Are You Tracking Your Packaging Data Yet?

Extended Producer Responsibility (EPR) laws represent a pivotal shift in environmental and sustainability compliance, placing the onus of end-of-life product management on Producers, the parties that produce the products rather than on the municipalities that have to handle the discarded packaging materials. EPR laws are typically implemented to help states accomplish their recycling and climate goals by reducing packaging waste, supporting recycling and responsible disposal practices, and encouraging industry to evaluate and reduce its packaging and carbon footprint. The laws generally require manufacturers (and potentially brands, importers and distributors) of products wrapped in plastic packaging to report the amount of packaging (usually by weight) on an annual basis and pay fees that will be used for a variety of purposes, including enhancing the recycling infrastructure and reducing pollution.

EPR laws were first adopted in the European Union (EU), requiring country-specific laws to be completed by 2025, and the laws have continued to expand globally, including in the U.S., Canada, India, South Africa, Chile and Colombia, for example. In the U.S., EPR programs currently exist in California, Colorado, Maine, Maryland, Minnesota and Oregon. New Jersey and Washington have introduced EPR legislation on multiple occasions but have not yet enacted legislation.

This Holland & Knight alert provides a summary of existing U.S. EPR laws, noting that deadlines are beginning to apply to Producers under the state laws referenced above, requiring Producers to evaluate compliance obligations now. Understanding and navigating the complexities of EPR laws requires a thorough grasp of the specific requirements and deadlines in each state, as well as a product‑specific analysis of applicability. Producers should carefully assess their obligations under these laws, considering the benefits of joining a Producer Responsibility Organization (PRO) versus managing compliance on their own. The consequences for ignoring these state requirements could be significant – up to and including a ban on the sale of a Producer's products within that state.

In addition to basic compliance with reporting deadlines, many companies are using data collected to comply with EPR laws to 1) achieve environmental, social and governance (ESG) and sustainability goals, 2) mitigate greenwashing risks, 3) evaluate product inventories for durability, recyclability and minimal environmental impact, 4) align waste management processes with state-specific EPR laws and 5) enhance packaging's traceability, including developing appropriate contracting and data sharing with consumers and other supply chain actors. As environmental and sustainability standards continue to evolve, staying informed and proactive in compliance efforts is essential for all manufacturers (including importers) making or using plastics and other packaging materials in the distribution of their products to consumers.

Definition of "Producer"

Under EPR laws, a "Producer" is generally defined as any entity that manufactures, imports or sells goods or products using packaging made from a list of "covered materials" as discussed below. The definitions generally employ a tiered structure to determine which entity in the supply chain is responsible for compliance. Typically, any entity in the state that manufactures a product using covered packaging is the primary entity responsible for compliance. If the manufacturer is not in the state, the company that owns or licenses the brand or trademark under which the product is sold in the state is the primary entity responsible for compliance. If there is still no applicable party, responsibility typically falls to the person who sells or distributes the product in the state.

Some states deviate from the above tier structure or include requirements in addition to the above. In Colorado, for example, when goods are sold online, compliance obligations fall on both the entity that is otherwise responsible for the product packaging and on any person that places the product in additional packaging for shipping. Colorado also places the obligations on any person in the U.S. whose products are sold in the state, not just those physically present in the state, and, if no such person exists, on the importer of the product into the U.S.

In Oregon, responsibility is placed on the brand or trademark holder first and falls to the manufacturer only if the product is unlabeled (or if the manufacturer is also the brand or trademark holder). Oregon also places obligations on parties anywhere in the U.S. whose products are sold in the state.

Maine and Maryland place responsibility on the party that owns the brand or on importers – manufacturers are not implicated. Maryland also places responsibility on the entity that packages and ships a product using additional packaging. Stakeholders interested in submitting comments to shape the EPR implementation process should note that Maine's and Maryland's EPR programs are both awaiting additional regulatory action.

Definition of "Covered Material"

Covered materials typically include plastic used in the packaging containing a product for sale and may also include glass, ceramic, metal, paper, cartons, wood and other packaging materials. As noted above, some states also include any additional packaging used for shipment purposes. Some states also include paper products such as flyers, brochures or magazines, and others include food serviceware such as clamshell containers for takeout and utensils. All states with EPR laws include several exceptions to their definition of covered materials, generally including items used in the medical field, packaging regulated by federal law and refillable or reusable containers in addition to other state-specific exceptions.

Producer Responsibility Organizations (PROs)

The state laws envision PROs playing a crucial role in facilitating compliance with EPR laws. These organizations are typically nonprofit entities that manage the collection, recycling and disposal of products on behalf of Producers. PROs are the default compliance mechanism and can significantly streamline compliance for Producers. PROs must develop a stewardship implementation plan to ensure that the infrastructure required to meet the state's recycling goals is built out. PROs must also develop educational plans to educate citizens about the benefits of recycling and how to access local recycling resources. PROs collect a fee from their members to carry out stewardship plan implementation and also collect data from their members regarding plastics introduced into state commerce. Currently, the same entity has been selected as the PRO in California, Colorado and Maryland.

Compliance Without PRO Membership

Most states allow Producers to comply on their own with the EPR requirements without joining a PRO. Individual compliance involves setting up systems for product take-back, recycling and reporting to state authorities, which can be significantly more challenging and costly than PRO membership. Complying individually without joining a PRO may require pre-approval by the state oversight agency.

Deadlines for Joining a PRO

Each state has different deadlines for Producers to join a PRO or certify as to individual compliance. New entrants to the market after the initial deadlines generally must join a PRO or gain approval for an individual compliance plan prior to their first sale in the state. Most states have a separate compliance date for the prohibition on selling covered materials in the state without being part of a PRO or having an approved individual compliance plan. It is not yet clear how states intend to enforce sales of covered materials in between the deadline for joining a PRO and the deadline to cease selling covered materials without being a member of a PRO or having an approved individual plan.

• California: Jan. 1, 2024. However, no PRO was approved for participation by that date, and implementing regulations are still pending. On the basis of draft regulations being considered, Producers would not need to join a PRO until Jan. 1, 2027. One PRO that was approved in early 2024 set a July 1, 2024 deadline to join.
• Colorado: Oct. 1, 2024. However, the individual compliance plan deadline is not until Jan. 1, 2025.
• Maine: TBD. The deadline will be set by regulations which are still pending. Regulators do not expect to approve a PRO until 2026, meaning compliance likely will not be required until 2027.
• Maryland: TBD. An advisory council report on implementation is due by Dec. 1, 2024, and the rulemaking process will not begin until after that date.
• Minnesota: July 1, 2025.
• Oregon: July 1, 2025.

Conclusion

Given the varying deadlines, product‑specific analysis and potential penalties for noncompliance, it is critical that product manufacturers, brands, importers and distributors assess EPR applicability as soon as possible. Please reach out to the authors or any member of Holland & Knight's Emerging Contaminants and PFAS Team and Greenwashing Mitigation Team if you have any questions.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.