What Is EPR?
Discover how Extended Producer Responsibility (EPR) is revolutionizing waste management and fostering a circular economy in this engaging discussion with Christine Yeager. She explains how EPR shifts the funding mechanism of recycling and waste management from local governments directly to the producers and brands responsible for packaging. Christine also sheds light on the essential work of producer responsibility organizations like the Circular Action Alliance in implementing and enforcing EPR laws. Tune in to understand why Christine emphasizes the importance of a strong recycling infrastructure and the necessity of a national perspective to tackle the challenges of localized recycling and improve nationwide recycling performance.
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What Is EPR?
Understanding Extended Producer Responsibility: Driving A Circular Economy
I want to dive into what is extended producer responsibility. I want to talk about this for a couple of reasons. One, we need to talk about these difficult or nuanced topics to help set some foundation so that when we talk to our guests in other episodes or talk about other topics, everybody understands the baseline. We have an episode on the circular economy in general and in this episode, I want to talk about extended producer responsibility or EPR.
Extended producer responsibility is a mechanism that governments can use to thrive the circular economy or to incentivize improvement on the circular economy in general. What is it? Why are we talking about it? First of all, extended producer responsibility or EPR is the concept of shifting the funding mechanism of recycling and waste management from local governments and municipalities onto the producers or the brands that make and sell that packaging.
Extended Producer Responsibility is a mechanism that governments can use to drive the circular economy or to incentivize Improvement on the circular economy in general.
In this case, paper and packaging is what I want to talk the most about. Now, EPR has existed for years in the US for paint, mattresses, batteries, and few other Industries and they've been successful. However, in 2021, it was the first extended producer responsibility legislation for paper and packaging. Oregon was the first to pass the Recycling Monitorization Act. Maine passed the stewardship packaging legislation also in 2021. EPR caught some wind in its sales. There's two more EPR laws passed in June of 2023 in Colorado and California.
In 2024, Minnesota passed an extended producer responsibility bill for paper and packaging. We'll see what happens in 2025, but it certainly growing. As I said, it’s catching wind in its sales. Oregon is the first legislation to have a deadline. March 31st is the first reporting deadline for the Oregon EPR legislation that in companies who sell paper or packaging that is thrown away in Oregon will have to report their pounds of material per covered material to circular action lands. I'll get into what that in a minute but basically what I'm saying is that this is happening now and they're very real deadlines happening and there is likely going to be more legislation.
Is Your Business Impacted? Who Really Pays For EPR?
Why does this matter? Why do you care about this? You may not, if you don't make or sell anything into Colorado, California, Oregon, Maine, or Minnesota, but EPR is here. If you do make any paper or any products that is contained to protected in paper or packaging or you use any material that is considered a covered material in your operations and it's thrown away in one of those states, then you may be affected.
Companies in general are making big commitments to increase recycling. They're doing this because consumers are interested in it. As you sow, put out 2024 plastic promise scorecard, which basically is what big companies are talking about reducing plastic usage or driving the circular economy and how are they doing against those commitments and goals. One hundred of the 225 company evaluated have a plastic production goal and 145 have goals to increase the use of recycled materials. There is a demand for this recycled material.
Those that are looking to buy recycled material to put back into packaging find that there's not enough. When you do the analysis and we did this analysis when I was working at Coke, there is a cap to how much there is available to be put back into products, especially food grade. There's not enough material to meet the demand. Insert extended producer responsibility. It appears to be the only proven way to rely increase recycling rates while also simultaneously increasing the quality of the material collected.
When you look at what recycled material there is available, a lot of it is coming from those states that have deposit return schemes because it forces this separation of the material, at least from a PET standpoint and aluminum because those are easily recyclable in the scheme of things. EPR expands that quality of material beyond bottles and cans and can create more responsible in markets for more materials which creates more availability of recycled material.
While only one EPR legislation passed in 2024, there were at least four other states who proposed legislation and almost up to fourteen different bills were submitted in 2024. There was even a senate hearing on EPR where the possibility for a national EPR was discussed. There's a lot of barriers to creating a national extended producer responsibility bill. Recycling is very localized. The challenges of recycling are very localized as well. Not to mention the political climate in general.
Recycling challenges are also very localized.
