In My Opinion: Understanding packaging EPR producer fees

The extended producer responsibility programs for packaging that are currently unfolding in several states impose two primary obligations on producers of covered materials: reporting data and paying fees to a producer responsibility organization. 

This article presents an introduction on the various types of fees assessed against producers under extended producer responsibility programs, or EPR programs. These fees matter not only to the producers (i.e., entities selling or distributing) of recyclable materials — including because fees will be higher for non-recyclable materials — but also for the entities that collect, sort, process and market recyclables, as the producer fees will fund significant improvements in recycling infrastructure.

Circular Action Alliance, the approved PRO in California and Colorado and the only prospective PRO in Oregon, intends to harmonize fee assessments across states as much as possible in order to streamline producer compliance. CAA has repeatedly emphasized that because producer fees are supply-driven — assessed based on the total amount of covered material sold in each state — the initial fee rates will change, potentially significantly, in the initial program years as CAA’s producer data becomes more comprehensive and accurate. 

Even without a clear picture yet of what the exact fee numbers will be, the various state statutes, regulations, advisory meetings and CAA input provide ample information from which producers can understand and begin to plan for their fee obligations. The sections below summarize the types of producer fees, CAA’s approach towards setting those fees and important differences among the states.

Low-volume producer fee in Oregon, Maine and potentially Colorado

Oregon’s statute specifically requires that producers generating between $5 million and $10 million in gross global revenue per fiscal year be charged a uniform annual fee (as opposed to the more complicated, multi-factor eco-modulated fees assessed for larger producers). CAA will likely publish this uniform fee in mid-2025.

In Colorado’s advisory board meetings, CAA staff suggested they are considering applying a uniform annual fee for similarly sized low-volume producers in Colorado as well; however, this approach has not yet been confirmed.

Maine has developed a hybrid approach whereby low-volume producers are required to report only total covered material weight (rather than by each covered material category) and pay $500 per ton, up to $7,500 per year.  Although not a uniform fee, the data reporting burden is reduced.

A uniform fee or hybrid approach removes considerable granularity from the data tracking and reporting a producer must undertake for the PRO, especially for the purposes of assessing base material category fees and eco-modulated fee adjustments, which would then not mandatorily apply to low-volume producers (in certain scenarios, those producers may still elect to apply for eco-modulated fee adjustments). However, for non-low-volume producers, fee assessment becomes more complex.

Base material category fees

CAA is developing a universal list of covered material categories. Some of these categories would not be applicable in certain states — for example, Oregon’s paper product categories would not be relevant in California where paper publications are not covered materials. But from this list a producer will be able to categorize the total weights of specific covered materials they use each year.

This matters because CAA will set different fee rates for each base material category (typically in cents per pound). Multiple factors inform each base fee rate, including the cost to recycle that material and its commodity value once recycled. Recyclable material categories will have lower fees than non-recyclable categories (in Maine, non-recyclable materials may be assessed two to five times the rate of recyclables). Although base fees have not yet been finalized, CAA’s input into advisory meetings and publications thus far indicate the following relationship among broad categories of material base fees, from least expensive to most expensive: paper/fiber products, wood/organic materials, metals, glass/ceramics, rigid plastics, flexible plastics.  

The factors outlined above, and therefore the base fee rates, will differ among states, but the structure is the same. Producers pay the base fee rate per unit weight of each covered material category they use each year.

Eco-modulated fee adjustments

A producer’s base fees are then adjusted by eco-modulated factors designed to incentivize behaviors deemed beneficial for human health, the environment or the circular economy. These adjustments apply either a credit or a malus fee according to attributes of how covered material is manufactured, designed and eventually used by a consumer. 

The range and type of eco-modulated adjustments vary considerably from state to state, but certain criteria appear universally, including credits for using post-consumer recycled content and source-reducing packaging, and maluses for using materials not accepted at recycling facilities or that disrupt the recycling of other materials. Other factors include penalizing low source reduction compared to other producers using the same material or crediting labeling that improves consumer disposal practices.

Viewed across all states with EPR programs for packaging, the eco-modulated adjustments present a tapestry of bonuses and penalties. CAA is working to develop a graduated fee algorithm as a means of adding transparency to their fee assessments, which will provide producers with measurable criteria to understand how their fees may be adjusted. EPR Group has extensively analyzed the eco-modulated provisions in California, Colorado, Oregon, Maine and Minnesota and can provide producers with the comprehensive understanding needed to optimize their packaging designs across the country.

California’s Plastic Pollution Mitigation Fund

In California, producers using plastic covered materials will be assessed an additional fee based on their market share of plastic covered material in the state. CAA will assess these fees to total $500 million per year through 2037, although they may collect up to $150 million from the manufacturers of virgin plastic resins, who may not necessarily qualify as producers.

Conclusion

Producers will begin paying fees to CAA in July 2025 in Oregon, January 2026 in Colorado and January 2027 in California. Maine and Minnesota have not yet finalized their timelines but anticipate collecting producer fees in mid-late 2026 in Maine and early 2029 in Minnesota.

CAA has indicated that at least in Oregon (but likely in other states as well under the same rationale), producer fees will be higher in the program’s initial years and then decrease once the upfront investments have adequately upgraded recycling infrastructure.

It is critical that producers understand and begin to plan for the various fees under the several EPR programs, especially as the eco-modulated adjustments contingent on their packaging decisions have the potential to significantly influence their total fees. EPR Group provides an array of services for companies seeking to understand their producer obligations or exemptions in each state, how to plan for fee assessments and how to strategically comply with the EPR programs.

A version of this story appeared in Resource Recycling News on Oct. 8.

At EPR Group, Adrien analyzes EPR program policies and requirements, attends regulatory workshops and Advisory Board meetings, evaluates issues for public comment, and provides support for clients on various aspects of the EPR programs in California, Oregon, Colorado, Maine, and Minnesota, with a focus on producer status evaluations and producer fees, especially eco-modulated fees.

The views and opinions expressed are those of the author and do not imply endorsement by Resource Recycling, Inc. If you have a subject you wish to cover in an op-ed, please send a short proposal to [email protected] for consideration.