As lawmakers debate plastic waste, ACC floats California takeout container fee

As California lawmakers move ahead on what would be the strictest limits in the U.S. on single-use packaging, one plastics industry group is endorsing a fee on takeout food packaging in the state to raise $100 million a year to fund recycling and litter cleanup projects.

The plastics division of the American Chemistry Council is floating a plan to lawmakers in Sacramento for a per-container fee on takeout foodservice packaging of all materials — not just plastics.

Endorsing a packaging fee is a policy change for the Washington-based group and comes as lawmakers in California will hold what are expected to be intense discussions on their legislation in coming weeks aimed at passing it.

On one level, ACC's position reflects increasing political pressure around plastic waste in the state.

But it's also a realization, ACC executives said, that more money will be needed to realize "ambitious" environmental goals ACC has set, like its 2018 plan to have 100 percent of plastics packaging recoverable or recyclable by 2030.

"We have suggested an advanced recycling fee for some of our packaging producers, those that are predominantly in the takeout foodservice packaging arena, that are traditionally held up as examples of marine debris and litter," said Tim Shestek, senior director of state affairs for ACC, in July 3 testimony at a California Senate hearing.

"We think that would be a significant contributor toward helping finance some of the necessary infrastructure improvements," he told lawmakers.

In a July 8 interview, Shestek and another ACC executive said the group is proposing a three-tenths of a penny fee per item on single-use foodservice packaging, paid somewhere along the manufacturing or distribution supply chain.

ACC projects it would raise nearly $100 million a year in the state to fund infrastructure around waste, including recycling, composting and litter abatement, said Keith Christman, managing director of plastics markets for the group.

The bill in California would require a state agency, CalRecycle, to set regulations to cut waste from single-use packaging and what it calls "priority single-use plastic products" by 75 percent by 2030.

It would also require single-use plastic packaging or other priority single-use products to meet progressively tougher recycling rates to be allowed to be sold in the state, potentially starting at 20 percent in 2024 and rising to 40 percent by 2028 and 75 percent by 2030.

The legislation seems to have some solid momentum. It passed both chambers by wide margins on first readings in the last two months and on July 8 finished its last policy hearing before a two-month legislative break.

During the recess, the bill's authors said they will hold detailed talks with industry, local governments and environmental groups to try to work through concerns.

"We're going to be working very hard over the next month or two to try to pull together a feasible plan," said Sen. Ben Allen, D-Santa Monica, and chair of the Senate Committee on Environmental Quality. "At the end of the day this is about getting a handle on our waste management crisis."

He said local governments in the state are facing tremendous pressure around plastic and packaging waste, spending nearly $500 million a year on litter cleanup alone.

On top of that, he said governments have higher waste management costs because they've lost export markets after China's National Sword decision to stop taking many types of plastic scrap, especially packaging with resin codes 3-7, and paper scrap.

"One of the reasons you have such passionate support for this bill from our cities and our local governments is they are really drowning in waste," Allen said.

In comments at the July 3 hearing, he said he wants the discussions over the next few weeks to produce a policy framework that can lead to both meaningful reductions in waste and that is economically sustainable.

"I would consider this whole effort to have been a failure if we don't craft something that other jurisdictions, other states, other nations, want to replicate," he said. "The only way we do that is if we do something that is both meaningful, in terms of real waste reduction, and economically feasible, because other jurisdictions are not going to do this if they see this as something that's going to harm their economies."

It's not clear what shape the legislation could take after the upcoming talks, but a stream of groups, including environmental organizations, local governments, waste haulers and the packaging industry, commented in favor and against the current version at recent hearings.

The Plastics Industry Association echoed ACC in supporting the goals of the legislation but called for more "structure and direction" before CalRecycle began writing detailed rules.

As well, a lobbyist for Ameripen, an association of packaging materials makers, processors and brand owners, said it hoped the dialogue would result in "significant amendments" and said it was putting forward its own proposal similar to the European Union's Packaging Directive.

ACC's Shestek told lawmakers that the group is "frankly a little nervous" that the bill would give CalRecycle too much power over the packaging industry, as it writes regulations. He urged flexibility in the rates and dates.

But Allen said it was important the state's plan ultimately gives CalRecycle "teeth."

ACC argued that setting recycling rate requirements only for some materials could have unintended consequences, if it pushes consumer product companies to use materials that are exempt from rate requirements but may have a higher environmental footprint.

Christman said, for example, pointed to studies that showed that steel coffee cans have four times the greenhouse gas footprint of the plastic film used to package bricks of coffee, even accounting for the 80 percent recycling rate for the steel container. That's why ACC's takeout packaging fee proposal covers all packaging materials, he said.

But Allen suggested that California government officials want to see more progress on the environmental footprint of plastic packaging. The bill said that only 9 percent of plastics are recycled, and that figure is falling in the wake of China's ban.

"We're not trying to be too prescriptive," he said. "We're trying to tell our agency CalRecycle to work very closely with industry, with cities, with waste management folks, and haulers, to figure out a strategy to reduce single-use plastic waste. That doesn't mean we're getting rid of single-use plastics."

Allen described it as wanting to "provide a little bit of a nudge so that the packaging that we do have will become more sustainable, more truly recyclable. I don't mean recyclable in a lab but recyclable and recycled in real life."

It's not clear how lawmakers will react to ACC's new takeout packaging fee proposal. Elsewhere, some are calling for higher fees around takeout packaging.

Starbucks, for example, started a trial last year in the United Kingdom to charge a 5-pence levy (about 6 cents) on all disposable paper coffee cups, and lawmakers there have floated a standard 25-pence (31-cent) fee on all single-use hot drink cups.

But Shestek said ACC sees its fee proposal as helping to bring sizable resources to improving recycling and waste collection.

"The ability to infuse some new resources into that infrastructure is going to be important," he said.

The group's takeout container fee plan is not limited to California. Christman said ACC is "actively proposing" it in other places, but he declined to say where.

"I'll keep that to myself at this point," he said. "We need to make sure the policymakers have had a chance to fully discuss that and consider it. I don't want to surprise them with that in the media."