Okay, let’s move on. Let’s go to a truly committed conservationist, Jane Goodall, who said, “Only if we understand, can we care.” And, “Only if we care can we help.” She has it right, and I happen to think that EPR is necessary to help us correct the dilemma we find ourselves in: a contaminated, dirty, polluted, undisciplined worldly environment. EPR, what is it? Can it help? Is it financially viable?
This column looks at Extended Producer Responsibility (EPR) to determine if it fits in our industry. Think about this: If I make it, I am responsible for its end of life. The manufacturer is responsible for an environmentally compliant end of life. Labelstock, matrix, release liner waste, flexible packaging by product, none of this will exist. No more landfill for non-recyclable by-product. Wow, can you believe it! 3M, Avery Dennison, Loparex, Mondi, the folks who created this waste, they’re responsible and must provide a solution. Wow! I love it. Call these companies and they will “take away my waste.” Count me in!
Hold it, not so quickly. What in the world will these companies do? How will they solve this problem? Is EPR the solution? Hmmm, let’s look at EPR and see if it is the right answer to non-recyclable by-product generated in the packaging industry.
The idea of EPR is that the producer of a product – a car, lawn mower, washing machine, label substrate or tape – is responsible for the life of the product. Indeed, the idea of EPR supports the concept of a circular economy, the latest environmental buzzword. Extended Producer Responsibility is a form of product stewardship. Manufacturers and brand owners are responsible for the products they make or sell from start to finish.
Frankly, EPR really means two things: Number one, the responsibility for disposal is shifted upstream to the producer, and number two, the concept of EPR forces the manufacturer to make the design of their products more environmentally-friendly. Without a doubt, Lester Brown was one of the early advocates of EPR, except he took it one step further. Lester wanted to shift the “lifetime” extended cost of a product to its manufacturer. In the case of tobacco and cigarettes, the manufacturer would have the extended cost of health care, due to lung cancer caused by smoking. The only way the tobacco company could survive would be to raise the price of cigarettes. Ultimately, smokers would be paying so much for a cigarette, they’d stop. Voila, problem solved. In fact, that is exactly what is happening in the Western Hemisphere. The cost of cigarettes has gone through the roof (not so in less developed countries).
To be fair, the concept of EPR doesn’t go quite so far. If this were the case, look at what would happen to the automobile industry: A speedy car crashes and the driver is hurt and rushed to the hospital. The Lester Brown concept means the car manufacturer is responsible for all the costs for the hospitalized driver. No, the EPR concept doesn’t go that far. However, what is fascinating, at least to me, is that the automobile industry already practices EPR and it works. Think about it: If you want to buy a new car, you trade your old one in. The trade-in not only gets you cash toward a new car but also allows you to dispose of your old car in an environmentally compliant manner. What then happens to your old car? It is either refurbished for resale or sold for “recycling.” Here’s the point: EPR exists in the automobile industry and has for years. We no longer have unused, rusting, unfriendly cars sitting around dripping oil and creating an ungodly environmental mess. EPR works in the automobile industry.
EPR also exists with other small consumer items like lawn mowers and snow blowers. This past October, I traded in my 15-year-old snow blower for a modern, state-of-the-art model. I asked the dealer what he would do with the old machine. He explained, “I’ll salvage some of the parts, drain the oil/gas and whatever remains will be picked up by the recycler.” This is EPR at its best! Extended Producer Responsibility is a practice in which producers take responsibility for the management of the disposal of products they produce, once the products are no longer useful. Responsibility may be fiscal or physical or a combination of both. The underlying concept is that products will be designed for useful end of life.
EPR for the packaging industry is more complicated than the end of life for big ticket items like cars, refrigerators, lawn mowers and the like. Think of the supply chain of a pressure sensitive label: forest/oil field, to pulp/refinery, to paper/film, to lamination with glue, to printing, to application on a package, to distribution, and, finally, to the consumer who takes it home and consumes the product and throws the package away. Who has the ultimate responsibility? In my view, each part of the chain has to be involved in a responsible solution. This includes the consumer, where accurate, correct, education is an absolute necessity. I believe that we have failed to create a proper environment in this regard, and hold us all accountable. Education begins with kids in school. We need to teach proper disposal of packaging. In fact, I shared a presentation a number of years ago at a high school with Cindy White, president and CEO of Channeled Resources. Our takeaway: even the teacher of this class on environmental studies was ignorant of solutions for the disposal of non-renewable packaging. The message here is that we have done a poor job explaining what we can do to make a better contribution to reducing waste.
To be sure, major brand owners are concerned about packaging waste, in particular, single use packaging like detergent, shampoo and bath gel packages. Alan Jope, Unilever chief executive, said at a recent conference, “I sometimes wonder if it’s a fair accusation that we’re in the branded litter business.” Simon Lowden, president of PepsiCo’s global snack business, commented, “From a philosophical point of view, we have got to lean in and learn about this stuff.” He confirmed, “People talk about recyclability and reuse and say they’d like to be involved in helping the environment, so let’s see if it’s true.” He was referring to reducing single service plastic waste. These two companies, along with Nestle SA, Proctor & Gamble and 25 others, have bought into a novel kind of EPR proposed by recycling company TerraCycle. The idea is to sell products in glass, steel and other containers that are designed to be returned, cleaned, refilled and reused. Novel, right? Remember the milk bottle, the original Coke and beer bottles? All of these were returnable. A lot of us grew up in that culture. Packaging in those days was compliant with the general guidelines of EPR: make it and take care of it during its useful life. Tom Szaky, CFO of TerraCycle, said of his Loop program, “Recycling is not the answer to garbage. The real problem is how do we solve waste and the root cause of waste is disposability.” The Loop project will start in several pilot cities with several of the 25 brand owners participating with a select group of shoppers.
Shoppers whom the companies selected for the trial will be able to order hundreds of products – including Nestle’s Haagen Dazs ice cream and Clorox Co’s wet wipes – from a website for home delivery. Products arrive in a reusable tote. Once finished, users schedule a pickup for empty containers to be cleaned and refilled. They can sign up for a subscription-based service that replenishes products once empty containers are returned. TerraCycle will handle delivery, returns and cleaning.
The products will cost roughly the same as the versions in single-use containers but users will also have to pay a deposit of $1 - $10 per container. Shipping charges start at roughly $20, decreasing with every item added.
According to Unilever, a refillable steel container for its Axe and Dove stick deodorant will last eight years, or long enough to prevent the disposal of as many as 100 traditional deodorant packages.
EPR starts to get a little fuzzy when you think about TerraCycle’s Loop. I, for one, don’t want to have a deodorant stick for eight years. Nor do I want additional containers packaged in totes. Where would I put all this stuff? What about the additional carbon footprint generated by pick-up and delivery? Loop is interesting, and we’ll wait and see if it is practical and economically viable. I’m taking a wait-and-see approach for the time being.
My own view is that the only way EPR makes sense to our industry is to compartmentalize the supply chain into sections, creating solutions along the way. For example, we know matrix can be diverted into energy. We know that spent liner can be recycled. In this case, the OEM, the laminator, becomes responsible for the matrix and the converter, the printer, becomes responsible for the liner. The brand owner is absolved from these two but definitely has the ultimate responsibility for proper disposal for the package that was sold to the consumer. EPR can work but must be practical. And, educating the consumer on proper package disposal is critical.
Another Letter from the Earth.
Calvin Frost is chairman of Channeled Resources Group, headquartered in Chicago, the parent company of Maratech International and GMC Coating. His email address is email@example.com.