As Colorado debates plastic ban, industry supports packaging tax

Colorado is joining the scrum of states trying to ban plastic bags and expanded polystyrene containers, but in a sign of how the politics are shifting, the plastics industry has a new comeback: Tax us instead.

As an alternative to a ban, the American Chemistry Council is supporting legislation in the state that would put a three-tenths of a penny fee on all foodservice ware, not just plastic, to fund recycling and composting programs.

It's not a completely new idea for the plastics industry. ACC first proposed a similar fee in California in 2019.

But as the plastics ban picks up steam in the Colorado Legislature, the industry is formally endorsing packaging fee legislation, which was introduced March 10 by a different group of lawmakers. It would create a state board that could raise fees up to 1 cent if recycling rate targets are not met.

At the March 11 hearing to debate the ban bill, supporters and opponents testified and lawmakers parleyed for nearly four hours before legislators on one statehouse committee voted 8-5 to move the ban forward to another committee.

"With this bill, we can take … two pieces of very important and very impactful plastic out of circulation, two unrecyclable types of plastic out of circulation, over time," said Rep. Alex Valdez, D-Denver, one of the sponsors of the ban bill. "We can't recycle our way out of this crisis."

But plastics industry representatives argued that the state can — and should — do much more to support recycling.

Omar Terrie, director of ACC's plastic foodservice packaging, told the hearing that ACC supports the fee legislation, SB-180, as a way to raise money to build recycling and composting systems.

"We support a lot of different ideas that would bring recycling infrastructure to Colorado by putting a fee on foodservice ware across the board; it would be material neutral," Terrie said.

"That would allow us to develop the recycling and the composting infrastructure that's needed in the state in order to get not only polystyrene foam, but alternatives to polystyrene foam, throughout the entire foodservice market, to be recyclable and to get that recycling rate up," he said, cautioning lawmakers to weigh the environmental impact of other materials.

All sides seem to agree that recycling must be improved.

Ban supporters pointed to a recent report from the Colorado Public Interest Research Group that said the state's recycling rate for all materials was 15.9 percent in 2019, down from 17.2 percent a year earlier. The group said that was well below the national recycling rate of 35 percent.

As well, figures from the Environmental Protection Agency show the recycling rate for polystyrene containers and packaging across the U.S. was only 3.6 percent in 2018, the most recent year statistics are available.

Ban supporters say they want to address pollution and human health costs from plastics production and what they say are market failures to build recycling systems for those products.

Rep. Emily Sirota, D-Denver, said lawmakers are "not taking on all plastics" but are focused on retail bags and EPS containers in restaurants because they're widely used.

"We've talked about how cheap plastic is, and that is why it is so widely used," Sirota said. "It is cheap because we socialize the costs of plastic. These costs are actually offloaded to communities."

One local environmental group told lawmakers it was skeptical of plastic industry claims of recyclability.

"The ACC has promised for years that they have technology that can recycle this material, but it's not shown a plan or a way to do it," said Jonathan Greenspan, with the Waste to Energy Citizen Action Network, in Telluride.

The industry-backed fee bill would create a new board within the state's Department of Public Health and Environment and give it power to issue revenue bonds and dole out the funds from the packaging fees.

The fee bill, which has its own hearing scheduled for March 22, would also require the state government to calculate recycling rates for foodservice packaging in Colorado.

The new board could raise fees up to 1 cent if recycling rates don't reach at least 50 percent by 2030 and 75 percent by 2035.

ACC's Terrie told lawmakers that EPS is being recycled elsewhere in the United States, pointing to a facility in Indiana, and he urged the state to give more support to market development for recycled materials.

Zachary Taylor, director of the American Recyclable Plastic Bag Alliance, said the industry's take-back programs to collect bags in stores can recycle them into plastic lumber, asphalt or new bags.

"Almost every life cycle assessment that has been conducted has found that plastic film bags, reusable carryout bags are the ones with the least environmental impacts compared to some of these other reusable bags, which have to be used many more times to offset their higher environmental impacts related to the emissions and energy used to produce them," he said.

The ban bill would also overturn a Colorado law currently on the books that prevents cities from passing their own local ordinances against plastic products, a policy called preemption.

But removing preemption drew strong opposition from the state's retailers and restaurants, who said it would raise their costs by forcing them to comply with different local ordinances. It led to questions from lawmakers in favor of the ban about what changes could be made to secure the support of those groups.

"The largest concern is the section that would allow local governments to regulate plastics in the manner that they see fit," said Nick Hoover, manager of government relations with the Colorado Restaurant Association.

Similarly, the Colorado Retail Council said the "hardest part" of the ban bill was overturning preemption. It said it would move from opposing the bill to neutral if the ban supporters dropped their attempt to get rid of preemption.

But several local government officials testified that they wanted lawmakers to stick with their plan to dump preemption, saying that current limits in state law "hamstrings" their ability to regulate plastics as they feel is needed.

Delanie Young, mayor of Telluride, said her community was the first in Colorado to ban plastic bags, and it uses fees charged for paper bags to distribute reusable bags. She said the town depends on a clean environment for tourism.

"The repeal of the preemption language … is crucial for all of us at the local level to truly take actions that will make significant change in our unique communities," she said.