Proposed tax on single-use virgin plastic resurfaces in Congress

A proposal for a sweeping 20-cent-per-pound fee on virgin, single-use plastic is back in the U.S. Congress, reigniting a debate on a tax that the industry spent more than $1 million to block two years ago.

Sen. Sheldon Whitehouse, D-R.I., and Rep. Lloyd Doggett, D-Texas, reintroduced the bill Sept. 19, saying it would boost the use of recycled plastic, provide funds for recycling infrastructure and put the plastics industry more on the hook for the cost of pollution.

"A polluter fee would hold the biggest plastics companies accountable for the damage they've caused and increase the amount of plastic that actually gets recycled," Whitehouse said. "We are living with a flood of plastic pollution. Microplastics have reached the most remote parts of Antarctica, and they've been found in human blood and infant formula."

In 2021, Whitehouse used his seat on the Senate finance committee to get the same 20-cent tax plan on a short list of Democratic priorities for funding its $3.5 trillion Build Back Better initiative, but it was ultimately dropped from those plans.

At the time, the plastics industry spent over $1 million lobbying against it, when Democrats controlled both the House and Senate. With Republicans now controlling the House, the bill could face a more uphill climb.

The American Chemistry Council and its America's Plastics Makers subsidiary criticized the latest bill from Whitehouse and Doggett, who is a senior Democrat on the tax writing House Ways and Means Committee, as the wrong approach.

"America's plastic makers share Congress' concerns about the serious problem of mismanaged plastic waste but imposing a 20-cent-per-pound tax on virgin plastic materials would harm consumers, be a step backward in the fight against climate change and hinder U.S. efforts to rein in inflation," said Ross Eisenberg, president of APM. "When this tax was introduced in 2021, we said it was the wrong approach. It's still the wrong approach."

Eisenberg said the tax could incentivize companies to switch to alternative packaging that can have higher greenhouse gas footprints than plastic and he said it would harm U.S. manufacturing by favoring imported plastic products coming mainly from China, where environmental standards are lower.

But the bill's sponsors pushed back, distributing a fact sheet noting that the tax would also apply to imported virgin resins and single-use packaging.

They also said it would preserve U.S. global competitiveness by exempting U.S. plastic resin exports and exempt recycled resins.

"Because utilizing recycled plastic for new products is more costly than using virgin plastic, a fee on virgin plastic production would give the market a stronger incentive to use recycled plastics," according to a news release from Whitehouse, and make those products "more accessible and affordable to consumers."

At a June Senate hearing on plastics environmental issues, Whitehouse referenced the $1 million industry lobbying and advertising campaign against his plan in 2021 and said the tax would be directed at single-use items.

"The plastics industry was not very helpful in that regard and ran ads against my bill in Washington with images of things like child car seats and bicycle helmets," Whitehouse said. "I'm not really sure those are single-use items in real life."

The legislation would phase in the fee at 10 cents per pound in 2024, 15 cents in 2025 and 20 cents in 2026.

It would exempt medical products and packaging, personal hygiene, hazardous materials packaging and non-single-use products.

Companies could exempt their plastics if they certify to the Treasury Department that the resin will not be used in single-use applications. As well, companies with less than $25 million in gross receipts would be exempt.

The legislation would direct the money into a Plastic Waste Reduction Fund to pay for recycling infrastructure, marine debris monitoring and cleanup and to mitigate the environmental justice and community impacts from the production of plastics.

More than a dozen environmental groups endorsed the bill, known as the Rewarding Efforts to Decrease Unrecycled Contaminants in Ecosystems, or REDUCE, Act.

"Cheap, virgin plastics have become commonplace due to the support of decadeslong subsidies from the fossil fuel industry; it's no wonder that recycled plastics haven't stood a chance against this billion-dollar boost," said Anja Brandon, associate director of U.S. plastics policy at Ocean Conservancy.

But the plastics industry said the bill's authors should look to other solutions.

Eisenberg pointed to a five-point federal legislative framework that ACC proposed in 2021, which called on Congress to pass mandated recycled content for plastic packaging, extended producer responsibility laws and favorable rules for chemical recycling.

"We believe a national standard requiring all plastic packaging to include at least 30 percent recycled plastics within the decade is a much more feasible, market-driven approach to increasing recycling and reducing waste, without resorting to harmful taxes," he said.

ACC also urged Congress to support more limited bills like the Recycling and Composting Accountability Act and the Recycling Infrastructure and Accessibility Act, as well as an expected bipartisan bill from Whitehouse and Sen. Dan Sullivan, R-Alaska, the Save Our Seas 3.0 Act.

Besides Whitehouse and Doggett, the virgin plastic fee bill is co-sponsored by Sens. Ron Wyden, D-Ore., Chris Van Hollen, D-Md., and Robert Menendez, D-N.J., along with 26 House members.