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Understanding packaging regulations is crucial, especially since they help protect public health and push for environmental goals like making packaging more recyclable and cutting down on plastic waste.
But let's be real—keeping up with the constantly changing rules can be tough. Laws evolve quickly, and the legal jargon can make it hard for brands to figure out how these regulations affect their packaging and day-to-day operations.
This is particularly tricky for online retailers who ship products across state lines. Plus, there's still a lot of uncertainty about how big-picture laws, like Extended Producer Responsibility (EPR), will shape up in the future.
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Understanding Packaging Regulations: A Guide for Brands and Distributors in 2024
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To help you navigate this maze, we've put together a comprehensive guide that breaks down key sustainable packaging requirements and legislation across various states and retailers.
If you don’t follow the specific packaging laws, you could face fines or legal trouble. Ignoring the sustainability guidelines from the Federal Trade Commission can also hurt your brand’s image, making it less appealing to consumers and potentially landing you in hot water with advocacy groups or even lawsuits.
Knowing how current packaging regulations impact your business helps you avoid unnecessary headaches and keep things running smoothly.
That said, just following the laws isn’t enough when it comes to sustainability. While it’s essential to comply, these laws are usually just the bare minimum and don’t always push brands to make their packaging as eco-friendly as it could be.
Immediate Steps for Brands
Many states (including California) now require producers to join a Producer Responsibility Organization (PRO) to manage the end-of-life treatment of their packaging.
If your brand sells more than $1 million worth of products in packaging made from "covered materials" within or into California, you are likely classified as an obligated producer and should consider registering with Circular Action Alliance (CAA), the state’s designated PRO. Registration is free and requires only basic information. Detailed data on the types and volumes of materials used will be collected by CAA at a later stage. During registration, you'll be asked to indicate whether your brand might also qualify as a producer in Colorado and Oregon. If you're uncertain about your status as an obligated producer, it's advisable to consult your legal counsel.
More states are setting targets for post-consumer recycled (PCR) content in packaging materials. Meeting or exceeding these targets can help your brand stay compliant.
Reducing reliance on single-use plastics can help align your brand with sustainability goals and avoid potential future restrictions.
Shifting to packaging materials that are widely accepted in recycling programs can help ensure compliance and improve your brand's sustainability credentials.
Ensuring that your packaging labels accurately reflect the recyclability and compostability of your materials can prevent consumer confusion and potential regulatory issues.
To get ready for EPR and Truth in Labeling, it's important to carefully evaluate all your on-package labels and claims. Consider these steps: (1) conduct a thorough review to ensure accuracy and clarity, (2) seek third-party validation and certification for your claims, and (3) update or refine any claims that might be unclear or easily misunderstood.
Use third-party certifications like FSC, GRS, and BPI to validate your packaging's sustainability by partnering with certified manufacturers.
What is EPR?
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EPR legislation, or Extended Producer Responsibility, is designed to shift more of the financial and operational responsibilities for the treatment and disposal of certain consumer products onto the producers, manufacturers, and retailers who sell and profit from these items.
There’s no one-size-fits-all approach to structuring an EPR law. Generally, though, EPR requires producers or retailers of the products in question to contribute to a Producer Responsibility Organization (PRO). The PRO handles the collection and recycling of these items, and the associated costs are usually built into the product's price in some form.
While EPR has been around for some time, it's recently gained more attention as states—and even the federal government—are looking to it as a solution for the waste generated by Product Packaging and Paper Products (PPP).
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Today, four states—Oregon, Maine, Colorado, and California—have passed EPR bills related to packaging. Though the specifics of these bills vary, they generally follow a similar approach.
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Brands that sell packaged goods (and in some cases, the producers and printers of that packaging) are required to join a PRO. In some states, there will be a single PRO selected through a competitive process, while other states may allow multiple PROs to operate. Brands contribute to the PRO based on the amount and environmental impact of the packaging they use. The funds collected are then used to support recycling infrastructure, educational efforts, investments in recycling technology, litter clean-up initiatives, and more. Some states have also set specific recycling and waste reduction targets, with hefty fines for PROs that fail to meet these goals. Others use a system called eco-modulation, where producer fees decrease as the environmental benefits of their packaging increase.
