It is becoming increasingly clear that for a majority of regulators in the packaging industry, the Extended Producer Responsibility (EPR) is the framework of choice to drive sustainability. However, there are numerous ways in which it can be implemented and as these EPR frameworks start to be written into legislation across the United States, it is becoming a complex landscape for businesses to navigate. 

‍

For e-commerce businesses this is particularly true as many items ship from overseas and are sourced from multiple manufacturers, in multiple countries. In this article we attempt to break down some of the key legislative initiatives and how they affect the e-commerce industry across the US.

‍

Firstly, What is Extended Producer Responsibility (EPR)?

Extended Producer Responsibility (EPR) is a policy approach that shifts the responsibility for managing the lifecycle of products—from design to disposal—onto ‘producers’, rather than governments. This means businesses are accountable for the collection, recycling, and disposal of the products and packaging they create. The goal of EPR is to reduce waste, encourage circular product design, and promote recycling by holding producers responsible for the environmental impacts of their goods.

‍

Packaging EPR policies are already being adopted in the United Kingdom (read about it here) and various countries across the European Union.

‍

Where does e-commerce sit in current packaging EPR legislation?

To date, there are seven U.S. states that have already passed packaging EPR laws (at time of writing - 1 November, 2024).

‍

States such as California, Colorado, Minnesota, and Oregon have explicitly addressed online and remote distributors in their EPR laws, defining these businesses as the ‘producers’. Maine’s EPR law, however, does not directly mention e-commerce or remote distribution.

‍

The complexity here lies in the responsibilities of the inner and outer packaging of products.

‍

Colorado, Minnesota, and Oregon split the responsibility for packaging waste between different producers, such that;

• Inner packaging: The company that produces or sells the product is responsible for the packaging that directly protects the item (think, coffee pouch).
• Outer packaging: The distributor or e-commerce company handling the shipment (such as Amazon) is responsible for the packaging used for shipping to consumers.

In California, e-commerce businesses (the ‘producer’ by law), must ensure that all packaging (including the inner packaging) is to comply with California’s plastic pollution reduction law.

Exemptions for small business

All states with EPR laws have exemptions for small businesses and artisan sellers (such as Etsy sellers), with thresholds varying by state;

• Oregon and Colorado exempt companies with less than $5 million in annual revenue or that sell under one metric ton of regulated products,
• California has a threshold of $1 million in revenue,
• Maine and Minnesota have thresholds ranging from $2 million to $5 million depending on various factors.

EPR Compliance

As with most EPR policies, e-commerce in packaging EPR raises concerns about free riders—businesses that use the recycling system without paying into it, especially those located outside the U.S. 

‍

States are taking this seriously, with enforcement mechanisms in place to ensure everyone pays their fair share. And with heavyweights like Amazon already onboard, the pressure is on to ensure full compliance. States like Oregon and Colorado have empowered their agencies to enforce EPR laws, meaning non-compliant companies could face penalties. In fact, Oregon can even retroactively charge companies for missed fees.

‍

These EPR laws so far draw inspiration from Canada and European countries that have long-standing EPR programs. For instance, Oregon’s law borrowed elements from British Columbia’s producer definitions and recycling systems, while also incorporating waste prevention strategies inspired by Austria, France, and Belgium.

What else is happening in the U.S. legal landscape?

New Jersey’s Department of Environmental Protection has opened its 2024 registration process for manufacturers under its recycled content law. This law, passed in 2022, mandates post-consumer recycled (PCR) content in products like rigid plastic containers, plastic bags, and trash bags.

‍

In California, Governor Gavin Newsom signed in several new laws recently, including;

• Plastic Bag Ban Update (SB 1053): Thicker plastic bags are now included in the ban.
• Food Waste (AB 660): Standardized quality and safety date labels on food products to reduce food waste.
• Carpet Recycling (AB 863): Introduced minimum recycled content requirements for carpets.
• Textile EPR (SB 707): Created a new extended producer responsibility (EPR) program for textiles.

Newsom also vetoed AB 457, which proposed reducing refund values for smaller wine and spirit containers, citing concerns that it would weaken recycling incentives.

What is the Accelerating a Circular Economy for Plastics and Recycling Innovation Act (2024)?

A bipartisan bill, The Accelerating a Circular Economy for Plastics and Recycling Innovation Act of 2024, has been introduced to enhance plastics recycling in the U.S. The bill, supported by the plastics industry, seeks to drive innovation, create national standards, and promote advanced recycling technologies. The American Chemistry Council (ACC) and EPS Industry Alliance have backed the bill, praising it as a critical step toward modernizing U.S. recycling infrastructure.

‍

Key Provisions of the Bill:

• 30% PCR Requirement: Plastic packaging must contain 30% post-consumer recycled (PCR) content by 2030, including chemically recycled materials.
• Lifecycle Analysis: The National Academy of Sciences will compare the environmental impact of plastics with alternative materials.
• National Standards: A 14-person advisory committee will create national plastic recycling standards focusing on harmonization, improved data collection, chain of custody and certified mass balance methodologies.

The bill positions advanced chemical recycling as a core solution, proposing it be regulated under manufacturing standards instead of waste management standards.

‍

Companies that fail to meet the PCR targets will face penalties, starting at 5 cents per pound of shortfall in 2030, increasing based on compliance levels in subsequent years.

‍

This bill, though still in early stages, reflects a growing effort to align industry and government towards circular economy goals, balancing innovation with regulatory certainty.

‍

How can Grounded help?

Grounded offers innovative, sustainable and future-proofed materials that align with emerging legislation trends, ensuring your packaging remains compliant and sustainable in the face of ever-evolving regulations.

‍

Grounded’s mission is to make sustainable packaging simple, accessible, and transparent. We aim to accelerate the transition to a circular economy by empowering businesses to use recycled and bio-based materials that can be recycled or composted at end-of-life.