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Planning for Recovery Systems Change

There’s strong interest in implementing public policies for financing packaging end-of-life management, but are those proposals adequately addressing the real challenges?

Dan Felton
Dan Felton, Executive Directo, AMERIPEN

The closure of Chinese markets for global recyclables, known as the Chinese National Sword, in early 2018, exposed underlying weaknesses within our domestic recycling systems, and the resultant decrease in commodity values has further challenged our ability to respond effectively. Most municipalities went from breaking even through local taxes and the sale of commodities to now facing a deficit for the costs of collection and sortation of recyclables. As a result, a limited number of municipal recycling programs are either cutting curbside collection or reducing the types of materials collected to those with the greatest value.

According to The Recycling Partnership’s “2020 State of Curbside Recycling Report,” commodity prices on recyclables have declined an average of 41% over the past two and a half years. Initial studies suggest that nationally our communities are facing a $2 billion to $4 billion shortfall between the costs of collection and sortation and what taxpayers are being charged for these services. The report indicates the average fees on taxpayers for collection and sortation of curbside recyclables was $4.51 per household per month in  2019. If that was raised to $6 or $7 per household per month, it could inject upwards of an additional $1.5 billion into the recovery system to help close the loss of value in recyclable commodities.

Read related articles from Packaging World:

“Packaging Policy Update & 2020 Outlook” 

“Controversial Plastics Legislation Proposed” 

“Solutions for a Circular Plastics Economy”

“Fighting Back Against Anti-Plastics Legislation”  

But raising additional funds to cover the shortfall facing our local municipalities, without making systematic changes, will fail to address our underlying need—we need a recovery system that reflects the shifts in packaging in the 30 years since curbside recycling was first established. How might actual system upgrades be funded? The Recycling Partnership report notes that investments in infrastructure and education to maintain the current recycling system will cost an estimated $2.5 billion, or an additional $18.75 one-time-fee per household. These numbers do not include multi-material or flexible packaging formats, which are anticipated to grow. To include these will require additional investment into R&D for sortation, reprocessing, and end-market development.

Even with an improvement in commodity pricing to help close the gap for municipal curbside collection and sortation, these numbers still indicate a significant gap in financing to create the recovery system we need for the future of packaging. As a result, government interest in legislating extended producer responsibility (EPR) policies for packaging to help fund the financing gap is rapidly growing across the U.S.

Does EPR make sense for the U.S.?

The concept of EPR, also referred to as product stewardship, involves making producers responsible for some portion of the physical or financial costs associated with the end-of-life disposal of their products. Some argue that making producers financially responsible for the safe disposal of their products increases recycling rates and the design of more environmentally friendly products.

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