July 3, 2024

By Gianna Kinsman, Capstone Energy Analyst

The Bottom Line:

We believe New York will pass its Extended Producer Responsibility (EPR) program for plastics and packaging in the next session, assigning producers more responsibility for product end-of-life management. EPR legislation poses compliance challenges for plastics, particularly single-use plastics, food service ware, and packaging while presenting opportunities for post-consumer recycled resins and expansion of recycling infrastructure.

• Capstone assigns a 65% probability that New York will pass extended producer responsibility (EPR) legislation in the next legislative session (2025-2026), joining California, Colorado, Maine, Oregon, and, most recently, Minnesota.
• These EPR programs broadly require plastics and/or packaging producers to fund recycling infrastructure and programs, typically through the formation of a producer organization. EPR programs may also set statewide goals or targets for recyclability, recycling rate, source reduction, post-consumer recycled content, etc.

*Capstone’s predictions are informed by rigorously examining historical occurrences and current conditions while rooting out cognitive biases systematically. We update our probabilities often to reflect the latest information. Read more here.

A DEEPER LOOK

Extended Producer Responsibility Legislation

New Legislation

• Minnesota: In May 2024, Governor Tim Walz signed the Packaging Waste and Cost Reduction Act into law, making Minnesota the fifth state to pass EPR legislation in the country. The bill, included in the Environment and Natural Resources Supplement Budget Omnibus bill, is intended to hold producers accountable for their packaging choices and incentivize recycling initiatives across the state. The program aims to establish a Producer Responsibility Organization (PRO) by January 1^st, 2025, consisting of Minnesota’s largest packaging producers. Members will be required to pay fees based on the type and volume of packaging they sell. Producers must redesign their packaging to be recyclable, reusable, or compostable by 2032 and meet waste reduction, reuse, recycling, and postconsumer recycled material targets set every five years. Because many of the details for the program are yet to be finalized, the public can still significantly shape the direction of the legislation by providing input during the consultation process.

Active Legislation and Legislation that Failed to Pass

• Hawaii: Under SB 2368, Hawaii’s Department of Health would be required to conduct a needs assessment to examine the “resources needed to reduce each respective county’s packaging waste.” The bill would not establish an EPR program but would seek to establish a better understanding of EPR needs and economic impact, as well as, via the required needs assessment report, consider whether the state should establish an EPR program to “address a broader waste stream than just packaging waste.” The bill did not pass in the 2024 legislative session.
  
• Illinois: While Illinois’ session is currently adjourned, the state legislature will continue to consider SB 3795 – which would establish a packaging EPR program – when the session resumes on November 15^th, 2024. The EPR program would include exemptions for certain industries and establish truth in labeling and truth in composting task forces, among other measures. It would also enshrine statewide recycling goals for plastic packaging to begin at 25% in 2028 and increase to 70% in 2050. Passage of the bill would build on a bill to study EPR programs that became law in 2023.
  
• Massachusetts: The state legislature in Massachusetts has considered multiple bills relating to EPR in 2024. HB 4263 would have focused specifically on EPR for packaging and paint with a needs assessment, reduction of toxic substances, and post-consumer recycled content mandates. That bill failed to advance out of committee. However, SB S570 – which would ban plastic bags and utensils – and H833 – which would require a commission to prepare a report on EPR for a variety of materials, including consumer packaging – have advanced through multiple committees but are running up against the legislative session end date of July 31, 2024.  

• New Hampshire: New Hampshire considered an EPR program under HB 1630, which would have legislated the creation of a PRO to oversee packaging reduction statewide and a recycling needs assessment. The bill would have reduction and recycling targets for each producer, culminating in at least 50% reduction 10 years after registering and at least 70% in recycling 12 years after registering. In February 2024, New Hampshire lawmakers voted to categorize the bill as “inexpedient to legislate” and recommended further study.
  
