EPR for Packaging and Printed Materials in the U.S. Status Update and Stakeholder Perspectives Sponsored by Nestlé Waters North America
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1 EPR for Packaging and Printed Materials in the U.S. Status Update and Stakeholder Perspectives Sponsored by Nestlé Waters North America Scott Cassel, CEO and Founder The Product Stewardship Institute January 19, 2012
2 Upcoming PSI Webinars How Incentives Change Consumer Behavior Wednesday, January 25, 1:30 3:00 PM ET Exploring the Economic Growth, Environmental Protection, and Cost Savings that can be Achieved through Producer Responsibility Tuesday, January 31, 2:00 3:30 PM ET For more information and to register, please see the Product Stewardship Institute website at: 2
3 Who is the Product Stewardship Institute? Global Product Stewardship Council Scott Cassel, Founding Board Member Non-profit founded in 2000 Memberships 47 States 200+ Local governments Partnerships (75+) Companies Organizations Universities Non-US Governments Board of Directors: 7 states, 4 local agencies Multi-stakeholder product stewardship network 3
4 How to Participate Today You can connect to the Audio portion using VoIP To ask a question (verbally) via phone or VOIP please use the hand-raising function. or your telephone. To type in a question, use the Question tab. Technical Difficulties? Dial
5 Presenters Michael Washburn, Director of Sustainability, Nestlé Waters North America Scott Mouw, Chief, Community and Business Assistance, North Carolina Department of Environment and Natural Resources Rich Abramowitz, Director of Public Affairs, Waste Management Beth Schmitt, Director of Recycling, Alcoa 5
6 Containers & Packaging US EPA Municipal Solid Waste Report Containers & Packaging represents nearly a third of all municipal solid waste (up 1% from 2009) Containers & Packaging include: Aluminum and steel packaging Glass packaging Paper and paperboard packaging Plastic packaging Wood packaging Source: 2010 U.S. EPA Municipal Solid Waste Report, Facts and Figures. 6
7 Containers & Packaging Generated Breakdown by Commodity 13% Containers & Packaging Generated Breakdown by Commodity 0% 12% Glass packaging 3% 4% Aluminum packaging Steel packaging 18% Paper & Paperboard packaging Plastics packaging Wood packaging Other/Misc. packaging 50% Source: PSI compilation of data from 2010 U.S. EPA Municipal Solid Waste Report, Facts and Figures. 7
8 Percent Containers & Packaging Recycling Rates % Containers & Packaging Recycling Rates Breakdown by Commodity 69% % % 33.4% 23.1% Paper & Paperboard packaging Steel packaging Aluminum packaging Glass packaging Wood packaging 12.1% Plastics packaging Containers & Packaging overall Source: PSI compilation of data from 2010 U.S. EPA Municipal Solid Waste Report, Facts and Figures. 8
9 Total Containers and Packaging (Thousands of Tons) Containers &Packaging Generation and Recycling, ,000 Packaging Generation and Recycling, ,000 70,000 60,000 50,000 40,000 Generation Recycling 30,000 20,000 10, Year Recycling rate remains just below 50% Huge gap between generation and recovery (~40 million T disposed) Generation is increasing again due to economic recovery Source: PSI compilation of data from the 2010 U.S. EPA Municipal Solid Waste Report. 9
10 EPR for Packaging exists in Europe and Canada Europe German Packaging Ordinance passed in 1990 (first EPR for packaging in the world) European Community Directive on packaging and packaging waste issued in 1994 (effective in 1996) 30+ European countries have an EPR packaging law Canada Quebec, Ontario, Manitoba, and British Columbia* have EPR laws for packaging and printed materials CCME Canada-Wide Strategy for Sustainable Packaging * Added to provincial recycling regulation May
11 Packaging and Printed Materials in the U.S. Current Status of Related Initiatives State Legislation U.S. EPA Dialogue Packaging Association PAC NEXT Initiative AMERIPEN and Sustainable Packaging Coalition Nestle Waters North America/Future 500 Meetings 11
12 U.S. Legislative Landscape Vermont legislation 1 st packaging EPR legislation (not bottle bill) Introduced by American Beverage Association in 2010 Initially included a repeal of Vermont s bottle bill, but this was removed in 2011 language EPR FOR PACKAGING DOES NOT MEAN REPEAL OF BOTTLE BILL Various groups considering legislation in other states 12
