While extended producer responsibility – the financial obligation for the end-of-life management of the products a business puts on the market – is well established in Europe, it has been slower to develop in North America for all but a few types of products.
But since 2021, five states have passed packaging EPR laws aimed at boosting recycling and reducing plastic waste. While the goals are similar, the requirements differ from state to state, making it a challenge for companies to understand their obligations – including if they even have any – under these regulations.
To help shed some light on these new packaging EPR laws, PPAI Media reached out to Circular Action Alliance, currently the only active producer responsibility organization (PRO) in the U.S. dedicated to implementing EPR laws for paper and packaging. This organization analyzes the relevant EPR laws and assists producers with the required reporting, collection and recycling or disposal of covered packaging materials.
In the Q&A below, based on a conversation with PPAI Media, Geoffrey Inch, CAA’s senior vice president of producer services, sheds some light on how to determine your company’s obligations and the important steps needed to comply with these programs. Note: The conversation has been edited for brevity and clarity.
PPAI Media: We want to help our members understand their potential obligations under these new EPR laws. One of the main questions is “What is a producer?”
Geoff Inch: It can be confusing, because “producer” doesn’t always mean the same thing everywhere. We’ve been working with the regulators to clarify what that definition is for each program.
What CAA does is, when you register with us – and even prior to – as part of helping you understand whether you should register, we’re trying to provide convenient access to those definitions so that people can take a look. They can take their own unique business model and apply it against those definitions.
CAA can’t give legal advice. We’re not in a position to do that for any individual company, but what we try to do is provide those definitions and make it really clear and easy for people to get to that information because we know this is new for many companies.
Geoff Inch
Senior Vice President of Producer Services, Circular Action Alliance
And remember, it’s a regulatory requirement if you’re obligated, so we encourage people to work with their regulatory teams, their legal teams, their legal counsel, whatever you do in your company to make a determination like this on a compliance requirement.
NOTE: Inch recommends taking a look at CAA’s recently released guidance document on covered materials and producer definitions for Oregon and Colorado. He says this information should help companies determine their obligations with a two-prong test:
- First of all, is the material that I’m putting onto the market covered under the program? That’s what we mean by covered material. And if it is, somebody has to pay fees into the program.
- The next question is, OK, who is the obligated producer to pay those fees?
When you start, you might have different business arrangements across your portfolio, so we encourage people to break it down into scenarios, put those scenarios to the test against this document, and then you should have a good sense of where your obligations lie.
And if you have any clarifying questions, you need to reach out to us. We can point you in the right direction and try to give you more information to help make those determinations.
PPAI Media: The promo industry is built on a variety of partnerships throughout the supply chain, so there’s some concern over duplicate reporting. How do companies decide who’s obligated?
Inch: By talking to each other. They’re going to have to figure that out, business to business, who the obligation lies with and who’s going to do the reporting.
We recognize there could be some confusion at the start-up of these programs, and if there is any double reporting – I’m not saying CAA will be perfect in catching everything – but we will be doing validations of reports, we will be digging into that data, trying to understand the methodologies that each producer used in preparing and submitting their reports, so that’ll allow us to come back to people and say, “Hey, I think we got this from somebody else. Can we clarify that?”
Just to point out as well, for smaller companies, under the regulations there are some small producer exemptions based on the amount of revenue that they have in in the U.S. If they’re only obligated for a small amount of material, they may actually be able to still register with us but then get to the point of reporting and understand that they have an exemption, so they wouldn’t have to do reporting or pay fees.
PPAI Media: Where do those fees go? Part of the fees are to fund Circular Action Alliance, which is a nonprofit organization, but the bulk of those fees go to fund recycling programs, right?
Inch: Yes, a very small part goes to fund our organization. The vast majority – I would say it’s 90 to 95% plus – goes into operating and improving the recycling systems. That’s the intent: The producers are funding the system to operate and improve elements of it to meet the targets and the outcomes of the program.
We care about doing this and doing this well. We actually want to save producers money by building a model that’s very efficient. They can comply by working with CAA across multiple states, they can have a harmonized experience, and they can have an efficient organization that really helps scale our operations in a way that helps make it overall lower administrative costs for producers. That’s one element. But first and foremost, we need to comply with regulations, so we’re working with each individual state to have a high-quality program that we submit to them.
ICYMI: How Will New Packaging EPR Laws In 5 States Affect Promo?
PPAI Media: What are some of the steps you recommend that businesses take to prepare for reporting?
Inch: The very first thing is to understand if you have covered materials.
- Are you putting out packaging that applies?
- Understand who the obligated producer is so you have an understanding of who should be registering.
- Then, register with CAA and sign the Participant Producer Agreement. It does not obligate you to pay fees, but it does set the base terms and conditions by which CAA and participant producers would work together for compliance.