• New York:
  
  
  • Despite nearing the finish line, New York failed to pass an EPR bill in 2024. After passage in the state Senate on June 8^th, the Packaging Reduction and Recycling Infrastructure Act (PRRIA) failed to pass in the New York Assembly ahead of the end of the legislature’s formal session.The bill would have required companies to reduce their overall packaging use, enhance the recyclability of their products, reduce toxic substances in packaging, invest in recycling and reuse infrastructure, and provide funding for municipal recycling programs. If PRRIA passed, it would have been the most comprehensive Extended Producer Responsibility (EPR) legislation in the country.The bill called for covered producers to reduce their packaging weight by 10% within three years and 50% within 12 years. It would also require eligible producers to register with a Packaging Reduction Recycling Organization (PRRO) within 18 months of the bill’s enactment to create a plan for reducing toxic substances in packaging, increasing recyclability, and supporting waste reduction. Within two years of PRRIA’s passage, producers would need to eliminate certain “toxic substances” from packaging, including but not limited to ortho-phthalates, bisphenols, polyfluoroalkyl substances (PFAS), certain heavy metals, benzophenone, carbon black, polyvinyl chloride (PVC), polystyrene, and polycarbonate. Within two years, it would also require specific standards for postconsumer recycled material: glass (35%), paper carryout bags holding more than 8 lbs. (40%) and less than 8 lbs. (20%), and plastic trash bags (20%).While the bill gained last-minute momentum sufficient to pass the State Senate, in the Assembly, it drew strong opposition from state and national industry and trade organizations, which argued that the bill would threaten popular consumer products within the state. Much of the session was spent on stakeholder engagement, building consensus, and amending the legislation. For example, an initial draft of the bill had only exempted producers earning below $1M in net revenue, drawing the ire of industry groups who argued this was unusually stringent among EPR programs in the US.
  • Later drafts were amended to exempt producers earning below $5 million in annual net revenue and generating less than two tons of packaging waste each year. However, as the session neared its deadline, several cosponsors in the Assembly withdrew their names from the bill. While PRRIA failed to come to an Assembly vote before the deadline, State Senator Peter Harckham (D) vows to continue building broader support for the bill and push for its reintroduction in the next Senate session in January.
    
• New Jersey: S208 would require a PRO to set aggressive goals for post-consumer recycled content, mandate that single-use packaging products be recyclable or compostable by 2030, require all single-use plastic packaging be reduced by at least 25% by 2030. The bill has not advanced beyond its originating committee.
  
• North Carolina: North Carolina’s HB 279 would create an EPR program for packaging materials and would include a list of banned toxic substances in packaging materials and targets for recycled content reaching 90% 12 years post approval of the state’s EPR plan. The bill was proposed at the start of the current legislative session in 2023 and failed to advance out of Committee.
  
• Rhode Island: H7203 in Rhode Island would have established an EPR program for packaging materials with weight-based reduction goals requiring a reduction of up to 50% after 10 years, set off of a baseline established by a needs assessment. It would also require the elimination of toxic substances and set recycling targets. In April 2024, a state House committee held the bill and recommended it for further study.  
  
• Tennessee: SB 0573 would create a PRO plan and “requires the development of periodic needs assessments and plans to address recycling, requires the Department of Environment and Conservation to perform certain duties to assist in such purposes, and establishes penalties for violations.”  Additionally, the bill would requiring the creation of a list of chemicals of high concern in packaging, and outlaw those chemicals beginning in July 2028. The bill failed to pass in 2024.  
  
• Washington: Despite repeated efforts from state lawmakers, Washington again failed to pass an EPR bill in 2024. The bill is similar to Minnesota’s successful effort and would include EPR for packaging alongside common components of EPR programs, including truth in labeling, requirements for post-consumer recycled content reaching 50% in 2036, a list of restricted toxic additives to materials, and efforts to increase composting and reduce litter.