Who is the "producer"?
In the U.S., EPR laws typically cover packaging (and related items like printed papers and food service ware) that consumers take home from the point of sale or receive via e-commerce. Generally, the brand owner is considered the responsible party under these programs.
But, it’s worth noting there’s no universal definition of “the producer” in EPR legislation.
This can get complicated, so each state provides (or will provide) clear guidelines to help companies understand when they are considered a responsible party.
For instance, in a physical retail setting, if a product is sold in packaging with the manufacturer’s or a licensed brand’s name, the brand is the producer. If the product is sold in unbranded packaging, the manufacturer is responsible. However, for the shopping bag given to the customer, the entity operating the retail store is the responsible party.
Oregon is one of the few states that explicitly addresses responsibility for internet sales and e-commerce packaging. Their legislation states that for packaging used to ship an item to a customer in Oregon (like an outer box with packing material or a mailing envelope), the producer responsible for compliance is the entity that packages and ships the item. Other states are less specific about internet sales, and it’s expected that the definition of the responsible party in these cases will become clearer over time.
In most instances, small businesses with less than $5 million in sales or that deal with less than one metric ton of covered products in the state are exempt. Non-profits and government organizations are typically exempt as well.
EPR Legislation in Four Major States
Oregon
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Oregon’s Recycling Modernization Act, passed on August 6, 2021, represents a significant step forward in updating the state’s recycling system. According to Oregon’s Department of Environmental Quality, the Act is designed to “build on local community programs and leverage the resources of producers to create an innovative approach that works for everyone.”
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This law places a shared responsibility on packaging producers to manage their products effectively after they've been used. The Act officially went into effect on January 1, 2022, with program changes scheduled to begin in July 2025.
One of the key focuses of Oregon’s legislation is truth in labeling, particularly addressing the confusion surrounding composting and plastics recycling. Unlike similar laws in Maine and Colorado, Oregon’s legislation allows for the creation of multiple Producer Responsibility Organizations (PROs). Each producer must join a PRO to sell products in packaging covered by the law, including plastic, food service ware, and paper products.
Colorado
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Similar to California, Colorado has moved forward with the selection of its PRO: the Circular Action Alliance (CAA, chosen May 2023). The PRO will take on the responsibility of covering 100% of the recycling costs in the state, which includes consumer education and government oversight of the program. The CAA will be responsible for coordinating, funding, and managing the statewide recycling system. Companies will pay membership dues to the program, which will be calculated based on the amount and type of packaging they sell in Colorado.
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A needs assessment, program plan development, and rulemaking hearing are scheduled for 2024. The PRO program plan, including eco-modulation rule drafting and hearing, is due in 2025. Brands are required to join the CAA by July 1, 2025, and will begin paying dues to the CAA in 2026.
Colorado's EPR legislation is more comprehensive than California's, covering not only packaging but also printed paper and both brand owners and packaging producers. Your company is considered a producer if you manufacture a product that is sold or distributed in Colorado using packaging materials, whether under your brand or without any brand identification. This also applies if you license a brand or trademark for product packaging that is sold or distributed in the state.
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Additionally, if you import packaged products containing covered materialsinto the U.S. for use in Colorado, or if you sell or distribute products through online transactions using packaging materials to protect or contain the product, you are considered a producer. This includes companies that package or ship products sold or distributed in Colorado through internet transactions.
If your company is the first to distribute covered materials into or within Colorado, you are also classified as a producer. Covered materials include packaging and paper products, with certain exemptions. Furthermore, if you publish paper products like magazines, newspapers, catalogs, or similar publications, manufacture paper products under your own brand, or own or license a brand or trademark for paper products sold or distributed in Colorado, you fall under this legislation.
