legislative tools to promote that. I wouldn't get hung up on the potential states because these core operational requirements are converging. Data, budgeting, internal coordination and all of those can be used no matter which states come online. If you can get a handle on the existing states, then you can consider doing some scenario analysis for what the future could hold.
Why 2025 Is The Last “Calm” Year
2025 was our last calm year and that's not necessarily a bad thing, maybe depending on your perspective. From an EPR perspective, in 2026, it won't be as calm. You'll see a lot more traction and I don't mean that 2025 was quiet. You were still able to be more in planning mode in 2025. Now, as more states come online, companies are going to have to start getting ahead and having meaningful changes to the way they manage their data and improve their reporting processes.
Also, in 2026, companies will need to build internal understanding and I mean that from both the producer's side and the service provider side. There's a lot of service providers out there that don't know that they can even request for reimbursement. Both sides of the coin will have to map data in their systems. Again, both sides of the coins need to engage their finance teams. For producers, socializing cost, estimating the total cost but then also looking at how our packaging decisions are impacted by EPR, especially in the innovation pipeline.
Where does it make sense to make adjustments? On the service provider side, what are our eligible costs and how can you start to get those redeemed? Ultimately, you want the service providers to use these investments so that you can make the cost go down faster. Again, it will be many years before that happens but if these service providers are taking innovative and effective actions that increase responsibility in market availability. If there becomes a commodity value to material or the commodity value goes up to a particular material. That lowers its overall fee.
If you deal with the problem in isolation, you will get burnt out. The more you can bring in diverse perspectives on how to approach it, the better and more strategic your approach will be.
Also, people or companies, in general, need to better understand their roles, especially the service provider side. What is the definition of that? Are the organizations that are in line with the program plan receiving or requesting their reimbursements? There are a lot of producers out there and this is a criticism I've heard of EPR of, "I want to do the right thing but now I feel like I'm going to have to pay double. If I invest above and beyond my peers, then I also have to pay the same fees that they're paying."
Beginning that conversation about what is the role of a producer in promoting the proper infrastructure. Again, the responsible in-market is created. People are using it and it has become a commodity value. Overall, a lot of 2026 will be unpacking that dynamic with Circular Action Alliance and the industry as a whole and figuring out how to maximize. If companies begin to model scenarios instead of reacting to these invoices or to what's going on, then we can see a shift and organizations can be more strategic about where they are leaning in.
Episode Wrap-up And Closing Words
In an ideal world, industry comes together. We're necessary to make a change for material that if it's steamed unrecyclable in California by 2032, it will cripple the industry. That's a tall order, but the earlier you can as an organization, think that way, the better off you'll be. The grounding truth that I want you to walk away with is, EPR is no longer abstract but it's also not unmanageable. The companies that will struggle the most are not the ones with necessarily the biggest footprints. They're the ones who waited for perfect information because that's not coming. This is complicated. It's ever evolving. You can't sit around and wait for final deadlines and final perfect information.
This season will be all about replacing fear with fluency, helping understand timelines, roles, and then helping understand where you still have agency. In the last season, I would always end with, why embrace change. In general, the answer to that has been, if you just wait around and you try not to embrace change, it's a futile effort. It's because change is constant. This season, I want to start to answer the question. What advice do you have for someone who is confronting change?
For this episode, I'm going to answer in the context of the changes EPR is bringing. First, I don't want you to confuse uncertainty with failure. EPR is evolving in real time and not having every answer now doesn't mean you're necessarily behind. Honestly, it means you're in the same place as everyone else. There's very few people that know a ton about EPR. Even those that do, know and recognize that it's evolving. There's only so much we can know for sure, but we can speculate and learn from other countries and other states in the past
In that context of uncertainty, and this is something that I learned a lot at Coca-Cola, who went through a lot of re-org, is to focus on what you can control because there's a lot that you can't control. Companies can control and understand their obligations by state. They can start to map their data even if it's imperfect and create that flexibility in the mapping of the data from the way they track their information to the definitions in the state. A company can start to bring other parties along. Bring in finance, the innovation team, the operations team and supply chain.
Discomfort is part of progress.
Bring them into the conversation early using those scenarios, building those scenarios. Instead of waiting for final numbers, you can bring in those scenarios and discuss with them a strategic approach to EPR. Which reiterates my third point, which is don't go it alone. EPR cuts across many organizations. Sustainability, in general. This concept applies to all sustainability initiatives. To be operational and sustainable, you have to think about the financial impact. You have to think about what's legally required, how this is going to impact your operations and supply chain.
The ones that are carrying it in isolation will continue to feel burnt out. The more you can bring in that diverse perspective to how to approach this, the better off your approach will be and the more strategic it will be. Treat this like a multi-year operational shift and not a one-time compliance task. This is something that if you start to look at where your fees are impacting, your P&L, where the industry is going, and what shifts that need to happen. You can start to weave that into your financial plan, strategic plan and your portfolio planning.
Instead of just reacting to each invoice as it arrives but setting targets on how we reduce these invoices over time. Not by sales, but by material choice. Remember that, unfortunately, which is the whole reason this show exists is that discomfort is a part of the progress. If it were easy, it would have been done before. It can feel harder than expected, especially when legislation is involved. That's not a signal to stop.
It's a signal that the system is moving and changing and change comes with discomfort. If you diffuse yourself on that, remember that discomfort is part of progress. That will help you mentally again with lack of burnout. EPR is not about perfection. It's about preparedness. With the right understanding of the timeline, this is manageable. Hopefully, this episode helps you start off the year with not fear but with optimism.