At a Glance
- Extended Producer Responsibility (EPR) is an environmental policy enacted by several states, which extends a manufacturer’s responsibility for its product packaging materials to the end of the product’s life cycle.
- While there is no cost to register with Circular Action Alliance for now, companies should be prepared for costs associated with EPR reporting and the fees assessed based on quantity of covered materials.
What is Extended Producer Responsibility (EPR)?
Extended Producer Responsibility (EPR) is an environmental policy enacted by several states, which extends a manufacturer’s responsibility for its product packaging materials to the end of the product’s life cycle. EPR shifts the costs of material management from consumers to the producers of packaged goods by charging fees based on the quantity of materials sold or distributed in a particular state. EPR laws also commonly include recycled content targets and recycling rate goals. When effectively implemented, EPR encourages circular economies, but it also drives costs for manufacturers.
The following states have enacted EPR laws: California, Colorado, Maine, Maryland, Minnesota and Oregon. Several other states, including Hawaii, Illinois, Massachusetts, New Hampshire, New York, New Jersey, North Carolina, Rhode Island, Tennessee and Washington recently have proposed EPR laws. EPR is also in effect in several Canadian provinces.
How will EPR laws impact businesses?
Typically, state EPR laws require producers (i.e., companies that manufacture, import, or distribute) packaged goods (covered materials) to register with a Producer Responsibility Organization (PRO), report quantities of packaging materials sold in the state, and pay fees based on the quantity and type of materials sold. By increasing packaging management costs for producers, EPR laws incentivize packaging design changes that minimize environmental impact.
What are Producer Responsibility Organizations (PRO)?
Producer Responsibility Organizations1 are nonprofit organizations that aid in the implementation, administration and management of EPR laws. For example, the fees that producers pay based on the quantity and type of materials sold in the state may be submitted by the state PRO to fund state recycling and waste management programs.
The Circular Action Alliance (CAA) is a PRO that has already been approved to execute EPR programs in Colorado, California and Maryland, and the only PRO to submit a program plan in Oregon. Other states may follow suit and designate CAA (or an alternate PRO) or may simply require producers to directly register with the state.
What should businesses do to prepare for EPR implementation?
Companies first need to assess whether they are a regulated “producer” selling “covered materials” in a jurisdiction with EPR legislation. If so, the company will need to register with the PRO for that jurisdiction and begin tracking the quantity and types of material sold into the jurisdiction. Notably, the definitions of “producer” and “covered material” vary state by state. Companies that produce packaged goods need to carefully assess and manage their compliance obligations in different states. CAA has indicated that they may provide some guidance as to whether a company qualifies as a covered producer, but companies should consult with their own legal and regulatory experts to confirm compliance obligations in each state.
Any company that expects to be considered a covered producer under California, Colorado and/or Oregon’s paper and packaging EPR laws must register with CAA by July 1, 2024. This can be accomplished by submitting a relatively simple form on CAA’s website.
While there is no cost to register with CAA for now, companies should be prepared for costs associated with EPR reporting and the fees assessed based on quantity of covered materials. The regulatory burden of EPR programs includes data gathering, formatting and management; fees based on reported materials and quantities; and costs of monitoring and analyzing dynamic regulations and guidance.
FOOTNOTES
- In Maine, producers will join a Stewardship Organization, which is essentially a PRO by a different name.
