Extended Producer Responsibility (EPR): How New Recycling Laws Are Reshaping Packaging, Fees, And The Future Of Circularity
Today, Christine Yeager dives deep into one of the most transformative forces in the recycling industry: Extended Producer Responsibility (EPR). Christine unpacks how EPR laws across the United States are reshaping packaging design, recycling infrastructure, and brand strategy — turning regulatory pressure into powerful market signals.
From rising EPR fees on flexible films like plastic mailers and pet food bags to new definitions of recyclability based on collection access, sorting capability, and responsible end markets, the conversation explores how companies must rethink materials, cost models, and long-term pipeline plans. Drawing on insights from the Plastics Recycling Conference and recent developments such as CalRecycle selecting Land Bell U.S.A. to operate California’s textile EPR program, Christine breaks down what these changes mean for brands nationwide.
You’ll learn how EPR fees are influencing packaging lightweighting, material optimization, and national vs. state-specific compliance strategies — and why flexible film recycling, polypropylene cups, and textile recovery programs are becoming strategic battlegrounds in the circular economy.
If you’re navigating EPR compliance, sustainable packaging design, or recycling market shifts in 2026 and beyond, this episode delivers critical insights to help you turn regulation into opportunity.
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Extended Producer Responsibility (EPR): How New Recycling Laws Are Reshaping Packaging, Fees, And The Future Of Circularity
Welcome back to the show. I am happy to be here with you. I feel like in this season, we have really dug into a lot of topics at a deeper level. We touched on some of these topics last season, but we dug into education and why it is a component of EPR, but it is not a primary focus, at least from a funding perspective. We have been talking to a lot of various experts and brands. As I mentioned earlier in the season, the whole idea behind the season is to talk about the good, the bad, and the ugly of EPR and really try to unpack some of that.
EPR As A Market Signal & Vocabulary Check
We talked about what operationalizing something really means in the EPR landscape. We have talked about some of the deadlines upcoming and what that really means, and where to pay attention throughout the legislative session. I want to dive into EPR as a market signal. Again, this could be a good thing or a bad thing. That is true with all change. You can see it as a negative, or you can see it as an opportunity.
Nonetheless, it is a bit of a reality because if EPR were only chaos and cost, then it would not be spreading across the United States. Something is shifting. There is a reason why EPR is catching a bit of fire. I was recently at the plastics recycling conference with lots of producers and lots of service providers. They also merged with the merchants and content from the textile space as well. It was a really good cross-section of folks in the industry talking about both how recycling is changing due to EPR and also what to do if you are not in an EPR state.
One of the things I walked away with is that EPR is starting to change behavior and not just on paper, but also in strategic decisions, pipeline plans, and things like this. Before we get into it, always for these solo episodes, I like to start with a bit of a vocabulary check. Responsible end market. A responsible end market means that material is actually being turned into a new product in a way that is being reused, whether for durability or back into a similar product that it was originally used as.
Basically, it is a designation across the states, and each state has a slight nuance. It is saying that this material has a market value. It has a market in the economic sense. In most of the EPR laws, there is a requirement that all materials must eventually have a responsible end market. Now, some things will not, they will never be recyclable. There is some level of penalty for that in various states.
For example, in California, if your material is deemed not recyclable by 2032, you can no longer sell it into the state. Another vocabulary word is fees for EPR. This is what producers pay per pound of covered material sold into the state. Covered material is a material that is covered by the law. An example might be flexible LDPE, or it might be rigid polystyrene, or it might be expanded polystyrene.
It can be a form and material for covered material. The fees are associated with that material, the way that each state has defined it. As we talked through this and walked through this idea, I just want people to understand that these fees are based on and driven by total program costs, relative material costs.
If EPR were only chaos and cost, it wouldn’t be spreading across the United States.
How much does it cost to recycle a particular material? It is allocated across how much material is sold in the state, as reported by producers. Ultimately, materials that are harder to manage cost more. Materials with a responsible end market cost less per pound because there is a market value.
In essence, it is going to cost less to build the market or build the recycling infrastructure needed. I also want to hit on flexible films. Flexible films include things like plastic mailers, pouches, poly bags, multilayer material, multilayer laminates, like a chip bag, and pet food bags. Historically, these are very difficult to recycle curbside.
Some materials that are mono-material can drop off at a hard-to-recycle materials location. Under EPR, these materials are getting a heavier, higher fee and therefore are more expensive to use, which is creating cost pressure. A high-level definition of recyclability is that in extended producer responsibility states and across the nation, recyclability has to do with whether a person has access to drop this material off, so access to collection.
