EPR: The Regulatory 'Hot Potato' Driving Sustainable Packaging Design

What is EPR and Why is it Essential Now?

Defining EPR

EPR is a policy approach that "shifts the financial and operational responsibility for a product's end-of-life management, like recycling, from local governments and consumers back to the producers," explains Rachel Calomeni. In the U.S., the current focus is almost entirely on packaging, including food, shipping, consumer, and transport packaging. Reference the CAA website for more details.

The Stakes: Risk and Reward

Compliance is mandatory in states with active EPR laws. The risk of non-compliance is significant, carrying fines of tens of thousands of dollars per day if you fail to comply and even the potential of having your operation shut down.

However, there is a big upside. By leveraging the associated risks of EPR, you have the opportunity to drive corporate attention and strategy towards sustainable packaging design, viewing it as a clear path to meaningful work with a clear financial ROI.

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EPR Compliance: The 4-Step Process

All states implementing EPR are currently designating the Circular Action Alliance (CAA) as the Producer Responsibility Organization (PRO). The steps for compliance generally follow this structure:

1. Get Involved: Register with the designated PRO (CAA).
2. Register with CAA: Formally register for every state where products with covered packaging are sold.
3. Reporting: Provide data on the weight, material, and volume of each material sold into that state, along with various recyclability metrics.
4. Pay Annual Fees: Fees are collected by the CAA from all producers to cover the end-of-life management costs.

Eco-Modulation: The Key Driver of Change

The core mechanism of EPR for driving sustainability is eco-modulation. This means producers pay packaging fees that reflect how sustainable their materials are.

• Fees are adjusted up or down based on factors like recyclability, recycled content, and toxicity.
• The goal is to reward better design choices, and make it more expensive to use bad materials that are hard to recycle.

“The more circular your packaging, the lower your costs over time.” - Rachel Calomeni

While eco-modulation is established in Canada and the EU, it is still just emerging in the U.S., with specific fee formulas being defined in states like Oregon and Colorado.

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The Legislative Tsunami: Where EPR is Headed

Rapid Proliferation

Currently, 20% of the U.S. population lives in states with active EPR legislation (California, Oregon, Washington, Colorado, Minnesota, and Maine). Dave Ford of the Ocean Plastics Leadership Network anticipates this number will “significantly increase” in the next few years, noting the political momentum behind the policy. He points out that "There's a lot of urgency and a lot of momentum to push additional legislation."

The Patchwork Challenge

The greatest hurdle for producers is the lack of uniformity. Ford highlights the diverse nature of early legislation:

"The first four states, California, Oregon, Colorado, and Maine, are like a watermelon, kumquat, banana, and plum. Totally different, right? And that makes it incredibly costly and incredibly difficult for producers to just keep on top of it."

This complexity creates uncertainty and forces companies to handle compliance on a state-by-state basis.

The 'Hot Potato' Lifecycle

There are three phases companies often undergo when responding to new EPR requirements:

1. EPR is a Hot Potato Phase: Responsibility is initially shirked or passed around.
2. Owner Established, Strategy Starts: Cross-functional teams (legal, finance, compliance, R&D, marketing) are built to begin strategy development.
3. State-by-State Strategy Built: Teams begin to build a state-by-state strategy, hire consultants, meet regularly, and start to indoctrinate what this new way of working looks like.

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Practical Application: Lessons from Danone

Sam Harrington, Director of Packaging Sustainability at Danone and a Board Member of the Circular Action Alliance, provides a strategic perspective on implementing EPR:

Who Owns the Responsibility for EPR Reporting?

At Danone, while the responsibility initially bounced between multiple departments, it ultimately landed with the Sustainability team.

Harrington explains that because EPR fees are modulated based on packaging sustainability, his team was uniquely suited for the task. "It became clear that my team was positioned to not just gather the data, but to do something with the data," he says.

Leveraging Regulatory Compliance for Sustainable Design

For Harrington, EPR is not just a compliance expense; it’s a packaging design tool. By linking material choices directly to the annual EPR fee, sustainability teams gain financial leverage:

"I can now tell the business not just, 'Hey, you should do this for the planet,' or but I can say, 'This design change is actually going to be financially responsible for the business, and this other change is going to cost the business more money.' That financial carrot and stick is incredibly powerful."

Harrington suggests that even large organizations benefit from working with external experts. Danone, with its thousands of product SKUs, uses a solutions provider. He notes, "It would be impossible to do that in-house without the right technology." This partnership allows his team to focus on the strategic work of packaging innovation rather than complex data management.

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EPR Universal Best Practices for Producers

Four key practices are essential for any organization working on EPR regulations, regardless of its compliance path:

1. Decide Who Owns Reporting: Establish clear ownership to avoid confusion and maximize the data's strategic use.
2. Centralize Your Data: Ensure packaging and sales data live in one reliable place that aligns with state requirements.
3. Stay Collaborative: Align product design, procurement, and marketing to ensure design choices lead to a measurable ROI.
4. Reduce Packaging Volumes: Simply put , lightweighting is still the fastest way to lower costs.

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HowGood’s EPR Reporting Solution

Given the complexity of EPR guidelines, many large brands choose to work with a solutions provider. This choice moves the focus from managing constant data collection to driving strategic design.

A comprehensive technology solution, like that offered by HowGood, is designed to solve the two biggest hurdles of EPR compliance: centralizing complex data and accurately attributing sales by state.

Key Features for Food Producers:

• Linked Material Reporting: The solution models multi-layered packaging systems (from components to pallets) and directly links packaging material and weight data to the product SKU.
• Automated Sales Apportionment: By integrating product sales volumes, the system automatically apportion[s] the sales by state population for accurate, direct reporting to the PRO. This removes the massive manual effort of tracking complex state-by-state sales data.
• Supplier Engagement: HowGood’s advanced packaging tools facilitate collecting primary, supply chain-specific data from vendors, moving beyond generic databases for higher accuracy.
• Strategic Optimization: The platform’s granular data and scenario modeling help cross-functional teams (R&D, Procurement, Sustainability) leverage eco-modulation. Teams can prioritize reduction efforts, model ingredient swaps, or redesign packaging to achieve both compliance and the lowest possible EPR fee exposure.

The rapid rise of EPR means that producers can no longer ignore the end-of-life impact of their packaging. By strategically embracing the associated reporting and eco-modulation, companies have a powerful new, financially-backed incentive to drive sustainable design change.

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