The Future Of Sustainability: Navigating Recycling, EPR, And The Circular Economy
Are we finally closing the loop on waste? In this mid-year round-up, Christine Yeager dives deep into the essential building blocks of a sustainable future. From the mechanics of Deposit Return Schemes and Extended Producer Responsibility (EPR) to the critical need for robust collection infrastructure, she breaks down what it takes to build a truly effective circular economy. Join us as we explore how these systems—and the right recycling initiatives—are shaping the next generation of responsible end markets.
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The Future Of Sustainability: Navigating Recycling, EPR, And The Circular Economy
I know we normally alternate solo episodes and interviews but life gets in the way and a couple of my interviewees I've had to reschedule. In this episode, we're going to do a bit of a mid-year news roundup. This is not a legislative session news cap. We've already had a bit of a policy update that happened a couple of episodes ago. That is the blueprint. This episode is about a bit of plumbing. The things that make circularity work. Here's the thing about 2026. The story in 2026 hasn't been about which states are passing EPR anymore.
The story is about the programs we already have now live and what's going on with them, invoicing, and some of them are getting sued. Some of them are building infrastructure. A lot of producers are still looking at the blueprint because they want to make sure they're compliant and looking at what's to come but we want to talk about when the money is moving. Where the material actually goes and where the friction is showing up now that these systems are running.
We're going to talk a little bit about some things that aren't even EPR and some of the stuff that's happening in states from a recycling standpoint without EPR funding. A quick vocabulary check. Redemption center or reverse vending is the collection point of a deposit return scheme where consumers bring containers back for refund. The design choice that matters here is whether the returns flow through the retail stores or through a dedicated drop. It’s depots and reverse bending machines.
Some people call these bottle bills or deposit return schemes. The location that you're doing that drop off or whatever is redemption center or reverse spending machine. Startup fees or pre-programmed are fees collected from producers before a program is fully operational to fund the initial build out. The staffing and system planning are not the same as ongoing program fees. These are sometimes written into the law. It cannot be more than 10% of the total program costs expected. Washington startup fees are live in 2026.
Circular Action Alliance (CAA) Role And Implementation Milestones
CAA is now the designated producer responsibility organization and every active state. Maine is still outstanding, but it's not active. Yet it hasn't requested formal reporting or anything like that. Washington was the last to make that decision. On March, 4th of 2026, Washington, Department of Ecology named CAA as the non-profit producer responsibility organization on the Recycling Reform Act Advisory Council. Producers there need to register by July 1st, but CAA has asked that you already registered so that you could have reported by May 31st.
What's good about this is now you have one pro that you're operating with across all six states. Which is easier for producers than six different producers’ responsibility for the organizations. Also note that Washington has a pre-implementation milestone hitting this in 2026. Reporting is being requested or was requested as a part of the May 31st deadline. Now, we should expect to see an invoice off of that reporting. That would cover startup fees.
That means that you're going to see these startup costs and a fee schedule most likely will be much lower than you would expect to see the final piece. The same thing happened in California. You saw an early fee schedule at the end of 2025. Later in 2026, they released a full fee schedule that had a much higher per pound amount per category.
Of note, though, since this isn't a statutory required deadline from a reporting standpoint, it's possible that some companies may not have reported for Washington. This happened in 2025 in California, where not everyone reported their baseline data at the end of the year. Those early fees are based on whatever data is available. Fees get set by CAA using producer supply data because there's not any other way to estimate how much pounds of material are sold into a particular state and then eventually thrown away. If there's not enough supply reporting data used to set the fees, then it can over inflate the fees per pound.
EPR fees are only as accurate as the producer data behind them. When reporting falls short, fees can be artificially inflated.
It can cause inaccurate fee setting for those early fees and, hopefully, you get more data for the next round of fee setting. The point is, this reporting gap can be a fee setting problem and not just a compliance problem. On the flip side though, I can understand why some producers may not want to report their data or at least I can see their argument. Which is that they don't want to report if it's not statutorily required because they're not sure if they're going to be held to those pounds moving forward. Maybe they get more accurate with their reporting later or something.
Federal Infrastructure Funding Supporting System Capacity
Shifting gears now. What's some progress that we've seen in recycling in the first half of 2026? Federal infrastructure money is still flowing into the system. The EPA Solid Waste Infrastructure for Recycling or SWIFR grant program. It’s funded through the Infrastructure Investment and Jobs Act. It carries $275 million allocated at roughly $55 million per year through the full year 2026. With additional implementation dollars layered in each year, the EPR funds operations and SWIFR funds the capital backbone. Some states have similar capitalism opportunities.
Colorado has something they call the CPU Grant. Both of them have to work for the material to move. Given the fiscal speed in the state, the budget gap pressure that's part of why no new EPR bills passed this session. The federal capital is doing quiet load bearing work. A real recovery infrastructure is reopening. On the ground, you're seeing shuttered capacity come back. The recent example is a Fresno Murph celebrated a grand reopening with a new 25-ton per hour commercial processing line.
Environmental Litigation Challenging EPR Regulations
These aren't headlined policy wins, but they are actual physical capacity the whole system is depending on. Fee schedules and reporting portals don't recover a single container. Sorting lines do. Watching processing capacity come back online is the more honest progress indicator than maybe most policy announcements might be. It's signs of progress in recycling infrastructure changing. Some costs and friction that we're seeing the first half of 2026. California is now getting food from the environmental side.