Once it is collected, can it be sorted? Is there a responsible end market available? Some places you only really have to talk about collection and sorting, and not necessarily that there is a responsible end market, but that is where EPR is really unique and stringent about this concept of making sure there is actually a responsible end market. If those three things do not exist, then the fees reflect that in reality.
Recent EPR News & Milestones
After that little vocabulary check, I just wanted to do a quick break for a new segment because a lot has been happening here in the EPR world. One bit of news that is very recent, as of February 27th, CalRecycle has announced the producer responsibility organization to be selected to operate their textile EPR.
Materials that are harder to manage cost more. Materials with a responsible end market cost less.
Unfortunately for me, that selection was a company called Landbell USA. I was part of an application for a group called Textile Renewal Alliance, and really bummed to find out that Landbell was selected. CalRecycle published a whole analysis of all the applications. On the optimistic side of me, I do not know that our application was necessarily lacking in anything specific, but CalRecycle made a decision to go with Landbell, and I will put the analysis in your show notes.
I am disappointed, but at the end of the day, I really want Circularity to be successful, and so I wish the best of luck to Landbell. Also, the Circular Action Alliance has recently shared some of its plans for California in 2026. They are outlining a little teaser around what they think real infrastructure build-out will look like, what funding mechanisms and operational milestones they are seeing. The state of California has released some preliminary needs assessments that CAA will use to build out its program plan, which is planned to be shared in June of this year, in just a couple of months.
That is fun to review if you like to read reports about waste infrastructure. That is an important milestone in this California journey that is worth reviewing if you are in the industry. As I mentioned, I was at the plastics recycling conference. I spoke at the conference about some of the content I am going to share around fees as a signal for shifting in markets. It was a great conference.
As I said, it was the first time they brought this multi-stakeholder audience together across Murph operators and brands to reuse textile discussions. It was a very broad audience and content, which I think allowed for a lot of really cross-collaborative and discussion. Somebody from CAA who is leading material and market strategy presented an in-market hierarchy for flexible film. It was really great to see this shared with this audience.
It was really helpful to see that they are looking at the in-market availability for flexible film as a hierarchy. If you have been tuning in, obviously, flexible film is not easy to recycle and is not recyclable in California, and also has a lot of very valuable properties that make it a really good choice to reduce waste and keep things fresh, and keep things from breaking, and things like that.
They showed it as a tiered system. Some materials will have to be downcycled into things that they could only be done once. The good news is that at least it is a part of the strategy they represented that things that are deemed durable goods can still potentially qualify as a responsible end market, which means composite lumber like truck decking is likely going to continue to be considered as an option.
However, they did also talk about the fact that when you have clean streams, then you should still explore the opportunity for food-grade recycled flexible plastics, which is great news. They are looking at it from each way to recycle might have its proper solution. They also had a mid-tier around trash bags and industrial liners, where food grade is not as important.
I feel like this was a really good signal to the industry that there are options for how to tackle this film recycling challenge. That is a shift, I think, just because it has been just a big question mark. Seeing it presented in this strategic way, hopefully, was a signal to the market to start thinking about where your responsible market fits into that strategy.
EPR Fees Driving Design & National/State Friction
Let us zoom out. I want to just take a minute to talk about these fees as a market signal. Is that good or bad? I had somebody come up to me after the presentation during the Plastic Recycling Conference and say, “I thought it was really powerful when you said that EPR and the economics of EPR are primed to disrupt the market.” He is in a certain plastics company and was like, “I am not sure that that is a good thing.”
EPR and its economics are primed to disrupt the market.
Fair enough, that is what we talk about on the show. There are tons of trade-offs to all of this. The reality is that it is changing the economics. It can be a good thing for your business, depending on how you approach it. It is also very much a risk to a lot of businesses. Fees are changing design conversations. We have talked about fees before, but it has been a while.
I will do another deep dive later as the next round of fees is announced. Hopefully, we get another deeper click on the California expected fees. Basically, the way the fees have been shared in the United States so far, recyclability matters. There is a big change between the fee distribution of materials that are considered recyclable versus those that are considered not collected.
In essence, not collected means not recyclable. It means that they are covered materials, but there is no collection process, and therefore no processing of that material. It is quite dramatic. That distinction is forcing design teams to start, especially as California starts to come on board, or if they are being proactive, then they are thinking, what does this mean, and how are we going to address it?