13 U.S. EPA National Dialogue Packaging and Printed Materials Sustainable financing for managing packaging and printed materials (Sept to April 2011) 10 consumer packaged goods companies, 2 retailers, 7 state governments, 5 local governments, and 6 representatives of non-governmental organizations (including PSI) Agreement on projects to optimize existing packaging system components No agreement on ways to finance the system Final Report released December 2011 Separate meeting with commodities (Aug 2011) 13
14 PAC NEXT initiative The Packaging Association (PAC) launched PAC NEXT in summer 2011 with a mission to transition to zero packaging waste in North America 31 founding Leadership Committee members (including PSI) PSI and Owens-Illinois co-chairing EPR policy harmonization committee that promotes best practices Evaluating top EPR programs in Europe and Canada Other committees: (1) System Optimization, (2) Material Optimization, (3) Consumer Engagement, and (4) Sustainable Innovation Center of Excellence Contact: Nina Goodrich, Nina.Goodrich@gmail.com 14
15 AMERIPEN and Sustainable Packaging Coalition AMERIPEN is a North American trade organization launched in March 2011 to influence environmental packaging issues related to legislation and regulation. Focus on industry engagement and lobbying efforts 23 founding members and 15 stakeholder representatives on the Technical Advisory Committee (PSI is an affiliate member) AMERIPEN research committee also evaluating top EPR programs in Europe and Canada potential coordination with PAC Next GreenBlue, non-profit organization coordinating the Sustainable Packaging Coalition (provides technical services to brand owners) released report evaluating packaging recovery systems in Europe, Canada, and Australia 15
16 Many stakeholders needed to design and implement successful systems for packaging and printed materials Retailers Consumer Packaged Goods State and Local Governments Waste Management Companies Environmental Groups and others Key Stakeholders Commodity Associations 16
17 Nestlé Waters North America Largest bottled water company in the U.S. and Canada, with 15 unique brands, 28 facilities, and 7,500 employees Since 1976, a legacy of sustainability Billions of PET bottles produced each year 17
18 Extended Producer Responsibility 18
19 Recycling Reinvented Companies NGOs Foundations State campaigns The Future 500 Facilitating dialogue among stakeholders across the spectrum & assisting in state campaigns Creating the space for informed discussion Building coalition to support advancement of legislation PSI Haulers Local governments End markets Direct Retailers CPGs Paper industry Commodity associations Many, many others outreach 19
20 What s holding back recycling progress in the U.S.? Local government recycling programs are constrained in making additional investments in recycling infrastructure. Local governments are also not adept market actors and in many ways poor choices to operate a material supply chain. Non-residential sources of material are underserved by collection programs and services. There are critical gaps in the nation s processing infrastructure. Recycling competes against a consistently high-margin business model: landfill disposal. In general, the system needs an ongoing injection of capital to get it to the next level. 20
21 If a mechanism of capital injection can be implemented, then all elements of the recycling system will work better. Government is an unlikely (perhaps impossible) source of ongoing capital injection so where does the necessary level of system financing come from? Ideally, the source of capital and financing should be closely tied to those who stand the most to gain from an optimized recycling system. 21
22 If recycling functioned more capitalistically, ideally with externalities internalized, it would be able to leap forward. Harnessing the dynamic decision-making prowess of corporate stakeholders would drive efficiency and the formation and rational application of capital. Is government capable of making the system function capitalistically? Yes, by tasking the private sector with achievement of robust recovery goals i.e., EPR. Yes, possibly through traditional government measures that drive investment, but only if corporate stakeholders put significant political weight behind those measures. 22
23 Waste Management EPR for Packaging and Printed Materials: Status Update and Stakeholder Perspectives Richard Abramowitz January 19, 2012 Our goal: To minimize environmental impact while optimizing the value of the material that we manage.
