Extended producer responsibility (EPR) laws for packaging have been passed in seven US states, with more in development. The laws typically require packaging to be collected, sorted and then sent to a responsible end market (REM) for processing.
REMs are generally defined as markets in which the recycling of materials or the disposal of contaminants is conducted in a manner that benefits the environment and minimises risks to public health and workers' health and safety.
REMs are a new concept introduced through EPR laws and present a "new challenge in the recycling supply chain", according to Circular Action Alliance (CAA), the main producer responsibility organisation (PRO) operating across EPR states.
The concepts underpinning REMs – such as legal compliance and environmental soundness – are already audited in other contexts; however, they have not previously been used "in this specific combination" in regulation, the CAA said.
According to The Recycling Partnership, an organisation working with communities, companies and policy makers to improve US recycling, the need for REMs became evident from reports between 2015 and 2020 of American recyclables being "dumped or mishandled in South-East Asia and other overseas markets". A key objective of REM requirements is therefore to "help rebuild public trust in recycling".
Who must comply with REM requirements?
The overall principle of EPR is that producers are responsible for what happens to their packaging, although so far only California’s law specifically says that packaging does not count as recycled unless it is sent to a verified REM.
However, verifying whether a market is "responsible" falls to the PRO, which must establish a system to ensure that minimum criteria are met.
In Oregon, material recovery facilities (MRFs) must also ensure that the materials they sort are sold to REMs.
End market entities that wish to accept materials from EPR states must comply with the requirements, even if they are in another state or country.
The new reporting and auditing requirements will apply across the supply chain, according to trade body the Recycled Materials Association (ReMA).
End markets can include steel mills, aluminium mills, glass beneficiation plants, plastics reclaimers, paper mills and composting facilities. Chemical recyclers can also count as an end market in some states. For example, in Colorado, chemical recycling is allowed if the recyclers meet additional criteria.
REM requirements can also apply to secondary processors, brokers and transporters moving material between MRFs and end markets.
State differences
The REM provisions vary across states. Among those that have introduced EPR so far, all but Maine include REM criteria. However, Maine requires that, for a material to be considered recyclable, it must be accepted for recycling by at least two facilities in the US.
Oregon, California and Colorado are furthest along in the process of introducing and implementing REM requirements.
The CAA is currently developing a standard to harmonise the verification process for third-party auditors. It has proposed common rules where states have similar obligations, alongside appendices covering state-specific elements, such as those in California and Oregon. For example, requirements in these states vary by material type.
The standard does not cover composting facilities because of the wide variation in criteria, although the PRO has said verification approaches will be developed through state programme plans or a separate standard.
What makes a REM?
In general, to qualify as a REM, an entity should be transparent, environmentally sound, compliant with local laws and meet minimum recycling yield thresholds. Facilities must also be willing to undergo audits and provide information demonstrating that they meet the following criteria:
- transparency – the facility must track and record incoming and outgoing materials to prove the chain of custody. In Oregon, this extends to entities transporting, brokering or transferring materials from MRFs to end markets;
- environmental soundness – the facility must comply with environmental laws, operate under valid permits for hazardous waste handling, avoid uncontrolled releases and maintain environmental and waste management systems. The CAA standard also proposes disclosure of chemicals of concern (CoCs) used in processing, in accordance with Oregon rules. California additionally requires incompatible materials to be further processed or disposed of in a way that minimises environmental risk;
- legal compliance – the facility must comply with applicable local, state or national laws, including those on labour, health and safety, and environmental protection, and have systems to ensure ongoing compliance; and
- minimum yield – the facility must demonstrate that a specified proportion of the material is recycled or that it has the capability to do so. Oregon requires that at least 60% of a material be recycled, while in California, thresholds will be set by the PRO for each material type, alongside additional rules on contamination and process losses. The CAA has proposed an alternative concept, "processing and disposition assurance", which focuses on demonstrating technical capability and effective operational controls. Facilities should also work to improve efficiency to avoid unnecessary disposal of recyclable material.
Concerns over REMs
The CAA noted in a webinar that determining whether an end market qualifies as a REM has commercial implications, as some operators may opt out of state programmes if verification is too burdensome.
During the consultation on Oregon’s provisions, industry groups raised concerns that materials may not be counted as recycled unless sent to a REM. If criteria are overly stringent, some materials that are technically recyclable could fall outside official definitions.
Law firm Steptoe also highlighted a potential market imbalance: MRFs have little incentive to sort materials without a viable end market, while end markets cannot exist without a steady supply of material.
However, the CAA has said it is also working to support the development of end markets.
In the responses to Oregon’s consultation, industry groups said the material-specific approach makes compliance and interpretation difficult. The definitions of end markets for each material type are based on different processing steps, rather than just the first entity that processes recyclate into feedstock.
They also raised concerns that the environmental impact measurements include reporting on CoCs, as they said this is beyond the scope of Oregon’s packaging EPR law.
The development of Oregon’s verification system and the proposed CAA standard have highlighted challenges in applying REM criteria across materials and supply chains. Outcomes may ultimately depend on whether potential end markets, both in the US and internationally, are willing to sign up to become REMs for the EPR states.