Maine
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On July 2, 2021, Maine took a major step toward improving recycling with the passage of LD 1541, also known as the “Act To Support and Improve Municipal Recycling Programs and Save Taxpayer Money.” The primary goals of this legislation are to boost recycling rates, reduce packaging pollution, and alleviate the financial burden on taxpayers.
This law requires packaging producers, or brand owners, to pay fees into a single, statewide Stewardship Organization (SO). The SO is responsible for compensating municipalities for managing the packaging waste generated by households and businesses. This compensation will cover various costs, including infrastructure upgrades, public education on recycling, and the development of end markets for recycled materials.
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The Stewardship Organization will be selected in 2026, and producers will begin making their first payments to the SO by the end of that year. While Maine has not yet set specific recycling targets, the state has adopted an eco-modulation approach, where fees are adjusted based on the environmental impact of the packaging.
California
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When selling into the State of California, producers must register with the chosen PRO (Circular Action Alliance) by July 1st, 2024. Following January 1, 2027, producers are prohibited to selling “covered material” in California unless complying with all EPR requirements.
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What are “Covered Materials?”
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Single-use packaging that is typically recycled, discarded, or thrown away after use and is not usually refilled or reused by the producer. This includes plastic and plastic-coated paper food service items like utensils, trays, plates, clamshells, containers, wrappers, straws, and similar products.
The list of Covered Materials includes 98 different items, but less than half were deemed recyclable according to CalRecycle's CMC December 2023 update. Certain items are exempt, including medications, prescription drugs, infant formula, nutritional supplements, pesticides, hazardous materials, beverage containers covered by California’s bottle bill, and other specific products.
Producers using materials that have consistently achieved a recycling rate of 65 percent or higher for three consecutive years before January 1, 2027 (and 70 percent or higher thereafter) may qualify for an exemption from paying fees to the PRO.
The fee structure is still under development. According to the statute, a program plan must be implemented by 2027, which will be funded through producer fees.
Additionally, the PRO is required to pay an annual surcharge of $500 million. CalRecycle may establish rules to specify the timeline for when producers need to start paying these PRO fees.
California's SB 54, signed into law in June 2022, establishes the most extensive EPR program in the U.S. By 2032, all packaging in California must be recyclable or compostable, with significant interim recycling targets set for 2028 and 2030. This law will likely have global implications as brands adapt to meet California's stringent requirements.
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SB 343
Under SB 343, a product or packaging can only be labeled as "recyclable" in California if it meets two criteria based on CalRecycle's guidelines:
1.
The material type and form
must be collected for recycling
by programs serving at least
60% of Californians.
2.
It must be sorted by large-volume
transfer/processing facilities (LVTPs)
that serve at least 60% of the
state's recycling programs.
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Current Status
In December 2023, CalRecycle released a preliminary Material Characterization Study that outlines the types of materials recycled in California. This study helps brands identify which packaging can use the "chasing arrows" symbol or other recyclability indicators in the state. The report was open for public comments until early April, with the final version expected in June 2024 but this has been delayed.
Timeline
The final findings of the Material Categorization Study are due to be published by the end of Q2 2024. Brands will have 18 months from that date to ensure their packaging complies
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What Brands Need to Do to Prepare
After the final Material Categorization Study is released, brands should review the findings to determine which of their packaging materials are considered "recyclable" in California. Brands may need to update their labeling or switch to packaging that meets California's recyclability standards. A lot of the existing packaging labeling will need to be changed to comply with these new laws. Brands selling in multiple states should be aware of potential compliance challenges, as other states might require resin codes even if the material isn't recyclable, while California will ban such labeling. To avoid heavy fees and penalties, it’s crucial for brands to work with a vendor well-versed in the SBS 343 legislation to ensure their labeling is compliant.
Key Packaging Laws in Cities and States
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Extended Producer Responsibility is a type of legislation that shifts more of the responsibility for managing a product's entire life cycle onto the manufacturers and producers. The goal of EPR legislation is to lessen the environmental impact of products and their packaging.
