Companies want a tax on food wrappers. Just not Maine’s.
Packaging fees should be spent on recycling upgrades, industry groups say.
Corporate promises to shoulder more of the cost of managing America’s trash are being tested in Maine, which could become the first state to charge companies for the cost of recycling.
State lawmakers as soon as this week could vote on legislation that would impose a fee on bottles, boxes, food wrappers and other packaging to fund waste programs, a concept known as extended producer responsibility. But the measure is being fought by some of the companies that just this year endorsed the practice, at least in theory.
The conflict: Who will control the money and how it’s spent. Packagers and consumer brands want authority to manage the revenue and spend it exclusively on recycling. Maine regulators and their allies in the legislature say government needs a hand in the program, which would reimburse municipalities for waste hauling and landfill costs in addition to funding recycling.
“Producers don’t trust the government and vice versa,” said Sarah Nichols, sustainability director at the Natural Resources Council of Maine.
If the bill becomes law, it would be the first of its kind in the country and could give momentum to a broader push by state lawmakers to curb plastic waste and rationalize a recycling system that is outdated, confusing and varies from town to town.
That’s a goal shared by business groups, including AMERIPEN which represents plastic makers and consumer goods companies, the Consumer Brands Association, and the American Chemistry Council. The trade groups and their members, including Dow Chemical Co., PepsiCo and Nestlé, endorsed packaging fees earlier this year.
The industry’s political change of heart was driven partly by self interest. Corporations, under pressure from customers and shareholders, have pledged to use more recycled materials. But without access to salvaged waste, brands can’t make good on those promises. Less than a third of packaging and only 9 percent of plastic is recycled, according to the Environmental Protection Agency.
“Maine is on pace to become the first state to set the standard. Using the money to bolster landfilling makes no sense,” Geoff Freeman, president and CEO of the Consumer Brands Association, said in an interview.
State-level campaigns to control and manage plastic waste were gaining steam until the Covid-19 pandemic closed capitals, and masks, gloves, take-out containers and other single-use items suddenly became necessities.
Now, the push has picked up again. Washington enacted a law in May requiring plastic bottles to contain more recycled material. Colorado lawmakers last week voted to ban plastic bags. A dozen states have introduced extended producer responsibility bills this year. So far, only Maine is on the verge of passing a law, according to the National Caucus of Environmental Legislators.
The Maine bill would direct the state’s Department of Environmental Protection to open a competitive bidding process to manage the program. Groups interested in the job would be required to assess waste and recycling costs and investments needed to improve the system. Input from packaging makers, municipalities, environmental groups and waste and recycling companies would be required.
Once a plan is in place, regulators would calculate the fee on packaging. The revenue would reimburse local governments for recycling, waste hauling and landfilling, which cost Maine residents an estimated $16 million and $17 million a year.
For companies that would be taxed under the bill, paying for dumping is a non-starter.
“We want to make sure the funding from packaging that isn’t recyclable right now doesn’t go to landfilling, but instead funds recycling infrastructure,” said Andy Hackman, a lobbyist for AMERIPEN and the Flexible Packaging Association. “In Maine and other states, landfilling is the cheapest option already for a municipality. There isn’t a requirement that if they take the money, they have to start changing those practices.”
The legislation’s proponents say the trade groups have been unwilling to compromise and accuse them of spreading misleading information about the measure’s economic impact.
Taxpayers shouldn’t have to pay for waste that has no chance of being recycled, Nichols said. And she took aim at the Retail Association of Maine and the industry-funded Campaign for Recycling and Environment for statements and Facebook ads warning that household grocery bills could jump by more than $50 a month if the legislation becomes law. The finding is from a study that relied on questionable methodology by an author who had a conflict of interest, she said.
The study was conducted by Calvin Lakhan of York University in Toronto, who leads a project that has, according to one report, received hundreds of thousands of dollars from industry stakeholders, including Clorox Canada and Club Coffee, which makes compostable, single-serve brew pods.
Lakhan said no company or trade group funds his research on extended producer responsibility.
“We are not looking to advance any corporate agenda,” Lakhan told POLITICO. “We want to inform evidence-based policymaking.”
He acknowledged that the quality of the data used for the study was “extraordinarily poor” because most jurisdictions, including Maine, don’t track what types of packaging are being recycled or what it costs to dispose of it.
Lakhan used data from Ontario’s extended producer program, adjusted for regional differences, to estimate that Maine’s proposed program would cost state residents $99 million a year. That’s six times what the state estimated. And there’s no way to know how packaged goods companies and retailers might respond to increased costs, Lakhan said.
“Do they internalize it or pass it on to consumers? The most realistic is probably a combination of both,” he said. Lakhan’s study assumed all costs were passed to consumers.
Phil Rozenski, a vice president at foodservice packaging company Novolex and president and CEO of the Campaign for Recycling and Environment, said packaging fees will be factored into the cost of goods and ultimately paid by consumers.
“This bill doesn’t address the real problems in the recycling system,” Rozenski said. “It will collect a large amount of money from the public to fund the system of the past, not the future.”
A 2020 report from consulting firm RRS compared the cost of a basket of goods, including mayonnaise, potato chips and body wash, across Canadian provinces with and without industry-funded recycling programs. The study found no correlation between fees on packaging and prices paid paid by consumers.
“The talk of rising grocery prices is just about distracting from the real problem,” Nichols said.
If Maine’s bill passes, it could set the stage for others to follow. Washington and New York are expected to consider a packaging tax next year after efforts earlier this year failed to gain traction.
“You can be supportive of producer responsibility and make statements about it. But when you get down to the details of how the system works and who is paying what for what services, it gets more complicated,” said Sego Jackson, Seattle’s strategic adviser for waste prevention and product stewardship.
“It’s frustrating to see the struggle against it, instead of figuring out the best system possible,” he said, “because everyone can be a winner.”