By Saabira Chaudhuri 

Who should pay to recycle discarded cereal boxes, drinks bottles and detergent containers?

The makers of such products have long fought efforts to make them pay for the cost of dealing with packaging waste. Now, trade groups that represent companies like Procter & Gamble Co. and PepsiCo Inc. are softening that stance, as consumers become more concerned about plastic waste and municipalities struggle to cover the costs of their recycling programs.

Federal and state lawmakers in the U.S. are proposing bills to push companies to pick up the tab for managing empty soda bottles, candy wrappers, cereal boxes and other packaging they use. Such rules could help pay for curbside collection and sorting infrastructure, and spur companies to design packaging that is easier to recycle, lawmakers say.

Charging companies "puts the financial burden of plastic pollution back on the manufacturers who generate it and profit from it," said Sen. Tom Udall (D., N.M.), who this year introduced a bill that would make companies pay to collect and process waste. Several states including Massachusetts, New York and Washington are considering similar measures.

Packaging has become more complex of late, often being a mix of materials such as aluminum layered with different plastics to make baby and pet-food pouches. Most recycling facilities can't handle these. Also, a 2018 ban on waste imports by China, historically the biggest buyer of used plastic from the U.S., created a glut of recyclables with nowhere to go. Ninety two recycling programs have been eliminated in the U.S. since late 2017, according to the Recycling Partnership, a nonprofit.

Covid-19 has exacerbated the problem. Single-use plastic volumes have jumped just as cities and towns face budget shortfalls, and recycling streams are more contaminated as household waste displaces the cleaner material that typically comes from offices and businesses. U.S. residential recycling programs are collecting at least 7% more waste than last year, according to the Solid Waste Association of North America.

Against that backdrop -- and the threat of potential bans on some plastic packaging -- consumer-goods industry groups say they are more willing to help pay for recycling services that they have long argued were the responsibility of governments.

"We will actively support policy proposals that require industry funding, " said Dan Felton, executive director of Ameripen, a lobby group set up by companies including Coca-Cola Co. and Colgate-Palmolive Co. about a decade ago in the face of a mounting wave of legislation aimed at cutting plastic waste.

The Consumer Brands Association also says it would support per-item fees on packaging provided the money is used to improve recycling. The trade body, whose members include P&G, Pepsi and General Mills Inc., had previously questioned the merits of such policies.

"We recognize these systems in America have been chronically underfunded for a decade or more and can't handle the types of packaging in use today," said Meghan Stasz, the association's head of packaging.

Mars Inc. and Unilever PLC are among companies that have said they would support so-called extended producer responsibility rules as part of their broader efforts to reduce plastic waste and use more recycled material in their packaging.

Brand owners have long paid toward the cost of managing their packaging waste in parts of Canada and Europe, and more recently have done so in big emerging markets like India. Companies either pay for packaging recycling programs through umbrella organizations or reimburse municipalities directly. Fees are based on the weight of packaging sold, but also account for the cost of recycling items and the resale value of materials.

In the U.S., manufacturers pay toward waste management for just a handful of items, such as paint, batteries and mattresses.

Advocates say such measures boost recycling rates. In Germany, where companies have had to pay toward managing packaging waste since the early '90s, the recycling rate for municipal solid waste stood at 67% in 2018, according to government data. By contrast, the U.S. rate is 25% based on 2017 data -- the latest available -- from the Environmental Protection Agency.

Scott Cassel heads the Product Stewardship Institute, a nonprofit that lobbies for companies to cover waste-management costs. He says for the first time he has had "very productive discussions" with the flexible-packaging industry about a potential model bill for states.

In June, a House climate-change panel called on Congress to adopt extended producer responsibility among other policies with the aim of making the U.S. carbon-neutral by 2050.

But governments, waste companies and brand owners can't agree on how much the product makers should pay and how such rules would work in practice.

A proposed bill in Maine that called on companies to help pay for managing packaging waste could have cost brand owners between $14 million and $16 million a year, according to the state's environment department. The bill failed this year but is expected to be reintroduced in 2021.

The Udall bill, introduced to Congress in February, proposes that companies bear the entire cost of handling their used packaging. It also asks them to design and run programs to collect and process the waste. Mr. Cassel says most states he is advising on the matter want brand owners to pick up the entire tab.

By contrast, the Recycling Partnership, a nonprofit funded by companies including Nestle SA and Target Corp., argues for shared costs between brand owners and taxpayers. Under its proposal, taxpayers' contribution would be bolstered by payments from commercial and industrial waste generators.

The Consumer Brands Association also says brand owners shouldn't be saddled with the entire cost of dealing with their waste.

"We do not want a scenario where any one industry or stakeholder bears all financial or operational responsibility," said Ms. Stasz. "Everybody has a role to play here."

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

 

(END) Dow Jones Newswires

December 05, 2020 08:14 ET (13:14 GMT)

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