Most EPR laws require producers to take on the financial burden for handling their products at the end of their life cycle. To manage this, many EPR programs encourage or require producers to join a producer responsibility organization (PRO). These organizations typically collect fees from their members to cover the costs of running the program and managing products at the end of their use.
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Taxing / Fees
Sometimes, instead of banning outright materials, states will tax certain products. For example, plastic bags now cost more in certain states, and many canned beverages have a recycling tax that can be redeemed at disposal.
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Bans
Instead of taxing, some states outright ban certain products. This mirrors the plastic-bag ban that occured in California, and was very succesful.
Benefits of EPR
Eco-Modulation
Eco-modulation refers to financial incentives that guide packaging decisions by rewarding environmentally friendly choices and discouraging less sustainable ones.
For instance, under an EPR policy, producers might be required to pay higher fees if they produce large quantities of black plastics, which are notoriously difficult to recycle. On the other hand, producers who use a high percentage of post-consumer recycled content could pay significantly lower fees—or even no fees at all—since the goal is to promote the use of recycled materials and support the development of end markets for these resources.
If eco-modulation can help reduce the cost difference between these choices that are better for the planet, it could significantly influence brands to make more responsible and sustainable packaging decisions.
Statewide Consistency
One of the challenges in recycling is the lack of uniformity—two households just a few miles apart can have completely different rules about what they can and can’t recycle, all depending on the Material Recovery Facility (MRF) that processes their waste. This inconsistency often leads to confusion, frustration, and a general lack of trust in the recycling system, which can ultimately discourage people from recycling altogether.
Most EPR legislation aims to address this issue by establishing a consistent, statewide list of recyclable materials. The idea is that everyone, no matter where they live within the state, will follow the same recycling guidelines. Stewardship organizations would then collaborate with and financially support MRFs to ensure they have the capacity to recycle the materials being collected, creating a more efficient and reliable recycling system overall.
Improved Labeling
EPR legislation can play a crucial role in eliminating misleading labeling practices.
Take, for example, #5 and #6 plastics, which often display the chasing arrows symbol, suggesting recyclability. In reality, very few households have access to the necessary drop-off locations for these difficult-to-recycle materials.
Similarly, PLA packaging, a type of industrially compostable plastic, frequently carries the chasing arrows symbol with a #7. Many people mistakenly interpret this as indicating the material is recyclable, leading to confusion and improper disposal.
By banning these misleading labels, EPR legislation can help ensure that consumers receive accurate information, making it easier for them to recycle correctly and reducing contamination in the recycling stream.
The current legislation isn’t without shortcoming though.
Challenges of EPR
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In a free market, it becomes obvious that brands will pass this cost off to consumers.
When advocates push for EPR legislation, they often emphasize that these laws will hold “producers” accountable for the packaging waste they generate. However, as with any fee imposed on a brand, these costs will most likely be passed down to consumers.
At EcoPackables, we fully support these types of packaging fees because they can help raise consumer awareness about the environmental impact of their product’s packaging. However, we also believe that lawmakers and advocates should be honest and upfront about the fact that consumers will ultimately bear the costs associated with EPR legislation. Transparency in this regard is crucial for maintaining trust and understanding in the push towards more sustainable practices.
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Many EPR policies fall short by not addressing carbon emissions and sometimes even encourage choices that conflict with carbon reduction goals.
A key dilemma in packaging is that while thinner, flexible plastic packaging is currently more difficult to recycle or produce with recycled content, it typically has a much lower carbon footprint compared to the paper and rigid plastic packaging it often replaces.
In some cases, the eco-modulation incentives embedded in EPR legislation may strongly discourage the use of plastic packaging without fully considering the carbon emissions associated with alternative materials.
It’s been disappointing to see the pulping and paper industry push back so strongly against EPR legislation, arguing that their high recycling rates make such regulations unnecessary.
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However, the paper industry still has a long way to go in terms of sustainability. While a 65% recycling rate is commendable, it also means that 35% of this easily recyclable material ends up in landfills, where it occupies more space and weight than plastic. Additionally, the cost of sourcing virgin paper often remains significantly lower than using recycled content, which undermines efforts to promote a circular economy. Moreover, the logging industry, which frequently harvests trees from ancient and endangered forests, contributes to further environmental degradation.