The California SB 54 recycling law now has a new lawsuit against it coming from the environment. We've talked a lot about the Oregon litigation. This is something new that happened on June 2nd of 2026. Three environmental groups, Oceana, the Natural Resources Defense Council and the Californians Against Waste filed a lawsuit against CalRecycle in San Francisco’s Superior Court over the finalized SB 54 regulations. There are arguments boiled down. The final rules added exclusions for large categories of plastic packaging allowing producers to claim indefinite exemptions and fail to guard against the recycling technologies, the law was meant to restrict.
Recycling technologies that are maybe harmful for the environment. One advocate's claim to the final regulation is adding more loopholes than the agency's own earlier draft. Why does this matter? This is the part producers might find confusing. The Oregon challenge comes largely from the industry distributor side, but the California challenge comes from the environmental side arguing the rules are too weak. It's still an EPR program with legal pressure, but now we're seeing it from both directions. If the exemptions to advanced recycling provisions get narrowed in court, it reshapes which materials can claim a recovery pathway.
Therefore, where they land on the fee schedule. This becomes material classification risk, hiding inside a lawsuit and it cuts against the instinct to weigh it out. It won't necessarily make EPR no longer a thing. It should have changed what is a prude from a funding perspective. It might mean they’re trickster obligations. Also, I said this might happen a couple of episodes ago, but New York has failed for the third straight year. It definitely did not pass. New York's packaging EPR Bill cleared the Senate and then died in the assembly for the third year in a row.
The return of processing capacity is a more honest measure of progress than most policy announcements.
It followed the exact same pattern. All sides expect the topic back in 2027, but the fault lines haven't moved. What happens next is genuinely unclear. If you're a national producer, repeating your near misses are arguably worse than a clean path or a clean failure. You can't plan against it maybe in 2027. New York has a huge share of national sales. The recurring uncertainty has some level of a planning tax. You're carrying the rest without getting the clarity.
I don't know if it will pass in 2027. Time will tell what's going to happen next in New York. I want to talk also about hopeful innovation, what could scale and what are some great things that are happening. Recycling refunds are having a moment. They're now ten US States with beverage container deposit laws, which has been happening for a while. There's a lot of concern about how these redemptions will happen. Meaning storefronts don't necessarily want to have a deposit returns scheme or store fronts like retailers don't necessarily want a reverse vending machine in their front of store because it can smell that.
It can cause rodents but also, it can bring homeless people there, which can be disruptive to other people trying to shop at the store. It's a challenge that can be overcome, but it's some of the narrative and pushback that we've seen. Also, shipping gear is a little too textile to recover. This is moving from hand sorting to real infrastructure. Companies like Reju are converting discarded polyester blend apparel back into new polyester.
They're building the processing infrastructure like conveyors, optical scanners to replace what has historically been manual hand sorting around the world. Why does this matter? Textile EPR is on the horizon as I've shared. California already passed it. A scalable end market for blended textiles is the difference between textile EPR funding genuine recovery versus funding expensive diversion. I don't want to say that it would be fake but it would end up being probably a lot of downcycling. Not the kind of reuse that the bill was anticipating or trying to generate.
Many retailers are reluctant to host reverse vending machines because they can create operational challenges, including odors, pests, and increased foot traffic that may disrupt the shopping experience.
The Maturation Of Real-Time Measurement Infrastructure
Hopefully, that expands. It's cool to see something working like that. Also, measurement infrastructure is arriving when the regulations are demanding it. 2026 brings the first widely tested frameworks and digital systems for real-time material accounting. Since they're based on sorting, that's increasingly enhanced by machine learning. The tooling to track material flow at scale is maturing. Why does this matter? There's talk of mass balance, chain of custody reporting, verified recycled content. All of it depends on measurement you can track.
That tooling is arriving at the same moment EPR programs start requiring it. That's an example of the system pulling this tech into the mainstream. We're going to go deep into mass balance in the near future so keep a look out for that. Step back and look at the plumbing of the hole. The programs are live and invoicing. CAA is now the pro everywhere, except for the one state that hasn't made this election. California is being sued, but from an environmental side, for being too soft. While Oregon is getting challenged from the industry side.
New York stalls for the third year. Underneath all of that, Murphs are reopening deposit systems, heat posting 70% return rates and the measurement tack is finally catching up to what is for. The pattern is that no new legislation plus active litigation on both sides doesn't make the system cleaner. It's making it noisier. This change is still very much in its forming stage. The companies that do well here are the ones reading the operational signals, the invoices, the return rate, the processing capacity. Rather than waiting for the legal legislative talk to lift because it won't lift soon.
What to prepare for next? California and Washington invoices are coming. New fee schedules are expected later in October 2026. The California litigation is the one to watch because it could change material classification. It's not just the timelines. Tips to embracing this consistent change. Don't confuse legal uncertainty with operational permission. A pending lawsuit is not a pause button. Read the invoice, not just the statute.
Start at these baseline data deadlines. Reporting gaps are where real money moves in 2026. Let the data pressure test your model. When a program behaves differently than you expected. A delay, a lawsuit of return rate or treated as a proof point to update your strategy is not a reason to freeze. The producers who treat new information as a reason to refine, not retreat are the ones who get to lead the next phase of the circular economy. We're in the muddy part now. I think I've said that before. I'll probably say it again. Once we're through it, and the next phase is where things are genuinely interesting, scalable solutions show up, and that's worth getting ready for. Thank you for being here.
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