As Maine communities deal with the collapse of global recycling markets, lawmakers are drafting a first-in-the-nation bill to shift the cost of disposing of packaging material from consumers to the companies that produce it.

Members of the Environment and Natural Resources Committee on Wednesday received a briefing on similar programs – called extended producer responsibility, or EPR – in Europe and North America.

A draft bill to establish a state program is pending, but in bare terms it would function like this: The packaging material producers would establish a third-party organization that would pay fees to municipalities based on the type, amount and design of their packaging.

If municipalities dispose of readily recyclable materials, then producers would repay their costs. The fees could otherwise be spent on outreach, education and infrastructure.

But if the materials are not easily recyclable, than producers would pay higher fees to cover disposal costs in landfills or incinerators. The program would cover household items such as cardboard boxes, plastic jugs, wrappings and more, but not printing paper or cans and bottles, which are covered under the state’s bottle deposit law.

A bill may be ready for debate by February, but it likely would take at least two years to get the system up and running if it becomes law, said Sarah Nichols, sustainable Maine director at the Natural Resources Council of Maine.

Companies are unlikely to redesign packaging just to service Maine’s small market, but other states could follow its lead, Nichols said. Maine was a pioneer in other product stewardship programs for e-waste, paint and returnable beverage bottles.

“I’d say there is zero risk of producers not fulfilling statutory obligations,” she said. “I’m confident that Maine is going to lead the way on this like we have on other programs.”

It costs Maine taxpayers about $17 million a year to dispose of packaging, according to the Maine Department of Environmental Protection.

A state EPR program also could help meet Maine’s three-decade goal of recycling half its household waste. Since 2013, the state’s recycling rate has been stalled at roughly 40 percent.

Programs in dozens of countries increased recycling rates and pushed manufacturers to design easily recyclable materials, according to an environmental consultant who spoke at Wednesday’s briefing.

Victor Bell, the U.S. managing director of environmental compliance for Environmental Packaging International/Lorax Compliance, told the lawmakers that producer responsibility can insulate taxpayers from price fluctuations in recycled commodities, but is also encouraged by big companies with sustainability goals such as the New Plastics Economy initiative, which seeks to eliminate problematic or unnecessary plastic packaging.

“Most of the brand owners – Proctor and Gamble, SC Johnson – are all members of these organizations that say, ‘Hey, we want to do something about this, and it has to start someplace,” he said.

In the U.S., that starting place might be Maine. Last year, the Legislature directed the Maine Department of Environmental Protection to draft a bill requiring producers to pay at least 80 percent of disposal costs for materials that are not easily recyclable.

The proposal was prompted in part by the collapse of the U.S. recycling market following Chinese import restrictions on low-value materials three years ago. Towns and cities used to receiving thousands of dollars a year for commodities such as used paper wound up paying to have them taken away. In response, some communities curbed recycling programs to cut costs.

Countries with longstanding EPR programs have complicated fee structures that charge rates based on how easily materials can be recycled. For example, this year France will shift from a single charge for all plastics to different rates for seven plastics categories, Bell told the committee.

Some programs penalize companies for disruptive packaging and give bonuses for improvements or high recycled content, providing an incentive for industry to make less wasteful products.

“What the fees have done, is that (they have) proven to change the packaging,” Bell said.

Five Canadian provinces have EPR programs that range in cost from about $5.36 per person annually in Saskatchewan to almost $23 per person annually in Manitoba. The five provinces have recyclables recovery rates of 60 percent to 78 percent.

EPR programs also can help balance the U.S. recycling market, said Resa Dimino, a senior consultant with RRS, a global waste management group. Market prices for recyclable materials have plummeted in two years, with mixed paper dropping by 98 percent and polyurethane dropping by 97 percent.

That puts municipalities in a bind – citizens still want recycling programs, but low prices and expensive, outdated processing machinery and transportation make them expensive for taxpayers.

At the same time, big producers such as PepsiCo, Walmart and Unilever are scrambling to find enough easily recyclable material to put into products and meet sustainability goals, Dimino said.

One of the current system’s major flaws is there is no uniform entity overseeing the whole system, she added.

“One of the real advantages of EPR is that it provides system integration,” Dimino said. “You have someone looking out for the health of the entire stream.”

Lawmakers on the committee sounded optimistic about the promise of EPR during the three-hour briefing. A number raised questions about how it would be implemented with diverse municipal recycling programs, whether it would reduce property taxes and if Maine was big enough to drive real change in the U.S. packaging market.

Even if the state is small, bigger states – including California and New York – are right behind it, Bell said.

“I have never seen in my 30 years of these programs so much energy in these types of programs in the United States right now,” he said.

Lawmakers also are debating whether to expand Maine’s existing product stewardship laws to additional products and industries – most notably, tobacco companies.

Rep. Lydia Blume, D-York, has proposed exploring ways to clean up and potentially recycle all of the cigarette butts littering Maine’s roadways, sidewalks and public spaces. Ideas floated so far include everything from requiring cigarette manufacturers to provide free “portable ashtrays” at retail establishments to requiring manufacturers to pay the cost of collecting and recycling cigarette butts through a product stewardship program.

But one of the major cigarette makers, R.J. Reynolds Tobacco Co., warned the committee against taking such steps.

“An Extended Producer Responsibility (ESR) program for cigarette filters is neither feasible nor necessary,” reads the letter from a representative of RAI Services, which handles regulatory issues for R.J. Reynolds. “Cigarette butt recycling is not yet commercially viable on a local, much less state or national scale. The infrastructure for such a program is not in place, and certainly not at a scale that would justify the costs or the attendant environmental benefits. The fact of the matter is that landfills and incineration are entirely appropriate disposal methods for cigarette butts.”

On Wednesday, members of the Environment and Natural Resources Committee tabled the proposal for additional discussion.

Staff Writer Kevin Miller contributed to this report.

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