What does this mean to our business? What does this mean to our bottom line in the next five years, and how are we going to address it? Are all companies thinking that? The answer is probably no. The reality is that a lot of companies are still struggling to just get their reporting done. Some companies and many in the room, some in the room more than I expected, are thinking strategically and long-term about how EPR is going to impact their business.
Some of the examples that were shared either as a part of the presentation or by other people that I talked to across the conferences, one, of course, is lightweighting because if you use less material, then you will have lower fees, but there is only so much lightweighting we can do. Once companies have addressed lightweighting, they are then looking at material optimization. In some cases, that means shifting to a fiber material, like paper.
In some cases, it means shifting in a totally different direction and rethinking the package. In an ideal scenario, you are designing for circularity at the beginning. People are thinking about, “Do we really need that multi-layer pouch? Can we shift to a mono material? Is this compostable claim worth it? Is it going to help our corporate reputation, or is it going to hurt and be seen as greenwashing? How far can we lighten without compromising function?”
These are some of the questions that brands are starting to ask themselves. In response, some of the plastics companies are trying to give options to their clients. Where can I redirect? Where can I innovate in the direction that customers want? The other thing I will say about this from a brand perspective is that while these fees are rising in priority, at the end of the day, many of these brands operate across the United States and across multiple states that are not covered by EPR.
They are having these internal conversations about whether I create something that is specific to EPR states or do I create something that is national in scale and reduces my EPR fees? There is a cost-benefit analysis there. California is too big a market to ignore, but it is not close to Maryland. If your supply chain is just going to be delivering to EPR states, like when you can have a truck that only goes to seven EPR states, that seems unrealistic. Companies are having to grapple with this national versus state friction and to make decisions that are ultimately not going to cripple their P&L.
These fees coming in mean that infrastructure is starting to get funded. You can look at how Oregon has a published program budget. You can see how it is breaking down. Twenty-eight percent is going to processing facilities. Close to twenty-three percent is going to collection expansion. Eleven percent is going to these new pro-funded drop-off centers. Six percent is going to contamination reduction. Six percent is going to responsible end-market development.
These numbers will shift each year. This is a one-year program budget because they have priorities of things that they will need to address first, second, and third over the course of EPR implementation. They cannot ignore certain components. You see a heavier allocation to current infrastructure expansion, processing facilities, collection, things like that, and then a smaller bucket towards some of the tougher nuts to crack, like contamination reduction and responsible end market.
I anticipate that over time, you will see that shift. This is all just, I mean, we are in year two of program funding. Invoices for Oregon and Colorado went out in January and February. Time will tell. You can see it is very transparently showing us it means Circular Action Alliance is transparently showing the industry where the infrastructure will be funded.
EPR markets are being treated as a strategic lever. What do I mean by that? An industry that was and is already thinking about driving circularity to address some of these circularity challenges, even before EPR existed, saw them as threats to their business. Straws, for example. Overnight, everybody hated straws because of that poor little turtle with the straw on its nose. It was so effective. It is sad for sure. It is also a very small percentage of the plastic waste challenge.
Nonetheless, a huge shift in consumer mindset around straws. The industry started, and years before EPR was voted in or passed, they started these industry coalitions, some led by various groups. Closed-loop partners and the Center for the Circular Economy are one. In one of my previous episodes, we talked about the Petaluma project, where they were testing reusable cups in a whole community in California, with citywide reuse infrastructure.
There is also the recycling partnership that is funded by a lot of brands and other sources, investing in increasing access to recycling and access to collection, and increasing education and things like that. There are a lot of industry groups coming together to drive some of this. On top of that, you have this EPR potential carrot in this space.
Now you have got this incentive to redirect some of that funding into the states where there is EPR, because now there is potential reimbursement for some of those activities to drive a responsible end market. An example of that is paper cups, or cups in general. You have the industry making a shift to polypropylene cups. The industry is investing in ways to increase the recyclability of polypropylene cups across the nation.
Now, a similar discussion as we were talking about from the brand side is like, “Now I, as an industry coalition, have been driving up the availability of the recyclability of material, let us say polypropylene or paper cups. Now I need to make sure that I prioritize EPR states, or do I?” You have to make a strategic decision. If you prioritize recyclability in these EPR states, then it gets that designation, it gets that improved or decreased fee for the producer. You've got to do all of that at the expense of driving the overall strategic value for the industry.
