The extended producer responsibility (“EPR”) programs for packaging that are currently unfolding in several states impose two primary obligations on producers of covered materials—reporting data and paying fees to a producer responsibility organization (“PRO”). This article presents an introduction on the various types of fees assessed against producers.
Producer fees fund the implementation of each state’s program. Implementation costs include administration, enforcement, public education, upgrading and operating waste management infrastructure (e.g., recycling collection and processing), and certain additional elements (e.g., California’s Plastic Pollution Mitigation Fund). While there are similar fee structures and guiding principles across states, there are also certain significant differences.
Circular Action Alliance (“CAA”), the approved PRO in California and Colorado and the only prospective PRO in Oregon, intends to harmonize fee assessments across states as much as possible in order to streamline producer compliance. CAA has repeatedly emphasized that because producer fees are supply-driven (i.e., fees are assessed based on the total amount of covered material sold in each state), the initial fee rates will change, potentially significantly, in the initial program years as CAA’s producer data becomes more comprehensive and accurate.
Even without a clear picture yet of what the exact fee numbers will be, the various state statutes, regulations, advisory meetings, and CAA input provide ample information from which producers can understand and begin to plan for their fee obligations. The sections below summarize the types of producer fees, CAA’s approach towards setting those fees, and important differences among the states.
Low-Volume Producer Fee in Oregon and Maine (and potentially Colorado)
Oregon’s statute specifically requires that producers generating between $5-$10 million in gross global revenue per fiscal year be charged a uniform annual fee (as opposed to the more complicated, multi-factor eco-modulated fees assessed for larger producers).[1] CAA will likely publish this uniform fee in mid-2025.
In Colorado’s advisory board meetings, CAA staff suggested they are considering applying a uniform annual fee for similarly sized low-volume producers in Colorado as well; however, this approach has not yet been confirmed.
Maine has developed a hybrid approach whereby low-volume producers are required to report only total covered material weight (rather than by each covered material category) and pay $500/ton, up to $7,500 per year.[2] Although not a uniform fee, the data reporting burden is reduced.
A uniform fee or hybrid approach removes considerable granularity from the data tracking and reporting a producer must undertake for the PRO, especially for the purposes of assessing base material category fees and eco-modulated fee adjustments, which would then not mandatorily apply to low-volume producers (in certain scenarios, those producers may still elect to apply for eco-modulated fee adjustments). However, for non-low-volume producers, fee assessment becomes more complex, as explained below.
Base Material Category Fees
CAA is working to develop a universal list of covered material categories. Some of these categories would not be applicable in certain states (e.g., Oregon’s paper product categories would not be relevant in California where paper publications are not covered materials), but from this list a producer will be able to categorize the total weights of specific covered materials they use each year.
This matters because CAA will set different fee rates for each base material category (typically in cents per pound). Multiple factors inform each base fee rate, including the cost to manage that material, infrastructure upgrades necessary to recycle that material, and its commodity value once recycled. Recyclable material categories will have lower fees than non-recyclable categories (in Maine, non-recyclable materials may be assessed two to five times the rate of recyclables).[3] Although base fees have not yet been finalized, CAA’s input into advisory meetings and publications thus far indicate the following relationship among broad categories of material base fees, from least expensive to most expensive: paper/fiber products, wood/organic materials, metals, glass/ceramics, rigid plastics, flexible plastics.[4]
The factors outlined above, and therefore the base fee rates, will differ among states but the structure is the same. Producers pay the base fee rate per unit weight of each covered material category they use each year.
Eco-Modulated Fee Adjustments
A producer’s base fees are then adjusted by eco-modulated factors designed to incentivize behaviors deemed beneficial for human health, the environment, or the circular economy. These adjustments either apply a credit or a malus fee according to attributes of how covered material is manufactured, designed, and used by a consumer.
The range and type of eco-modulated adjustments vary considerably from state to state, but certain criteria appear universally, including: credits for using post-consumer recycled content and source-reducing packaging, and maluses for using materials not accepted at recycling facilities or that disrupt the recycling of other materials. Other factors range from penalizing low source reduction compared to other producers using the same material to crediting labeling that improves consumer disposal practices.
Viewed across all states with EPR programs for packaging, the eco-modulated adjustments present a tapestry of bonuses and penalties. CAA is working to develop a “graduated fee algorithm” as a means of adding transparency to their fee assessments, which will provide producers with measurable criteria to understand how their fees may be adjusted. EPR Group has extensively analyzed the eco-modulated provisions in California, Colorado, Oregon, Maine, and Minnesota and can provide producers with the comprehensive understanding needed to optimize their packaging designs across the country.
California’s Plastic Pollution Mitigation Fund
In California, producers using plastic covered materials will be assessed an additional fee based on their market share of plastic covered material in the state. CAA will assess these fees to total $500 million per year through 2037, although they may collect up to $150 million from the manufacturers of virgin plastic resins, who may not necessarily qualify as “producers.”[5]
Retroactive Fees for Non-Compliance
Because producer fees need to cover total program costs, the greater the number of producers paying fees, the lower the fees for each producer on average. To address the free-rider problem, CAA intends to charge producers retroactive fees for any time spent out of compliance with the EPR programs.[6]
Producers will begin paying quarterly fees to CAA in July 2025 in Oregon, January 2026 in Colorado, and January 2027 in California. Maine and Minnesota have not yet finalized their timelines but anticipate collecting producer fees in mid-late 2026 in Maine and early 2029 in Minnesota.
CAA has indicated that at least in Oregon (but likely in other states as well under the same rationale) producer fees will be higher in the program’s initial years and then decrease once waste management systems have been upgraded. Generally, the cost to implement the programs is anticipated to be steeper up front to account for closing the recycling infrastructure and producer onboarding/enforcement gaps.
It is critical that producers understand and begin to plan for the various fees under the several EPR programs, especially as the eco-modulated adjustments contingent on their packaging decisions have the potential to significantly influence their total fees.
[1] Oregon Act at §459A.884(6).
[2] Maine proposed regulations at §10.B., available for download here.
[3] Maine proposed regulations at §10.A.2., available for download here.
[4] The first program plan of any state so far is CAA’s first draft Program Plan for Oregon. It contains preliminary base fee estimates, but CAA has repeatedly emphasized that those numbers are extremely preliminary and will almost certainly change once producer data reporting begins in March 2025.
[6] EPR Group will be providing an analysis of enforcement mechanisms in subsequent blogs.