The Secret Sauce: How Producer Responsibility Organizations Drive EPR Success
If you are a potential producer, which I'll talk about who that might be in a minute. This is likely going to hit your business because most large companies sell in one of those states at least. What states have passed? We talked about it, California, Colorado, Oregon, Maine, and Minnesota. Once these legislations pass then what does that mean? In some cases, they have to go through and finalize the rules but one of the first steps is selecting a producer responsibility organization or a stewardship organization.
This makes almost the secret sauce of EPR, is this concept of a producer responsibility organization because it becomes this governing body for implementation and compliance of the legislation. It also protects the funding to stay within the confines of improving the infrastructure. That's what makes EPR successful. You see some of these states that have bottle bills that have passed. If you don't know what that is, that's basically maybe you pay $0.5 or $0.10 when you buy like bottles or cans and different single-use packaging and single serve packaging.
When you return it back, you get that $0.5 or $0.10 back. It's like a deposit on that package. This is something that's been around for decades in California, Oregon, New York, Michigan, and a couple other states. There's like ten more, I think. Those have largely capped out at their ability to increase recycling rates. In some states, if the consumer or person doesn't get back that deposit, then the government gets to use that money and it becomes a line item in the budget.
There's no longer this incentive to get more deposits back. They have this bucket of money that they've had for decades potentially, and they don't want that to go away from their budget. The producers’ responsibility organization is forced to refund and is incentivized to get as many fees as possible and to put those fees back into the infrastructure. They are responsible for building a program plan of how they're going to improve the recycling infrastructure and for finding producers, notifying them of their obligation and then getting them to comply and report their pounds, set fees, collect those fees and they distribute that funding back out in accordance to the program plan.
I said stewardship organization or producer responsibility organization. That language is used interchangeably in different legislation. Circular Action Alliance is the approved producer responsibility organization in Colorado, California, Oregon, and Minnesota. Maine hasn't made their selection yet, but having gotten these other states, the likelihood that CAA or Circular Action Alliance will be selected in Maine is pretty high. They also sit on the advisory board in Maryland where there is a study bill.
They recently shared their needs assessment out. There is an active legislation in Maryland that might pass in 2025 now that they've completed this needs assessment. I began working with Circular Action Alliance in Q3 of 2023 when it was very new. They’ve been selected in Colorado, but we were working to get it selected in California at the time. They didn't have any full-time employees because they weren't sure that CAA was going to be the pro, the producer responsibility York. Now, they've been selected. I was part of the team that did a lot of the foundational work of outreach to producers, setting up processes, drafting and sending out communications and outreach to producers then building their education like strategy and execution through webinars, emails, and website design.
Who's A Producer? Navigating The Nuances Of EPR Obligations
I spent a lot of time diving in and learning as much as I can about this process and what's required for producers to comply. Who is a producer? What does that mean? Who was ultimately impacted by EPR? Under each legislation, the definition is pretty nuanced. There's a lot of similarities and there's a few little things that make you may or may not be obligated in all of the states but in general, it is any company who sells a product that is protected or contained by paper or packaging. In Oregon, there's additional opportunity for people who sell and use paper more through circulars and things like that.
That might make you obligated also in Oregon, California, and I believe in Minnesota, the way I understand it thus far. If you do operations in one of those states and you use one of the covered materials in your operations and you throw it away in that state. Let's say, in your B2B operations. You may also be obligated. There are some exemptions if you sell. Largely, it's like federally regulated categories like infant formula, medications, or hazardous materials. A lot of those are exempted.
Also, if you are a small company. The definition of that is different in each of the states, but generally, it's around if you have global revenue of $5 million or less, or maybe sell less than one metric ton into the state of covered materials. There are some exceptions for small businesses, but beyond these exemptions, if you sell products or do operations in California, Colorado, Maine, Oregon, and Minnesota, then you are likely an obligated producer. Think everything that's on the shelf at Walmart like an REI.
All of these products that people buy and throw away and are contained in protected inside of a covered material, that which may or may not be considered recyclable. A lot of flexible plastics are covered but they're not considered recyclable. The ideas that then this funding mechanism that's now generated and managed and governed by the PRO begins to invest in the infrastructure to improve recycling and accordance with the program plan. There's milestones that they have to hit and have to increase the availability of access to recycling and then also the availability of materials that can be recycled appropriately.
