AUGUSTA — Lawmakers last week heard hours of testimony relating to two bills that would overhaul the state’s recycling program and make some producers pay for the packaging they bring into the state.
“The producers of packaging bear no financial burden for the disposal of the trash they create,” said Rep. Nicole Grohoski (D-Ellsworth), presenting the bill she sponsored, LD 1541. “This system isn’t fair and it isn’t working.”
The Committee on Environment and Natural Resources heard testimony on both Grohoski’s bill, LD 1541 (“An Act to Support and Improve Municipal Recycling Programs and Save Taxpayer Money”), and LD 1471 (“An Act to Establish a Stewardship Program for Packaging”). Both bills would create programs aimed at getting producers to bear more of the financial responsibility for the end life of the packaging of their products, a concept known as “Extended Producer Responsibility” (EPR).
Although the bills are similar in nature, they differ with regard to the nature of the stewardship organization overseeing the program and the types of products that would be subject to fees. A number of environmental groups testified in favor of LD 1541, while business representatives and packaging industry lobbyists were largely in favor of LD 1471.
The Maine Department of Environmental Protection (DEP) testified against LD 1471 and neither for nor against LD 1541. Paula Clark, director of the Division of Materials Management for the DEP, testified that the bill favored by industry representatives, LD 1471, would have “no clear standards and minimal state oversight” and would largely cede management authority of the program to a stewardship organization controlled by producers, with little oversight from the state.
“The bill does not include penalties or an enforcement mechanism if a manufacturer chooses not to comply,” Clark said.
As for LD 1541, the DEP withheld its full support over concerns regarding timing and selection of a stewardship organization to manage the program, certain definitions and exemptions and reporting requirements. Clark said the department is preparing an amendment to the bill.
Some who testified on Monday wondered what the costs to consumers might be if producers decide to pass on costs through higher prices. Several speakers made reference to a recent paper put forward by a researcher at York University in Canada, which estimated that, were New York state to pass similar legislation, it would translate into between $36 and $57 extra each month in grocery costs for a family of four, an increase of between 4 and 6 percent.
Calvin Lakhan, the paper’s sole author, said in a phone call after the hearing (which he did not attend) that he used statistical modeling to arrive at the figure, which is based on data from other jurisdictions, adapted for New York.
“This is a significant limitation of this study,” he acknowledged, calling for “baseline” data to be collected in New York. Lakhan said his model attempts to build a “hypothetical” municipality that controls for as many variables as possible, including any inflationary pressures (such as increases in cost of goods due to the pandemic), in order to isolate the effect of the legislation alone.
“I would characterize it as this baseline data gathering exercise,” said Lakhan. Proprietary data on product pricing is hard to come by, he added. “I’m more than happy to rerun the numbers as better data becomes available. I want this to be a living and breathing document.”
Others disagreed with Lakhan’s methodology and conclusions, arguing that extrapolating doesn’t provide an accurate picture of what the increase in the cost of goods would be.
“In most cases it’s going to be less than a penny,” said Victor Bell, founder of Environmental Packaging International (EPI), a consultancy that advises global retailers on packaging and other issues. He declined to share specific product pricing information, which is, as Lakhan noted, typically a closely guarded secret, but said that for more complicated packaging, such as an Amazon box containing several plastic wrapped products, the increase “may be 2 or 3 cents.”
“There’s literally 30 years of history of EPR,” Bell said. “We know exactly for most items that a company pays for what those costs are.”
Bell, who listened to the hearing in Maine on Monday from his home in Rhode Island, said he felt that LD 1471, was “a good start from the industry,” but that LD 1541 “reimburses the communities for their actual collection costs.” Either way, said Bell, EPR works, at least in terms of removing the cost burden from municipalities, standardizing programs and drastically increasing recycling rates.
“We have it in every European country. We have it in Russia. We have it in South Korea. We have it in Kenya coming up. This is the way.”
Grohoski, reviewing Lakhan’s paper the next day, said in an email: “This white paper was produced by a single person, with no peer review and only one citation — of the author’s own unpublished work. It’s pure ‘garbage in, garbage out’ modeling — you take bad data and assumptions, and you get a junk result. We’re already paying the costs of managing packaging waste through our property taxes. Multinational corporations have been benefiting from this status quo for years and are now using fake math to keep us from holding them accountable.”
Other questions were raised at the hearing Monday about the definition of “producer,” and what size companies should be exempt from paying fees. “It’s one of the moving pieces here,” said Sen. Rick Bennett (R-Oxford County), a co-sponsor LD 1541. “What actually constitutes a small business?”
Right now, that threshold is $2 million or less in total gross revenue in LD 1541, which also includes an option for midsized companies that produce between 1 and 15 tons of packaging waste to pay a flat fee of no more than $500 per ton of packaging. LD 1471 did not include an exemption for small businesses, but its sponsor, Sen. Jim Dill (D-Penobscot County), said he intended to add one.
Curtis Picard, president and CEO of the Retail Association of Maine, said that either bill will affect retailers, and wondered in particular about a requirement that the product stewardship organization keep a list of producers participating (or not) in the program.
“We are significantly concerned that such a list could ever possibly be compiled,” said Picard, “which puts retailers in a very difficult position, to try to figure out which of the products they’re carrying are complying with this law or not complying with this law.”
Picard also raised concerns about the definition of “readily recyclable,” which, under LD 1541, would be determined annually, “So, a material that is on the list this year, may not be next year. This is a significant concern for producers as it can take years sometimes to change the manufacturing process.”
Several of those who testified pointed out that companies are increasingly redesigning their packaging to make it lighter weight and more recyclable.
“The change in perspective from consumer brands has been radical on this,” said Matt Prindiville, CEO of UPSTREAM, a nonprofit that works on redesigning waste systems.
“EPR at its core is about two things,” Prindiville said. “It’s really about, ‘How do we design more sustainable, more circular systems’… and it’s about fairness. Who pays for those systems?”