Regulatory Progress in Existing EPR Programs

• California: California passed EPR legislation for packaging and plastic foodware in 2022, and the California Department of Resource Recycling and Recovery (CalRecycle) remains engaged in the rulemaking process for EPR legislation. In part, the statute set a requirement for all single-use packaging and plastic food service ware to be recyclable or compostable by 2032, with a 65% actual recycling rate requirement by 2032 for plastic-covered materials. Producers with annual gross sales <$1M are exempt. The agency released draft regulations to the public at the end of December, formally publishing them for public comment from March 8^th to May 8^th.  CalRecycle is aiming to finalize EPR regulations by January 1, 2025.
  
• Colorado: Colorado passed EPR legislation in 2022 for packaging materials and paper products. The legislation excludes producers with revenue below $5M annually (adjusted for CPI). By statute, target recycling and collection rates, as well as post-consumer recycled (PCR) content requirements for 2030 and 2035, will be set as part of an approved PRO plan. A PRO plan proposal is due from the PRO on February 1, 2025. The Colorado Department of Public Health and Environment (CDPHE) is engaged in multiple rulemaking processes to implement the legislation into 2026.
  
• Maine: Maine passed EPR legislation for packaging materials in 2021. The law exempts packaging producers with below $5M in gross annual revenue for the first three years of the program, decreasing to $2M in gross annual revenue, or less than one ton of total packaging introduced into Maine annually (<15 tons for perishable food packaging). The statue specifies the Maine Department of Environmental Protection, as part of its rulemaking, will set program goals related to recycling rate and PCR content. The Maine Department of Environmental Protection began formal rulemaking in December 2023 and anticipates final adoption of rules by mid-2025 following legislative approval. The DEP is targeting the selection of a stewardship organization (equivalent to PRO) in 2026.
  
• Oregon: Oregon passed EPR legislation in 2021 covering all types of packaging as well as writing and printing paper and food service ware. The legislation excludes producers with revenue below $5M annually. The legislation sets a statewide recycling goal for plastic packaging and food ware of 70% by 2050. The Oregon Department of Environmental Quality (DEQ) has been promulgating a two-phase rulemaking over 2023 and 2024, targeting finalization by July 2025. In 2023, key rulemaking topics concerned lists of covered materials, compensation for local governments, and requirements for PRO fees and the PRO plan. In 2024, the second phase of rulemaking is focused on processing facilities, contamination reduction, and lifecycle assessment standards, with an anticipated draft rule submission to the Oregon Environmental Quality Commission this year. Oregon extended public comment on the draft rules until July 26, 2024. Most recently, the producer responsibility organization (PRO) submitted a Proposed PRO Plan, and the DEQ took public comment until May 31^st. DEQ now has a maximum of 120 days to approve the plan or require a revised submission.

What’s Next

We expect New York is likely to pass EPR legislation next session given the consensus-building and stakeholder engagement that occurred this session. We expect sustained interest in EPR at the state level, especially from progressive states, as a means to advance circular economy policies.

Unpacking Our Probability and Timing

The following factors support our 65% probability for passage in New York in the next legislative session (2025-2026):

• Gov. Kathy Hochul (D) strongly supports EPR legislation—in fact, she has twice proposed including EPR legislation in the state budget, although both times her efforts failed. In the meantime, however, we believe that stakeholders at the state level have been working toward building consensus on EPR over the past 2-3 years. Consensus-building is key to passage.
  
• Organizations such as the Natural Resources Defense Council, the New York League of Conservation Voters, and Beyond Plastics have pushed for EPR legislation, while organizations like the New York Farm Bureau, the Business Council of New York State, the Plastics Industry Association, the National Waste & Recycling Association, and American Chemistry Council opposed the 2024 bill. We believe an additional legislative session will afford EPR proponents key additional time to reconcile concerns with a subsequent bill, such as uncertainty around fee structures, the toxic substances restrictions, the chemical recycling exclusion, and the narrow list of types of exempt packaging.

Risks to Our Thesis

• Hochul could drop her support for EPR in a political compromise for another priority or change her view that EPR is not a worthwhile pursuit.
• Groups could fail to achieve consensus despite the additional time.

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