The first packaging data reporting deadline for extended producer responsibility programs doesn’t come until 2025, which seems far in the future, but compliance experts are warning that companies should start the massive undertaking now.
Michael Washburn, a consultant on sustainability and public affairs for Washburn Consulting, said from what he’s experienced, “I don’t think anyone is constantly ringing the bell and saying you should be starting these processes now if you haven’t already.”
But with hundreds of data points needed for each packaging component, data collection is not a process that can be rushed. Companies that want to be comfortably in compliance should already be looking at their packaging.
Andriana Kontovrakis, director of compliance services for North America at Reverse Logistics Group (RLG), added that she’s found more producers are willing to take action now when the coming data reporting is linked with the budget process – another undertaking that needs to begin well in advance – but there will always be those who start late.
“It’s kind of like when you get an assigned paper in college due in a month,” she said. “There’s the ones that go out and do the research right away, the ones that start in two weeks, and the people who do it the night before. It all works out in the end, but there’s different stress levels.”
Michelle Carvell, director and chief operating officer of EPR compliance company Lorax EPI, said the biggest challenge in the U.S. is that “nobody knows exactly what they’re going to have to report yet,” but companies still need to start working on data gathering.
Many producers are feeling the pressure, but Molly Blessing, director of sustainability for the Household and Commercial Products Association (HCPA), agreed that there’s a lot of uncertainty as well, as only one state so far – Colorado – has selected a producer responsibility organization (PRO). Maine, California and Oregon, the other states with packaging EPR programs, are also all at varying stages of rulemaking.
“It can be difficult, but ultimately there are resources out there that can help.” –Andriana Kontovrakis, director of compliance services for North America at Reverse Logistics Group (RLG)
“Until rulemaking gets finalized in all the states, they won’t know what those factors are, but they will also need to be in a position to provide that data shortly after the rules are finalized,” she said.
The biggest problem is that many companies see the 2025 report deadline and feel there’s plenty of time, Washburn and Carvell said.
Washburn said he’s talked to “literally dozens of producers and a handful of trade associations, and I think when they look at the deadlines for the formation of the PRO and start to think about when they are going to have to register and report, they feel like it’s a ways off.”
Carvell said now is the time to be gathering, at the very least, “early warning data” so producers can tell if they are obligated under the laws and to what extent.
“Right now the problem is twofold,” she said. “There are a lot of businesses that are stalling the problem for sure, who aren’t looking at it and who are saying, ‘It’s not ready, we don’t need to.'”
However, even businesses that have invested time, money and effort – more than likely global businesses – have some “uncertainty about the how,” she added, which could also complicate reporting deadlines.
“The larger companies – the big multinational brands – the awareness is higher, but I wouldn’t say I’ve talked to any companies yet that would say they feel they are ready.” –Michael Washburn, consultant on sustainability and public affairs for Washburn Consulting
“The categories we saw from California were difficult,” Carvell said. “They don’t represent anything we see anywhere else around the world. Nobody expected the U.S. to do the same as France, but we have to be careful that new markets and states don’t just go, ‘Well I’ll create the most complicated market in the world because I can.'”
Carvell said even though billion-dollar companies will likely have some knowledge of EPR, either from working in other markets or simply due to their size and expertise, she’s “hugely concerned about U.S.-only businesses” that have not had to comply with other countries’ EPR laws before and are not familiar with the level of work that is required.
Kontovrakis added that even global companies that may have had EPR experience in other places are sometimes siloed, meaning the teams that handle compliance and reporting in one market might not share information or experience with the teams that deal with other markets.
Unaware companies will make up the majority of businesses that need to report, Carvell said, though not by volume of packaging sold into the market. There needs to be a better “early warning system” in place now, Carvell said, to try to cut down on the number of businesses that are not ready when the deadline hits.
Another complication, Washburn added, is the question of who in a company is responsible for EPR compliance and reporting. Some companies are creating new roles, he said, but that also requires time and capital.
“The larger companies – the big multinational brands – the awareness is higher, but I wouldn’t say I’ve talked to any companies yet that would say they feel they are ready,” he added.
For smaller companies with fewer resources, “they are going to need considerable outside help and possibly more time, so it’s even more urgent in my mind for them,” Washburn added.
Smaller and mid-size companies also usually have a smaller packaging portfolio that may be more targeted to specific materials, and therefore have less flexibility to make changes rapidly for eco-modulation factors, Blessing added.
“When you’re a smaller company, you’re less able to spread out changes across your portfolio, especially if you have one or two flagship products,” she said.
The number of companies who will need to register and report is also vast, Washburn said. He estimated that in California alone, between 7,000 and 10,000 companies will be considered obligated producers.
