AMERIPEN, a material-neutral trade association for the packaging industry, is focused on the intersection of packaging policy and the environment. It also educates the industry on the value of packaging. In this Q&A, Packaging World speaks with AMERIPEN Program Manager Kyla Fisher and the association’s principal lobbyist, Andy Hackman, about current and future packaging policy trends as we head into 2020.
Over the last year, packaging has had a notably increased profile among both consumers and regulators. What’s changed since 2018?
A lot has changed. Packaging, which makes up the majority of household recycling, has been significantly impacted by shifts in global recycling markets. Toward the end of 2018, China closed its doors to much of the world’s recycling, which has sent the value of collected recyclables into a free fall. With a decrease in revenues, many municipal programs are struggling to make ends meet and are looking for ways to reduce economic losses.
At the same time, concerns around ocean plastics have raised questions from the public about the end-of-life management of plastics and packaging. Companies are making pledges to produce plastic packaging that is 100% recyclable, reusable, or compostable by 2025. This tension between a desire to recycle and a struggling recycling system is creating significant concerns.
Public policy follows public interest, so as the media and the public have become increasingly concerned about marine pollution and the viability of recycling, so follows legislative activity. AMERIPEN has never seen such intense legislative activity around packaging. We are currently tracking over 400 bills in more than 20 states, many of which have the potential to significantly disrupt the packaging value chain. The key issues we are seeing include material bans, source reduction mandates, Extended Producer Responsibility (EPR), and recycled-content mandate legislation.
States have generally led the charge on packaging policies, but what was unique in 2019 was that we also saw increasing activity at the federal level, with a significant number of federal bills introduced. The good news is that this increased interest is driving collaboration and engagement across the packaging value chain.
EPR for packaging has been a consistent theme over the last decade, but it seems to have risen in prominence in the past year, with both federal and state interest. Can you tell us more about how these proposals may play out?
Hackman: Yes, EPR legislation for packaging is or will be considered in at least California, Maine, Massachusetts, New York, and Vermont. A federal bill was also released last month that would make plastic producers responsible for collection and recycling of materials, put a moratorium on new plastic facilities, and require nationwide container deposits.
As global commodity prices for recycled material have significantly dropped, recycling programs that were designed to cover the costs of collection and processing predominately from the sale of recyclables are facing significant deficit. Add to that the cost of upgrading sorting facilities to help reduce contamination (which has risen 25% in the past decade), and we understand the desire to fund recycling. States are looking for ways to help municipal programs, and EPR—collecting money from the producers of materials that can be recycled—seems like an easy way to achieve that goal. But it’s more complicated than that.
Fisher: We often talk about the fact that recycling is a system, but when it comes to financing, we don’t explore the interplay of that system on driving change. AMERIPEN hosted a stakeholder meeting on financing earlier this year where we gathered states, non-profits, academics, and industry together to explore financing needs. The challenge we continue to hear from these collaborative processes is that, depending on where you sit in the packaging value chain, financing needs differ, and sometimes it’s more than just financing they need.
The Carton Council released a report in 2018 that explored funding mechanisms for recycling and the role of various stakeholders in that system. They identified that there is no single mechanism that will address all the needs of the full recycling system—rather a portfolio approach is needed. To achieve this portfolio approach, different stakeholders across the value chain—from taxpayers to states to corporations—all have different roles, and each has unique strengths they can bring. This includes financing, but also in-kind support and policy tools.
When we break down the system based upon needs and who and what can best achieve those goals, we have a more defined model on where we can enact change and how to best mobilize resources. AMERIPEN has launched a working group that is exploring this.
Hackman: If we are looking at a bill for EPR, it’s important that we understand that a simple new source of funds will not solve all the challenges facing packaging, nor can it alone meet all recycling goals. Rather, we may be more effective if we break down our specific goals and needs and then identify the most effective mechanisms (both financing and policy) to meet them. Tax incentives, for example, might help increase innovation more effectively than grants, or funding may be better directed toward education than covering the costs of collection. At this point, we don’t really know what works best because there are no public studies to address financing in this manner. No business is created without a business model, so why are we doing that with calls for packaging makers to finance recycling?
So if we are looking at a systems approach to address the challenges with packaging recycling, what other financing models should we consider?
Fisher: Considering that waste management is local in the U.S., which is a unique framework not replicated in many other countries, this poses unique challenges in ensuring consistent and best practices across jurisdictions. Looking at ways we can incorporate both financial injections alongside effective policies to drive the best value is needed. Financing and policy can be complementary.
AMERIPEN’s 100 Cities Packaging Recovery research report evaluated best practices across the U.S. and helped drive industry support for efforts like more recycling carts. Many of those best practices are still valid today. Our Financial Platforms study back in 2013 also identified policy mechanisms, like pay as you throw (PAYT) and universal access to recycling, as effective tools to increase recovery rates in a cost-effective manner.
Producers have been stepping up to fund infrastructure voluntarily through exciting ventures like The Recycling Partnership and the Closed Loop Fund; both organizations are providing much needed infrastructure as well as best practices and are now beginning to incorporate policy shifts to support their efforts. There are important lessons to learn here, and we need to take the time to evaluate how these models can be further developed.
Hackman: In state legislative proposals, we are seeing a desire to tackle everything from ocean debris to recycling innovation to reducing toxic chemicals, but we lack focus on how best to achieve that. To Kyla’s point, if we can work collaboratively to build a business model for domestic recycling, then we can match resources, financing, and policy goals to best match system needs. In doing so, we can effectively measure our progress as well.
With all the bans on plastics, do you see this trickling further into packaging, and what are the implications should this happen?
