Comment: Companies are prepared to pay to stop plastic waste. Here’s how it could be done successfully

Packages of plastic waste are seen at a recycling plant in Portugal. REUTERS/Rafael Marchante

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August 1 – Our world has a problem with plastic waste. According to a recent report from the Last Beach Cleanup and Beyond Plastics, the recycling rate for post-consumer plastic in the United States was just 5% to 6% in 2021, and about 85% of plastic ends up in landfills with 10% incinerated. We need a circular economy to tackle plastic waste, but in order to achieve this, the performance of waste management and recycling systems throughout the world needs to urgently improve.

The challenge is that in many cases, it currently costs more to collect, sort and recycle packaging than its value after use. So, key to achieving higher recycling rates for plastic waste is answering the question “who is responsible for managing plastic waste?” And, crucially, “who should pay?”

Extended producer responsibility (EPR) schemes for packaging transfer some or all of the responsibility of funding packaging waste management from the state to “producers”. In most cases, producers are consumer goods companies and retailers, who are required to play a role filling this financial gap. At The Consumer Goods Forum (CGF), we are working to deliver the solutions that the industry can provide.

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As part of this, 33 of the largest multinational companies from CGF’s Plastic Waste Coalition of Action have co-developed a core set of principles for the optimal design of EPR systems, which have demonstrated success in markets all around the world. A group of members’ companies are using these principles to enable their advocacy for well-designed EPR legislation.

Sustainably financed recycling, as well as incentivising brands to better design their packaging for recycling, will drive real progress towards a circular economy. EPR schemes for packaging rely on a system of fees that are assigned to packaging based on material type (eg plastic, paper, metal) and weight. Proceeds from these fees are used to provide ongoing, dedicated financing to improve recycling rates. As EPR programmes gain traction in markets around the world, we expect eco-modulation – the concept of penalising less eco-friendly materials while rewarding the use of greener ones – of EPR fees to feature prominently in future proposals, as an important mechanism for incentivising the design of sustainable packaging.

A woman works at a workshop manufacturing plastic woven materials for packaging products in Jiangsu province, China. REUTERS/Stringer

In early 2022, endorsing companies under the umbrella of our coalition, released an addendum to the first EPR publication, outlining our guiding principles for eco-modulation. The companies that endorsed this paper recognise the importance of clear and effective financial incentives that guide packaging design suitable for a circular plastics economy, such as encouraging elimination of unnecessary packaging, making packaging as light as possible and improving recyclability.

Globally, we are already seeing a patchwork of EPR schemes for packaging with varying approaches and success rates. In the U.S., a number of states have passed (Maine, Oregon and Colorado) or proposed (New York and Washington) EPR legislation. Meanwhile in the EU, the Packaging and Packaging Waste directive requires member states to set up a system for the return and/or collection and reuse or recovery, including recycling, of used packaging. Additionally, EPR is enforced for the Waste Electrical and Electronic Equipment directive (WEEE), batteries and end of life vehicles. The EU Commission plans to enforce better alignment of the implementation of EPR for packaging across member states, a necessary change to create greater harmony and accelerate a circular economy for packaging.

The alignment and design of EPR schemes is therefore critical to their success. The CGF recommendations call for EPR systems that have strong environmental outcomes; shared financial responsibility; long-term financial sustainability; social inclusiveness and fairness, especially in transitional markets with informal sector involvement. They should also be efficient, cost-effective, transparent and accountable; convenient for consumers; and allow producers to secure material for closed-loop recycling.

Key to effective EPR schemes is the guarantee that management responsibilities are proportionate with how the financial responsibilities are assigned. Therefore, when (as in many EPR schemes) producers bear the responsibility for achieving recycling targets, they should also have sufficient oversight of the scheme to ensure effective implementation. New EPR legislation in Colorado, based on the above CGF principles, is an example of well-designed EPR that should be used in other state and federal EPR discussions. Drawing on this as an example will help harmonise legislation across states and avoid the potential problem of very different and complex legislation that producers must comply with.

Zero oil bottles that are 100% biodegradable compostable and made from sugar cane era pictured on the production line at the Lyspackaging factory in Saintes, France. REUTERS/Regis Duvignau

In addition, an effective EPR scheme involves action from everyone, including the public and governments alongside industry. Consumer education must become a priority as we strengthen advocacy for EPR in the U.S, and globally. There is a limited opportunity to carve out EPR policy at the state and federal levels and get this right – and that opportunity is now.

We need to move towards a new lifecycle approach for plastic packaging, which would reduce the overall amount used, shift to use of recycled and low-carbon materials wherever possible, and design all packaging for reuse, recycling or composting. Crucially, there need to be systems in place to make this happen. We must ensure faster urgency of action across the industry and beyond if we are to see the progress we need, and the industry must collaborate with governments to help ensure systems are transparent and accountable.

The time is now to make meaningful progress in the design and implementation of effective EPR schemes. Steps have been made towards this, as our industry comes together with a solution mindset to help policymakers; and it is imperative that we continue to see EPR as part of the solution to the plastics problem.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Sustainable Business Review, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.

Ignacio Gavilan

Ignacio Gavilan is sustainability director for the Consumer Goods Forum. He leads the CGF sustainability steering committee and working groups on key issues such as deforestation-free commodities, food waste, refrigerant gases and plastics waste, and engages with multiple stakeholders to drive implementation forward.

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