Colorado's EPR bill could mean higher materials fees

Colorado's legislature, on May 11, became the third state in the country — and the first in 2022 — to pass producer responsibility legislation for packaging, including plastics.

Read the initial Plastics News report on the bill.

If signed into law by Democratic Gov. Jared Polis, the legislation would set up a system that would have companies pay much more to support recycling in the state.

And for plastics, it could mean significantly higher fees than for other packaging materials, according to estimates presented by supporters of the legislation.

The Association of Plastic Recyclers in a May 18 statement called producer responsibility legislation a "crucial policy tool" and urged Polis to sign the bill, after the state Senate voted 21-14 in favor of it May 11, clearing the last legislative hurdle.

"There is not enough plastics collected for recycling in the U.S. to meet the growing regulatory and corporate commitments to use more recycled plastics to make new products," APR said.

"Many plastic recyclers across the U.S. are not operating at full capacity and need more material to meet the demands for recycled resin," APR said. "This policy is greatly needed to increase the supply of recycled plastics to meet existing and future manufacturing needs."

While many details remain to be worked out, supporters called it a major step to try to improve the state's 15 percent recycling rate and build infrastructure to support collection and reuse of more glass, aluminum, paper and plastics packaging.

In a statement, the group Environment Colorado said it would require companies to provide more financial support for recycling programs.

"For too long, manufacturers of plastic have put the responsibility of dealing with plastics — recycling and disposal — on the shoulders of individuals and local communities," said Rex Wilmouth, senior program director. "Now, when manufacturers are held responsible for the plastics that can't be reused or recycled easily, they'll stop producing so much of it in the first place."

If signed by Polis, the bill would set up a roughly three-year timeline for implementation. It would require Colorado's Department of Public Health and Environment to designate a nonprofit organization to manage a statewide program, funded by annual dues paid by companies, by mid-2023.

It sets timelines for conducting a needs assessment and for the nonprofit to present a plan to the state and an advisory board by Feb. 1, 2025. The group would also develop a list of covered materials and set minimum recycling targets for 2030 and 2035.

Eco-Cycle, a recycling materials recovery facility in Boulder, Colo., said the legislation is backed by 65 local governments and large consumer brands including Nestle, Coca-Cola, PepsiCo, Danone, Unilever and Walmart. It predicted the bill would improve the state's recycling programs with "no additional costs to local governments or consumers."

Kate Bailey, Eco-Cycle's policy director, said the legislation can help deal with supply chain disruptions, climate change and plastic pollution.

"This policy will make it easy for all Coloradans to recycle more plastics, aluminum cans, glass bottles, cardboard, and printed paper," she said, in a statement. "It will also help manufacturers and businesses by creating a more resilient domestic supply of recycled materials to make new products."

Bailey, who championed the legislation, put out cost estimates that showed plastics materials could have much higher fees than other packaging.

She stressed they are not estimates specific to what Colorado may do — since detailed rules have yet to be written — but rather are based on figures collected from Canadian provinces that have been running EPR for packaging, in some cases for two decades.

The estimates showed that brand companies using PET bottles, for example, could pay fees of 13 cents per pound, compared with 3 cents per pound for aluminum cans.

With an estimated one pound of PET making 19 of the popular 20 ounce PET bottles, that works out to about 7/10ths of a penny per bottle.

Bailey estimated there are 30 aluminum cans per pound, which works out to about 1/10th of a penny per can.

"The material costs are based on the cost to recycle the materials and the market value," she said in an interview. "We know plastics are harder to sort [and] more expensive.

"The fees are also structured so that they are higher for materials that are less recyclable and lower for materials that are more recyclable, to kind of drive packaging design in that direction," Bailey said.

While costs can fluctuate in the EPR programs based on markets, the estimate said newspapers could pay fees of 4 cents per pound, glass bottles 6 cents and cardboard 10 cents.

Plastic bags and film could pay 22 cents a pound and companies using polystyrene could be 30 cents per pound.

"We reference something like polystyrene because it has very high costs [and] because it's very challenging to recycle," she said.

Fees would be collected from brand owner companies using the packaging or if that's not clear in some cases, to the packaging manufacturer.

One of its legislative sponsors, state Rep. Lisa Cutter, called it "game changing legislation" in a statement on Twitter.

But the American Forest and Paper Association urged Polis to veto it, saying it ignores the success of paper recycling and said it would shift costs of new recycling regulations from local governments to Coloradans, and said the state "should instead focus on addressing underfunded and undeveloped recycling programs."

It said more paper is recycled in the state by weight in municipal programs than aluminum, glass, steel and plastic combined.

Supporters of the legislation said Colorado's 15 percent recycling and composting rate is half the U.S. average.

The American Beverage Association, which represents non-alcoholic drinks makers, favors the legislation because it has a strong role for companies in operating the system and building a program that is "convenient to consumers that can achieve strong environmental outcomes."

"Colorado's legislation is a model for creating a circular economy for recyclables," said ABA CEO Katherine Lugar, in a May 12 joint statement with Eco-Cycle and other groups.

Legislators added an amendment to the bill in late debate May 10, giving them much more control and review of any recycling program that the nonprofit organization develops. The change was pushed by Republican Sen. Paul Lundeen, the minority whip in the Democratic-controlled chamber, and also required more transparency in how the nonprofit operates and sets caps on administrative costs.

Lundeen told his colleagues in a speech on the Senate floor that while parts of the bill made him "very uncomfortable," he said there's universal agreement that recycling must be improved but the debate is over how to do that.

He said the legislation would require the producer responsibility organization to develop several different scenarios and costs for boosting recycling, and he said that while legislative talks were at times contentious, he praised the bill's framework for trying to help the state get to a better place in its recycling programs.

Democratic Sen. Kevin Priola, one of the main authors of the bill, said like similar legislation in Canada, Colorado's EPR system could modify fees charged to companies based on recycled-content use or recycling rates of packaging, known as eco-modulation. He predicted the compromises worked out in Colorado's bill could be adopted by other states.

If the bill is signed by Polis, Colorado will join Maine and Oregon with extended producer responsibility laws for packaging. Other states, including New York, are actively considering their own EPR legislation this year.

Bailey said she believes Colorado's bill could become a model for other states.

In their joint statement, Eco-Cycle, ABA and the group Recycle Colorado said the state's plan is the first packaging EPR in the U.S. to create a "fully producer-funded and operated statewide recycling system for all consumer-facing packaging and printed paper."

The Maine law does not cover as many paper materials as Colorado, and the Oregon plan is only partly industry-funded, she said.

"We're hopeful that it's a model," Bailey said. "There's still room for improvement… but we're really proud to be able to come forward with a coalition of environmental advocates, with local government and with some brands and industry leaders, to say this is a workable solution for all of us."