24 CORPORATE OVERVIEW Headquartered in Houston, Texas Operations in 48 states, District of Columbia, Canada, and Puerto Rico Nearly 20 million customers 111 recycling facilities 40+ SS 34 Organics processing facilities 12 ecycling/mercury lamp/secondary processing facilities Collect about 66 million tons of waste from approximate 367 collection operations Handled close to 11 million tons last year 273 active landfills 111 LFGTE Projects-500 MW 400k homes 16 WTE plants 650k homes More than 40,000 employees
25 Perspective on EPR for Packaging and Printed Materials Principles: Unbiased Analysis - Life Cycle Analysis Environmental Gains over current system Notion of Shared Responsibility A Competitive Marketplace for waste & recycling streams Flexible options for collection & processing Strong Environmental, health & safety standards Incentives for the use of environmentally preferred products Oppose blanket anti-trust exemption for manufacturers and extensive state oversight when it is given
26 Key Questions/Issues That Need to be Answered How much gain? At what cost? - no predictive model Who says packaging recovery is stagnant? Who owns the material? Performance Goals - system and sub-systems Role of government, brand owners, service providers, etc Allocation of cost, responsibility, and control Sanctioned anti-competitive behavior who will watch What is basis for funding system? Eco-fee (visible or non-visible) Material value alone cannot be counted on Who runs the system? Displacement stranded assets, public s money
27 PSI EPR Dialogue An Alcoa Perspective 19 January,
28 What is the problem? Total Global Market ~196 billion 100% 90% 80% U.S.: 97 billion 41 billion trashed Half the world s cans are consumed in the U.S., yet 42% of them are still going into the waste system 70% 60% 50% ROW: 99 billion Cans Recycled Cans Trashed In the U.S., we have the largest market for these cans, but one of the lowest recycling rates among developed countries. 40% 30% 20% ~69% recycled The result? About 1.3 billion lbs or 575 KMT of metal with a strong market is being buried in U.S. landfills 10% 0% 1 Equivalent of 2 smelters are buried in U.S. landfills Equivalent of >27,000 Airbus A320s Sources: Aluminum Association, CMI, IAI, Alcoa Estimates 28
29 EPR Six Considerations Focus on non-deposit states Do not punish success, source reduction or higher rates Handling fees should be consistent, fair, and reflective of both source reduction and intrinsic material value Free and fair markets for material should exist at end-of-product life Clear definition of producer managed Well established scrap market for some materials must be taken into consideration Design for Quality Source separation and best practices to ensure higher quality and value that keeps recycled materials in U.S. 2-11% contamination from single stream threatens material supply, domestic jobs. Recycling targets should be clear and material specific Carrots should be followed by sticks if necessary Firm recycling rate targets should include incentives
30 Retailer Perspectives No clear, unified position Many focused currently on sustainability Wal-Mart and others Engage when legislation Would be brand owners in some cases Very important stakeholders 30
31 Questions for Presenters Michael Washburn, Director of Sustainability, Nestlé Waters North America Scott Mouw, Chief, Community and Business Assistance, North Carolina Department of Environment and Natural Resources Rich Abramowitz, Director of Public Affairs, Waste Management Beth Schmitt, Director of Recycling, Alcoa 31
32 For the Audience: 2 ways to ask questions Spoken: Use the hand-raising function on your control panel so we can unmute you. Speak through a microphone on your computer OR Be dialed-in through a telephone (and enter your Audio PIN) Written: Write your question in the Question box at any time. Please tell us to whom you are addressing your question. January 25,
33 Interested in Learning More? Contact Scott Cassel CEO and Founder Product Stewardship Institute Michael Washburn Director of Sustainability Nestlé Waters North America (203) Rich Abramowitz Director, Public Affairs Waste Management, Inc. (713) Scott Mouw Chief, Community and Business Assistance North Carolina Department of Environment and Natural Resources (919) Beth Schmitt Director of Recycling Alcoa (865)
34 Upcoming PSI Webinars How Incentives Change Consumer Behavior Wednesday, January 25, 1:30 3:00 PM ET Exploring the Economic Growth, Environmental Protection, and Cost Savings that can be Achieved through Producer Responsibility Tuesday, January 31, 2:00 3:30 PM ET For more information and to register, please see the Product Stewardship Institute website at: 34
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