The Future Of Recycling: EPR's Potential & What It Means For You
It's super exciting as a waste nerd. In Norway, and Sweden and some of the European countries, they've hit like 80% to 90% recycling rates. What’s the future of EPR? Will more states pass EPR? It’s hard to tell. It’s hard to have a crystal ball, but it does seem EPR has momentum in the US. As I said, it’s been successful in the EU at improving recycling rates. A sustainable packaging coalition has an active EPR tracker that you can go to and reference in any time a legislation is put on the docket in a state that is related to EPR. They track it.
Illinois, New York, Connecticut, Tennessee, Nebraska, Washington, Hawaii, Massachusetts, and Maryland all have active legislation as of 2025 proposed for this session. Now, only one EPR legislation passed in 2024, as I said and they had quite a few also in the docket. Many of these are repeat states that proposed it in 2024. Does that mean they're more likely to pass? Maybe. They've obviously adjusted the bill and maybe spent some time accommodating different points of view. I wouldn't be surprised if a handful of those or a few of those past in 2025, especially now we're starting to see deadlines.
Now, we'll start to see investment and the benefit come to light of EPR. That will, hopefully, continue the momentum. What does this mean for you? If you work for a company that has more than $5 million in annual gross revenue, you should look into whether or not you are obligated and generally if you manufacture something. If you're a service industry, you're likely not obligated but if you manufacture and sell products either online through like an Amazon or Walmart, or many other retailers, then you are likely obligated.
Finally, why embrace the change that will need to happen to make EPR successful? Why are we talking about this on the show? Why should we embrace this change? I talked a little bit about it earlier, but I just want to reiterate. Consumers understand the intrinsics sustainability value of products made from recycled materials. People understand recycling in general. They don't trust it but they conceptually understand what it means to recycle and to have a package made from recycled materials.
Consumers understand the intrinsic sustainability value of products made from recycled materials.
It's a lot easier for them to understand compared to like carbon sequestration or if I plant this tree, is it helping my carbon footprint? Carbon footprint is a much more complicated topic. Recycling has been ingrained in us. We were educated on it generally when we were younger. People can understand what it means. With that comes this value to the consumer for recycled material, which is opportunity for businesses. That's why so many companies have these plastic related commitments and are willing to buy more recycled material.
That's why this demand is there is because these consumers are interested in it. They're generally stickier, so if they believe that you're a credible business and you put that you've got recycled material in your package. They're likely to buy your product again. All of that is a business opportunity but then on top of that, if that's good and great for businesses. There's also obviously like significant general environmental benefit to EPR legislation. If you're like the bleeding heart and you're totally bought in and you get this already. EPR is like a very realistic solution to a very solvable problem.
EPR is a realistic solution to a solvable problem; there's a lot of material needlessly thrown into landfills each year.
There was a lot of material that is thrown away each year into landfills that doesn't have to be. It is already recyclable. There is already technology that exists to recycle it but the big challenge is generally an incentive or maybe a responsible in-market might be a problem or both of those things. The investment to create the responsible end market is too high of a cost of entry, even though if it was available, people would buy it.
That's where this EPR legislation comes in. It can both solve a business opportunity and create us a proven solution that addresses low-hanging fruit from a carbon footprint standpoint because the more material we use that's recycled, the less that shows up in landfills. Also, the less virgin material you need to draw on and therefore, less carbon footprint of the package itself.
This is a change worth embracing because it has the two legs of the stool. Maybe not of a great stool if it's only two legs. The point is, it has both of these aspects, business and environmental opportunity. That's why we're talking about it here because there are a lot of things that need to change in order for it to become a reality. It is happening. It is moving forward.
This is an exciting precipice of like we can see real dramatic shifts in recycling rates and this could be a very impactful tool that is implemented that could change the trajectory of our country's carbon emissions. Thank you for reading to this heavy topic and deep and technical topic, if you will. Hopefully, you better understand why these legislations are passing, what they are, and how they might impact your business.
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What happens when a plastics industry veteran embraces circularity and steps into the heart of extended producer responsibility? In our next episode, I talked with Jeff Inch about navigating change from the inside, leading sustainability teams, balancing costs and impact, and making the business case for EPR. We dig into the uncomfortable trade-offs, the systems that support compliance and why quick wins matter and driving lasting change. You don't want to miss this next episode.