“At some point, the regulators will start notifying companies [they are not in compliance], so this is not going to be a single moment,” he said. “It is going to play out over years.”
Kontovrakis said in her experience, the first two years after a law goes into effect have a steep learning curve, but with the states staggered, those learning curves will overlap in some ways and differ in others, creating a complicated situation.
“Each state is different,” she said. “Everyone wants to make their own mark on what they think is important for the community or environment and I think there might be constant new learnings about what producers need to account for in their packaging.”
Complex data requirements
The amount – and detail – of the required data will be immense. While many of the specifics are still unknown, based on other EPR programs around the world and what is already set in statute, producers will likely need to report not just formats, materials and weight by component, but certified recycled content and proof of source reduction over time, Carvell said.
Washburn said for multilayer and multimaterial formats, packaging “that has a closure and label and safety seal, they’re going to need to track all of that.”
“It’s hard enough if companies make their own packaging, but many don’t, so you need to collect data that’s reliable from possibly hundreds, if not more, suppliers and that is a time-consuming endeavor,” he said. “There’s challenges around the accessibility of the data in the first place and veracity in the second and I think people need to factor in time.”
Although companies could just estimate weight based on accepted industry averages, Washburn warned that could get expensive quickly.
“Getting your data precise and being in command of those data and being able to track changes over time is a worthwhile investment, because every extra ounce translates into a part of a ton and they’re going to pay for every extra ton,” he said.
The first step, Kontovrakis said, is to read the laws and regulations and figure out who is an obligated producer. Some companies with diverse product portfolios might be obligated under the laws for some of their product packaging, but not all, she said, as there are various exemptions for pharmaceuticals, amount of packaging used, revenue thresholds and other factors.
Once companies know what they need to report on, they can turn to collecting the data. Carvell said a good place to start is by collecting information on “every single thing you possibly could.”
“There’s a huge list of things they need to start thinking about for that – how you will capture it, how you could retrieve it on a regular basis and match it through to your sales,” she said. “Easily said, hard to do.”
Carvell said Lorax EPI provides an aggregating software system to make the process easier, because there can be hundreds of data points needed for each piece of packaging, depending on each EPR law.
“You can’t say, ‘I used 5 tons of paper,'” she said. “The legislation that’s coming in California worries me a lot, especially with the recycled content and source reduction. Those things – even if you have a good system – you need to track reduction over time, you need to prove recycled content. These things aren’t just, ‘I know I have a box and it weighs 50 grams.’ It’s not enough.”
“Everyone wants to make their own mark on what they think is important for the community or environment.” –Andriana Kontovrakis, director of compliance services for North America at RLG
Kontovrakis said while some companies choose to do it on their own, third-party companies such as RLG and others can also provide support at varying levels.
Some companies have RLG survey suppliers and generate reports for them in entirety, Kontovrakis said, while others simply send RLG the data to put into report format for the specific country needed.
Blessing said HCPA recommends all companies get a handle on their data, regardless of EPR mandates, because it can be helpful to have that overall understanding of the packaging.
“Equally, make sure you have someone who is responsible for making decisions about your packaging,” she said.
What to do?
For companies that are just now realizing they need to get started but feel overwhelmed, Washburn suggested reaching out to trade associations to see if they have resources available to help. Tracking guidance coming from selected PROs in each state as it comes will also help, he added, and consultants such as Washburn and his colleagues are always available for advice, support and software assistance.
“This is a lifelong procedure now for these companies and if they set it up on the front end well, they’re going to be better positioned for a smooth transition for more and more states coming on-line,” he said.
Kontovrakis echoed that EPR compliance services such as RLG can be a big leg up, especially for those feeling overwhelmed, as can trade associations.
“It can be difficult, but ultimately there are resources out there that can help,” she said.
Blessing said her association is doing just that. They plan to have Washburn at the annual meeting to talk to members. HCPA is also advocating for more consistency in reporting and eco-modulation among EPR programs.
“That will really help our members be more efficient and it will also help them compare data across states and help states compare data to each other, to identify what’s working and what’s not in EPR programs and even perhaps allow us to pull out which elements are most optimal for an U.S. EPR program,” Blessing said.
Carvell said she’s encouraged by the drive for harmonization that Circular Action Alliance has been pushing as a PRO, and noted it’s vital to keep an eye not just on what has already passed in the four states, but to keep “scanning the horizon.”
“It’s not just going to be four. There will be more. They cannot ignore it,” she said, adding that “You cannot just leave that until the first of January 2025 to say ‘I’m going to start this now.'”
A version of this story appeared in Resource Recycling on Dec. 1, 2023.