Extended Producer Responsibility—How Will It Affect Your Business?

Extended Producer Responsibility—How Will It Affect Your Business?

The concept of extended producer responsibility (EPR) is as simple as it is demanding. EPR adherents call for product manufacturers to shoulder responsibility for all the environmental costs associated with the entire lifecycle of the products they make—from sourcing raw materials to final disposal of the product. The concept of EPR was first introduced in Sweden in 1990, by Professor Thomas Lindhqvist, in a report that emphasized the responsibility of businesses to manage “the take-back, recycling, and final disposal” of the goods they produce.

It’s no surprise that in the intervening decades, the concept has grown in popularity. According to the Environmental Protection Agency, more than 14.5 million tons of plastic packaging was created in 2018. Of that plastic packaging, nearly 70% ended up in a landfill, where it will take 400 to 500 years to degrade. And packaging is just one facet of a product’s environmental impact, because the creation and disposal of the product itself creates a trail of waste that is harmful to the planet.

For a long time, both consumers and producers were able to ignore this fact, but with landfills filling up with electronic and other waste, the public—and the officials they elect—have taken notice. And both groups are putting pressure on businesses to develop EPR strategies.

Shifting Environmental Costs Upstream

The current model of “reduce, reuse, recycle” is a well-established approach to plastic pollution. EPR extends this approach considerably, shifting the environmental costs of a product upstream to the manufacturer and away from the public sector.

Up until now, Americans have focused primarily on downstream solutions to plastic waste—including waste collection, pre-treatment, and sorting. But “reduce, reuse, and recycle” has severe limitations. Voluntary recycling programs, for example, are notoriously ineffective.

According to research by the environmental group Beyond Plastics, in 2021 less than 6% of recyclable plastic was actually recycled. This means that 34 million tons of plastic went to landfills. Another four million tons were incinerated, releasing a considerable amount of air pollution, despite the scrubbers, precipitators, and filters found in today’s waste-to-energy plants. In 2016, for example, the incineration of plastic in the U.S. released 6 million tons of carbon dioxide into the environment.

Downstream solutions have another major problem: Local governments complain that this approach leaves them responsible for waste created by businesses that aren’t even based in their jurisdiction. Put simply, cities and states, and their residents, are tired of bearing the disposal costs of many consumer products, especially those with a high percentage of plastic. It’s this attitude that has led to the growing popularity of extended producer responsibility.

Global EPR Trends

As with so many manufacturing trends, this one is impacting every country a little differently.

Europe is on the forefront of EPR innovation. In member countries of the European Union (EU), producers are responsible for financing the collection, recycling, and end-of-life disposal of consumer products like batteries, tires, oil, paper, vehicles, and even construction and demolition waste. The EU is also encouraging businesses to take responsibility for the disposal of plastics, medicines and medical waste, chemicals, pesticides, lamps, and light bulbs.

The EU is tackling waste on the front end as well. In 2021, the organization banned the sale of many common one-use plastics, including plastic cutlery, straws, plates, and bottle caps. Styrofoam food and beverage containers are also out. This affects not only European producers, but any business that exports to Europe. Some companies are now faced with redesigning packaging specifically for the European market.

Canada, too, is implementing a variety of EPR-inspired policies. Like the EU, it’s banning both the production and import of many single-use plastics. This includes checkout bags, straws and stir sticks, and takeout containers. The focus right now is on food-related single-use plastics, but exporters shouldn’t be complacent. Plastic products—and plastic packaging—are also being looked at for possible regulation. According to Plastics Recycling Update, there’s talk of prohibiting manufacturers from making recycling claims on any product unless “at least 80% of Canadians have access to systems that accept the products and provide reliable end markets for them.”

plastic waste
Nearly 70% of plastic packaging ends up in a landfill, where it will take 400 to 500 years to degrade.

Made in America: Extended Producer Responsibility in the U.S.

In the U.S., extended producer responsibility is handled less uniformly than in other countries. There is no federal legislation regulating EPR, but some states have been busy. In 2021 alone, more than 30 bills mandating extended producer responsibility were introduced at the state level, and EPR laws are already in place in several states.

California recently passed some of the most sweeping EPR legislation in the country. Senate Bill 54, signed into law on June 30, 2022, imposes new fees and regulations on manufacturers of single-use plastic packaging and single-use service ware. And the new law doesn’t just affect manufacturers. It also applies to the owner or licensee of the brand or trademark under which the product is sold in California. This all-encompassing definition means that if you sell any of these regulated products in California, you have to put an EPR program in place that meets the new state requirements.

The situation in California is not unique. Maine, Oregon, and Colorado have all passed stringent EPR laws, and the trend is growing. So far in 2022, 40 EPR-related bills have been proposed in 19 states, from New York to Hawaii. There are even two bills addressing producer responsibility under consideration at the federal level.

Corporate Stewardship: Complying with Extended Producer Responsibility Regulations

The EPR trend is gaining momentum. If your business hasn’t been impacted by producer responsibility laws yet, it will be soon. What does that mean?

Most likely, your company will be paying more to sell products in states with EPR laws, as the whole point of EPR is to compel manufacturers to share the financial costs of product recycling and disposal. In California, for example, the recently enacted single-use plastics law requires members of the plastics industry to contribute $5 billion over 10 years.

Fee structures will vary from state to state, but all states with EPR laws require some kind of payment. Most states also encourage (or even require) manufacturers to join a producer responsibility organization (PRO). The PRO is an entity that develops and runs a producer stewardship plan. PROs are required to be nonprofit organizations.

The advantage of joining a PRO is that it lets companies rely on a third party to manage the fiscal compliance relating to EPR. Most PROs also provide support with registration and reporting requirements and serve as a de facto voice for member businesses. So, while the state where you do business may not require your company to join a PRO, it may still be to your advantage to do so.

A Tool for Creating the Circular Economy?

Some business leaders have argued that PROs and other EPR requirements are in essence a stealth tax. But states and local governments have a ready response to that accusation: Make your products more sustainably, make them easier to reuse and less toxic to recycle, and then everyone’s costs will go down. In this way, government officials are pushing companies to deliver on their promises of a circular economy.

But whether a company’s leadership sees EPR as a tax or simply the cost of doing business, the phenomenon can’t be avoided. More than 30 states now have at least one EPR law on the books, and many have several. This is why now more than ever, designing products with sustainability in mind is essential to the bottom line.

Manufacturing Services for the Circular Economy

Are you looking for a manufacturing partner that can help you eliminate waste and pollution in your product’s lifecycle? At PRIDE Industries, our engineers are experts in streamlining product design for more sustainable manufacturing and end-of-life disposal. And our partner network of certified recyclers maximizes the recovery of useful material and ensures proper waste disposal.
wasted materials in landfill
In 2021 alone, more than 30 bills mandating extended producer responsibility were introduced at the state level, and EPR laws are already in place in several states.
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