You might also be seeing this with film sorting improvements or compostable materials being reevaluated. There is a lot of industry action happening that now has to layer on the EPR implications of that. One success is exciting, if you again are a waste nerd, is that closed loop center for the circular economy just recently, all of their efforts came together and now polypropylene cups have the designation of becoming "widely recyclable," which means if you sell a polypropylene cup, you can now put the how to recycle label on your cup that says widely recyclable. That is a national designation.
If we’re going to turn compliance into a competitive advantage, companies need to come together.
The how to recycle label, you scan it, you can go and find the recyclability qualifications for your particular community to a degree. It was a very exciting innovation when it came out. For those who find that recycling and navigating it is one of the hardest parts, it is understanding what your particular community can accept. Nonetheless, it is a big moment. However, it is not yet widely considered recyclable in California. There is still work to be done to navigate this national effort to EPR states, which is a shift in the thinking because, again, companies' supply chains generally work nationally.
Ultimately, the recycling access increased from 46% to 60% across the nation, which means that over 60% of the population in the United States has access to recycling polypropylene cups. That is exciting. Finally, one of the things that I walked away with after this conference is that companies are looking at this cross-functionally.
Cross-Functional Collaboration & Aligned Incentives
Large companies are creating cross-functional teams. Industry is looking at this cross-functionally by bringing the functions together. Even the signal of bringing these three conferences together was just to show that we need all of these people talking. By all of these people, I mean supply chain, Murph operators, brands, finance, sustainability, packaging engineering, R&D, regulatory, within your company, and externally, like industry coalitions, industry actions led by CAA, and industry actions brought to CAA as options to build upon things that are already happening in the marketplace.
This is something that I care deeply about. We cannot solve this problem alone. If we are going to turn compliance into a competitive advantage, companies need to come together. We need all of these functions to come together into the same room if we are going to really unpack the market shift that needs to happen in order to be compliant and accelerate this ultimate reduction of fees. EPR becomes very inexpensive if the system changes faster.
This approach of people coming together did not always happen before, but this very real cost of EPR, which is obviously in the bucket of bad from a lot of people's perspective, is big enough that it is making waste a CFO-level conversation. I know ESG is a bad word, but that was a lot of the background behind why ESG is a component of how CFOs talk about risk. Why that was such a big movement for decades in the sustainability industry is that if the CFO is paying attention, then funding shifts, behavior changes, and businesses react.
What does this mean? Is this going to happen overnight? No. Are flexible films still a challenge? Yes. Is the perfect cup option for the food service industry still a challenge? Yes. Compostables are still a big question mark about what the right answer is. Is the definition of sustainable packaging easy? No. Is reporting still very hard? Yes.
As messy as all of this is, if you can cut through the noise to use a phrase that one of my mentors likes to use, then you can hone in on the market signals. You can hone in on the shift that this is incentivizing, and you can make strategic decisions about how your company is going to respond. That will be progress. Thank you for our session and for tuning in.
When incentives shift, markets move.
I have not done this in a long time, but if you have any topics that you wish you would like me to cover in this show, I may never have asked for this, but I am open to recommendations. This show was meant to help unpack a lot of the topics that some people find intimidating when it comes to sustainability or the circular economy. If you have any topics that you would like me to go deep into, please email the show at CSYImpact.com. I would love to hear from you. If you have any other feedback on the show, I would love to hear from you.
Next week, we are going to be speaking with somebody from a company called Credo Beauty. They are a retailer, and they also have private-label brands. They were a catalyst for the organization Pact Collective. Pact Collective collects beauty products for recycling. Now Credo Beauty is using that material in their packaging. It is really a beautiful story of prioritizing through sustainable packaging and circularity.
Not only do they do that from a packaging standpoint, but they also have a lot of clear actions that they are taking from even just what is in the product that goes into the Credo Beauty retail store. They evaluate and have a Credo Beauty standard. We are going to dig into that and talk about how they approach sustainability, circularity, and change.
Why embrace the change to the circular economy? I just want to leave you with, because I think this time the incentives are becoming aligned. When incentives shift, markets move. Years ago, people talking in the sustainability space were always saying, “If only we could get the incentives to change. If only we could get the market to equalize, if you will.” That is what EPR is trying to do. That is a reason to embrace this change.
Important Links
Public Notice: Review of Textile Producer Responsibility Organization Applications
2026 Plastics Recycling Conference: The growing need for systemwide change
Regulators, PROs sort through responsible end-market complexities
First Needs Assessment Published for California’s Packaging Producer Responsibility Law
PP Cups Reach ‘Widely Recyclable’ Status After Industry Collaboration