By Kayley Weeks

Maine lawmakers have passed the nation’s first extended producer responsibility law for packaging materials made out of materials such as plastic, cardboard and paper. The new law will require producers of products that are sold in Maine to pay a fee based on the type of packaging material they adopt for their products. While the law targets all types of packaging material, it is primarily meant to mitigate the impacts of plastic. 

Plastic is currently the most common material used for packaging. According to the Natural Resource Defense Council, 300 million tons of plastic are produced each year worldwide. Plastic was mass-produced for the first time after World War II.¹ Companies preferred manufacturing plastics over traditional materials due to plastics’ overall versatility and affordable cost, resulting in the “Plastic Boom.” The rapid rate of plastic production did not leave significant planning time for the proper disposal of this material. In most municipal waste processing facilities, the majority of plastics are not recyclable. 

Before Maine passed the extended producer responsibility law, municipalities were financially responsible for processing any waste created by packaging materials. Municipalities generally send their recyclable waste to a processing facility. These facilities contract brokers to sell the material on the raw material market.² It has been common practice for difficult to recycle waste to be sold and shipped to other countries that have their own waste disposal and processing laws. There is a common misconception that all recyclable waste is ethically disposed of, but hard-to-recycle waste often ends up in landfills in developing countries or unregulated dump sites resulting in harm to the people and environment. 

Extended producer responsibility creates an incentive for producers to use packaging that is more sustainable and less costly to recycle or dispose of. Without such an incentive, producers will continue to use what is of least cost to them, leaving disposal costs to fall on the shoulders of consumers and municipalities. 

In July 2017, China, the country that until then had been the primary buyer of the United States’ recycling material, banned the import of many types of foreign waste under Operation National Sword. Other bans followed. The impact of those bans reverberated throughout the world.  

Waste disposal costs increased sharply. In 2019, according to a report conducted by the Maine Department of Environmental Protection, managing waste from packaging materials cost Maine municipalities between $16 million and $17.5 million each year.³  That cost is then passed on to taxpayers.

Maine’s new law requires private companies to pay in advance to cover the cost of the disposal of accumulated packaging materials. The stewardship program achieves this by requiring producers to pay into a fund based on the amount and recyclability of their products. The collected funds will be used to reimburse municipalities for eligible recycling and waste management costs. 

Since Maine’s law was passed, Oregon and Colorado have recently implemented their own extended producer responsibility laws, meeting Canada and many European countries who have had similar programs for years. This new legislation could help to decrease property taxes throughout the state, because taxpayers will no longer be responsible for covering the cost of packaging waste disposal. But, do not expect to see an immediate change. Due to the complexity of the reform and the large number of impacted stakeholders, the law will not formally go into effect for another 18 months. Municipalities will most likely receive their first payments in 2027. 

This is an example of what economists call “internalizing the externality.” By incorporating the cost of proper disposal into their production costs, producers are incentivized to develop packaging that is less costly to properly dispose of, and consumers may be prompted to buy products that are less damaging to the environment. Incorporating the full economic costs – financial, environmental, and social – into the price of a product will lead to more responsible long term decisions. 

Plastic was first mass-produced post-World War II. Then it surged again in the 1960’s and 1970’s ¹. Consumers preferred plastics over traditional materials due to plastics’ ability to be produced in many different shapes and sizes, overall versatility, affordable cost and sanitation. These characteristics led to the rise of plastic, otherwise known as the Plastic Boom. The rapid rate of plastic production did not leave significant time to properly plan the best approach for disposing of this material. Today, plastic is the most common material used for packaging.

In the past, municipalities were required to pay for their own recycling or try to sell it on in the waste market. China, historically, has sorted waste and  reimbursed municipalities for valuable items. Now, municipalities have to pay other countries to take their waste, and the majority of that waste ends up in landfills in developing worlds, or unregulated dump sites. Not properly disposing of plastic waste is harmful to the environment. This is an unpleasant awakening to Americans due to the conjured up reality that there is a serious exportation problem. 

What exactly is producer responsibility? Producer responsibility will require that the companies that make products sold in Maine,  pay a fee per ton of packaging material that they create based on how recyclable the packaging is. The idea is that material that is easy to recycle will cost less, while harder-to-recycle materials will require a larger fee. The fees will then be reimbursed to municipalities. 

Producer responsibility creates an incentive for producers to use packaging that is more sustainable and easy to dispose of. Without any incentive, producers commonly cut corners to save money by using cheaper materials to package their products. 

Since January 2018, this practice has taken a toll on municipalities because China began to refuse to take any foriegn waste. Cities and towns have to pay more for recycling since China’s ban because there is no place for hard to recycle materials to go. 

In June 2021, Maine passed a new law requiring private companies to shell out the cost to dispose of packaging waste. Maine is the first state in the nation to pass this sort of legislation, meeting other countries around the world who have had similar programs for years. This new legislation could help to decrease property taxes throughout the state. But, do not expect to see an immediate change.

The law was originally drafted by the Maine Department of Environmental Protection in 2019, and was finally passed last summer. Due to the complexity of the reform and the large number of impacted stakeholders, the law will not formally go into effect for another 18 months. Municipalities will not catch sight of their first payments until 2027. 

Blog Post by Kayley Weeks.

¹ Rogers, Heather. “A Brief History of Plastic – The Brooklyn Rail.” The Brooklyn Rail, May 2005, https://brooklynrail.org/2005/05/express/a-brief-history-of-plastic. Accessed 24 June 2022.

^{2 US EPA. “Recycling Basics | US EPA.” US Environmental Protection Agency, 21 December 2021, https://www.epa.gov/recycle/recycling-basics. Accessed 13 July 2022.}

³ Natural Resources Council of Maine. “New Maine Law Will Shift Recycling Costs to Producers of Packaging Waste.” 13 July 2021, https://www.nrcm.org/sustainability/new-maine-law-shift-recycling-costs-to-producers-packaging-waste/. Accessed 8 July 2022.