EPR laws used to be reserved for specialized industries with complex waste disposal issues, such as paint, tires, electronics, batteries and mattresses. But increasing concerns over product life cycle has brought EPR to much broader industry sectors and product areas, namely textiles and apparel and product packaging. While these requirements appear to be in their infancy given the complexities of implementation, the trends in the US and abroad make clear that EPR is going to pose a significant compliance burden going forward.

What is Extended Producer Responsibility?

Extended Producer Responsibility (EPR) is an environmental policy approach that seeks to internalize financial and operational responsibility for the entire lifecycle of products, including end of life. EPR laws aim to reduce products’ environmental impacts, encouraging producers to incorporate sustainability principles into product design.

EPR programs have been implemented through legislation across the globe, including in a majority of US states. Existing and looming requirements cover a wide variety of products:

An emerging area of EPR legislation is packaging and single use plastics. It is notable not only because packaging and single use plastics are ubiquitous in the consumer economy, but also because many states we don’t think of as active in product regulations have proposed packaging EPR legislation in the past few years (Colorado, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Hampshire, New York, North Carolina, Oregon, Rhode Island, Tennessee and Washington).

Apparel and textile recycling and reuse laws, such as California’s proposed SB 707, are also emerging and notable, mainly because of the potentially Sisyphean task involved.

EPR implementation models

EPR laws follow common models. A typical approach for a variety of products, ranging from tires to batteries, is a direct take back and disposal obligation. The seller must take back the old product when a consumer buys a new one. Another common model is the “producer responsibility organization” (PRO) approach, in which responsible parties are required to form and fund a third-party organization that administers the collection and disposal of the product on behalf of its industry participants. Fees are assessed to responsible parties to fund PRO activities. Sometimes, the legislation calls for fees to be passed through to consumers.

Recent iterations of EPR legislation look to manage current product while also remediating past waste and reducing waste in the future. For example, California’s packaging EPR law requires a PRO to collect and recycle current packaging waste, fund cleanup of past packaging waste and reduce the use of new waste in the future through recycled content targets. July 1, 2024 is the first deadline for responsible parties to register with the PRO.

Legal considerations

Numerous legal issues can arise from EPR implementation. A company’s engagement with the PRO process may vary depending upon the company’s size and supply chain position. Large brands may want to drive the PRO given its impacts on them and potential reputational risk; small manufacturers may do the bare minimum to avoid excess administrative costs, even if in the end, the PRO operation is not ideal for them. For programs with established PROs, new companies likely are stuck with the existing process. PROs themselves are also potential sources of risk, as most EPR legislation calls for auditing of PROs, and the industry participants are still considered responsible for the action or inaction of the PRO.

Another key issue is assessing applicability. EPR programs often have a hierarchy for determining responsible parties, starting with the domestic manufacturer, but ultimately capturing importers and private labelers even though they do not actually manufacture the product. Compliance can be far more complicated for downstream entities, as they need to rely on their upstream partners for data and recordkeeping but may not have leverage to get it. It is crucial that manufacturing and supply agreements account for these issues, and that responsible parties implement compliance policies and procedures and pass them through their supply chains.

Finally, logistics can be a challenge. Take back and disposal laws require responsible parties to determine the bandwidth, personnel and store level management to comply. This includes ensuring disposal or recycling processes and managing EPR obligations at multiple locations.