Hackman: What started out as plastic bag bans has grown into bans on straws, bottles, and now single-use packaging—both paper and plastic. This concept of single-use packaging presupposes that packaging is waste and therefore does not offer value. This is problematic as it ignores the fact that packaging plays an essential role in protecting food and products as well as human health; our current economic system truly does rely on packaging working as designed.
Fisher: In 2018, AMERIPEN released a study to quantify the value of packaging in reducing food waste. Surprisingly, what we found was the countries with the least amount of consumer food waste also had the greatest amount of packaging. We then further surveyed stakeholders to explore what they wanted to see in packaging to reduce food waste. Consumers overwhelmingly expressed a desire for smaller-sized packaging, even if it meant more to dispose of at the end of its life.
ReFED, the leading non-profit tackling food waste, has identified packaging as one the top three strategies to address the issue, and the Oregon Department of Environmental Quality has noted that prevention of food waste saves seven-times more greenhouse gas emissions than anerobic digestion, six-times more than composting, and three-times more than redistribution. Packaging has an important role in preventing food from being wasted in the first place. If we assume that packaging is waste and ignore the value it plays, we risk creating unintended consequences.
Hackman: This becomes important in a policy environment because we need to look at the interplay of policy with other goals. We have a federal objective to reduce food waste by 50% in the U.S. and yet at the same time we have states looking to ban or penalize companies that come up with packaging that may reduce food waste but increase material demand.
Another concern is climate change. We’re feeling tremendous global pressure to reduce emissions, and yet certain policies to ban or stipulate materials may increase the use of more resource-intensive materials.
If our goal is the reduction of environmental impact then we need to look at solutions that address the full lifecycle of our materials, not just at the end of their productive life. Project Drawdown, a climate change non-profit, has created a list of the most effective actions to reduce greenhouse gases: Reducing food waste is number three, household recycling is number 55, and composting is number 60. Our focus only on end of life, while important, is overlooking the larger environmental perspective.
When setting packaging policy, we tend to isolate packaging from the value chain and only think about its disposal. Yet there are ways to impact change across the value chain. Innovation support, raw material management through programs like forest certification, harmonized practices around collection, and education are just a few ways we can inject policy decisions into a lifecycle perspective. We could create increased value by practicing integrated policy—examining how we can enact changes that reduce marine debris, ocean plastics, and environmental impacts altogether. Solving for one problem rather than the system may create unintended consequences.
The Ellen MacArthur Foundation’s New Plastics Economy Global Commitment has driven pledges by many companies for 100% recyclable, reusable, and compostable packaging. How realistic are these goals, and what role does policy play in helping realize this vision?
Fisher: There are areas where I think we need to be cautious. We’ve already mentioned food waste and the significant role packaging, particularly plastic packaging, can play in reducing impacts.
Another area we’ve been exploring, and one that is of increasing focus for us at AMERIPEN, is e-commerce. We’ve done significant research into the trends with packaging design for e-commerce that shows that multi-material and flexible packaging formats are highly effective for the increased movement inherent in e-commerce distribution chains. When you add new modes of transport like drones, the need to produce lightweight, flexible formats will only increase.
In the absence of any significant disruptors, our research suggests we should continue to see an increase in materials that are not captured in the current curbside system. So let’s be proactive and start planning for this now as we look to revitalize the U.S. recycling system.
Hackman: These are voluntary corporate commitments and, in the U.S., do not impact legislation per se, but we believe there are ways policy could support these corporate commitments. We need to support innovation to help create end markets to recycle these new materials. Policies that support chemical and mechanical recycling or even simply support changes to how we collect and sort material will be needed if e-commerce continues to shift our material mix. Very few of today’s policies address these needs.
It has frequently been argued that in order to increase recycling commodity pricing, we need more demand. Are recycled-content mandates the solution?
Hackman: We’re seeing interest in recycled-content mandates right now, and we expect that trend to continue. The question will be if markets really will expand in response to corporate commitments and any policy goals that are mandated. There could very well be a shortage and supply issues that cause intense problems if flexibility is not provided in policy mandates.
Fisher: While it’s positive to move more material and create an economic incentive for reuse, there are a few issues that challenge the efficient use of mandates. One is that there is more demand than there is quality material. We also lack access to recycling, and as more municipalities cut programs or collection of certain materials, access will become even more restricted. Lastly, we need to understand where recycled content drives environmental value and where it doesn’t. Fiber, for example, has a hierarchy. The use of recycled content in fine papers results in significantly more energy and chemical use than using virgin. In contrast, recycled content in paperboard or corrugated reduces energy use versus virgin fibers. Mandates in and of themselves can’t resolve these challenges.
Hackman: Policies that might be more effective in increasing the value of recyclables include support for innovation, both in terms of recycling infrastructure to help better sort and improve the quality of collected materials and in terms of creating multiple end markets for those materials once processed. Policies to help educate and reduce consumer confusion over recycling can help reduce system costs and contamination—again driving better quality material.
One area AMERIPEN has always been involved with and will be doing more work on this year is supporting state recycling market development initiatives. Recycling market development is a strategic approach by state agencies to improve the vitality of the recycling industry. They tend to look at ways to increase the collection of material, increase demand for that material, and create efficiencies and opportunities in the process. Support for recycling market development decreased as we moved more material to China. But in today’s environment where we are seeking to revitalize the domestic process, this work is vital, and we’re proud to be leading industry and government collaboration to support this.
What’s in store for 2020 packaging policy?
Hackman: System financing and material bans will be the main areas of focus. We’ll also see some attention on recycled-content mandates and source reduction. Lastly, we expect more interest in the development of recycling market agencies and standardizing recycling programs.
Fisher: While Andy works on 2020 policy needs, our research will continue to delve into future needs of the packaging system. We offer value when we can anticipate and help design proactive policies and strategies in an attempt solve future challenges before they become a concern.