The fact that EPR legislation is so heavily focused on recycling, without adequately addressing carbon emissions and the sourcing of virgin materials, represents a significant oversight. Balancing these factors is crucial for creating truly sustainable packaging solutions.
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Perhaps the most significant limitation of EPR legislation in the U.S. is that it’s all state-specific. While this state-by-state approach is currently the only reason we’re seeing any progress, it also introduces challenges that are unlikely to be resolved anytime soon.
Although the variability between states will create significant hurdles, we’re not convinced that a federal EPR policy is the right solution—at least not yet. In many ways, it’s exciting to watch what individual states can achieve, as their successes can inform future national policies.
That said, the differences in state policies will inevitably cause complications. Similar to how brands navigate varying sales tax regulations, they’ll also need to figure out how to comply with different state-specific EPR laws and PRO fee structures. Some states may incentivize certain types of packaging that are penalized in others, creating a complex landscape for brands that sell nationwide.
Labeling requirements might also vary from state to state. In today’s market, even small brands can sell products across state lines, and many of them may not have the resources to effectively manage these challenges.
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How does this affect my packaging artwork?
While there aren’t any bans or specific legislation in place yet regarding packaging labeling for ERP, it’s important for brands to understand the general shifts and how their packaging can play a role in that
Several states have recently enacted legislation that regulates when companies can use the term "compostable" on their packaging.
Truth in labeling laws, such as California’s SBS 343 are being introduced to set clear requirements for what kind of packaging can be labeled as “compostable.” These standards will likely include guidelines on the type of supporting information needed to clarify any compostable icons used on packaging.
All EcoPackables compostable D-Films are compliant with ASTM D6400 laws are are BPI and TUV certified. Labeling is encouraged to be clear on compostables, and this legislation is primarily designed to keep loosely labeled “biodegradable” films out of the market.
By setting these standards, the goal is to ensure that consumers have accurate information about the compostability and biodegradability of packaging, helping to prevent confusion and promote more sustainable practices.
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Recyclability Labeling
California, Illinois, Maryland, and New Jersey are all advancing legislation that establishes specific criteria brands must meet before labeling their packaging as recyclable.
California's SB 343 is the most comprehensive and far-reaching of these laws and is expected to have a global impact when it goes into effect in 2025. The primary goal of these laws is to prevent packaging that contains harmful substances like PFAs from being recycled and to create strict guidelines on what materials and packaging structures can be labeled as recyclable, based on their acceptance rates across the state.
The origins of the chasing arrows symbol, invented by the fossil fuel industry, were intended to give consumers a false sense of security by implying that all packaging with this icon is recyclable. In reality, only a few types of plastic packaging—such as polyethylene, PET, and, in some states, polypropylene—are readily recyclable. While it’s a positive development that these common materials are recyclable, the issue lies with the dozens of other types of plastics and packaging made from blends of different plastics. These materials fall into the hard-to-recycle category, yet they often still display the chasing arrows symbol along with a number, adding to the confusion and misunderstanding among consumers.
These new laws aim to clear up that confusion by ensuring that only packaging truly capable of being recycled is labeled as such, thereby fostering greater transparency and trust in recycling practices.
Wrapping Up
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Navigating packaging regulations is complex, but it's crucial for staying compliant, avoiding fees and litigation, and demonstrating a commitment to sustainability.
EPR is a state-specific legislation with very aggressive deadlines. And rightfully so— tackling the packaging waste crisis requires tougher legislation. The good news is you don’t have to navigate this alone.
At EcoPackables, we simplify this process by ensuring your packaging meets all regulatory requirements at no extra cost. Whether you need to increase PCR content, minimize single-use plastics, or improve labeling, we're here to help.
If you have any questions about your packaging or how to comply with new regulations, reach out to us. Even if we’re not your packaging manufacturer, we’re happy to help!