The reporting deadline for Oregon is March 31st, 2025. If you’re obligated and you’re likely to have to report, the time is now to start figuring out how you’re going to get your data to report to CAA.
Figure out inside your company who you should be working with – every company is going to have a little different team that’s working on this. The data is not something that typical ERP systems can just pull out, so you’ll have to do a little bit of work to figure out where the data is that you need and who has information on packaging that you use. In some cases, it’s a third party.
PPAI Media: It sounds like reaching out to your team at CAA is not only the best way to get the guidance that our members are looking for, but a necessary step when it comes to complying with these packaging EPR laws.
Inch: Yes. I would say two things:
- Signing the Participant Producer Agreement is going to get you access to all the guidance documents. We’re preparing a great spot for people to go get all that information. They can read that, they can send that to their regulatory teams, their legal teams. You can have everything you need.
- And then of course, reach out to us if there are questions. We are staffing a support email inbox at producer.support@circularaction.org, and we’ve got a team that’s monitoring that to answer any questions.
We’ve also got some other team members that can go a little bit deeper and meet with companies if they’ve got questions as well.
PPAI Media: What’s the process to get started with your organization?
Inch: That’s the easiest thing: Hit the registration form and fill in your information. At that point, you will get the Participant Producer Agreement sent to you for signing. Once you sign that, you’ll get all the guidance, and then you will hear more from us regularly on compliance communications around when you’re going to get access into the reporting portal and when the data is due.
PPAI Media: What’s the timeline? Once a company has registered, how soon can they expect to hear back?
Inch: Companies have been getting the agreement within a business week at the latest. It’s usually a lot quicker than that. And then as soon as you sign it, I would say just a few more days [for the guidance after signing the PPA].
We are also going to have a separate document for [each state’s] program that will be called a state addendum, which includes all the specifics of meeting that particular state’s regulation. Signing that addendum is a document that obligates you to pay fees to CAA, so it’s more of a commitment.
PPAI Media: Do you provide updates on deadlines to the companies that have registered with you to let them know what’s coming up and their compliance status?
Inch: We will. We are absolutely going to monitor compliance of our registered producers and have a status throughout the process.
And I should say that we have already had one compliance deadline pass, which was a registration deadline in Colorado of October 1st, so anybody who is an obligated producer technically should have registered by October 1st to be compliant. Staying engaged is a really important part of working with CAA, because producers need to stay on track with these upcoming dates to stay in compliance. We also have requirements to disclose data on compliant and noncompliant producers as we hit certain regulatory deadlines.
We’re doing our best to try to have those [deadlines] on the website. When you register with us, you’ll get a lot of communications. We do try to make it clear where we need an action from a producer.
RESOURCE: Circular Action Alliance on YouTube
PPAI Media: What are some pitfalls people should be aware of while they’re trying to navigate this process?
Inch: The challenge is just that it’s new for a lot of people, so we understand that there is not clarity on everything. We feel that as an organization, part of our role is to seek that clarity on behalf of the producer, so we work really hard to do so, and we are constantly listening to where the questions come from, trying to get those things answered.
A lot of those are not answers that we can provide immediately because we have to go get in alignment with the regulator or wait for something to be finalized in order to provide the specifics, or we can only tell you so much, but we can guide you to the information you need to make the decision yourself. That’s the position we’re in. We know it’s a bit challenging, but we’re hopeful that we’re giving enough resources for people to make those decisions, and we’re open to ideas if we can make it better.
CAA is also trying to provide flexibility in how companies can comply in the beginning of these programs, including accepted estimation methodologies, so that they aren’t expected to have detailed data sets across their whole value chain on day one.
Geoff Inch
Senior Vice President of Producer Services, Circular Action Alliance
PPAI Media: Several more states are exploring their own EPR packaging laws. Do you have any indication of what’s next?
Inch: Our mission is focused on implementation of EPR as it’s passed and where we’ve been selected as the PRO, so we’re focused on Oregon, Colorado and California implementation first and foremost. CAA has also been selected to represent producer interests as the PRO on the State Producer Responsibility Advisory Council in Maryland. Beyond that, we have people that are monitoring some of the states that either have passed bills or are evaluating bills for planning purposes. We’re monitoring those markets, but our focus is squarely on where we need to be implementing on behalf of our producers.
The vision of CAA is to be a leading PRO that can help producers navigate multiple programs within the United States. We really hope that a number of things we’re building are all-around harmonizing our service delivery for producers so that if they’re obligated in multiple states, they’ve got one PRO to work with and one portal that they go to for reporting their supply data.
Sign up for weekly onboarding sessions, quarterly updates and more to get the latest information from Circular Action Alliance.
