06/19/2025

State EPR Threatens American Liberty and Commerce

Plastics News | Bruce Welt | June 17, 2025

Plastics News | Bruce Welt | June 17, 2025

Extended producer responsibility (EPR) laws are marketed as environmental solutions that make product manufacturers financially responsible for collecting, recycling, and disposing of their products after consumer use. Proponents claim these programs foster sustainable packaging design and help to build recycling infrastructure. EPR shifts the financial responsibility for post-consumer waste management from municipalities to producers.

While this may appear to align incentives for sustainable design, the practical implementation of EPR often introduces complex compliance requirements, variable state-level standards, and new administrative costs.

Rather than fostering innovation, these programs can act as indirect taxes, raising prices for consumers and creating compliance burdens that disproportionately affect small and mid-sized businesses. Moreover, the lack of harmonization across state lines complicates supply chains and undermines the efficiency of national distribution systems.

Critically, there is limited empirical evidence that EPR laws improve recycling rates or environmental outcomes. In a comprehensive review of the Recycle BC program, often cited as a model for EPR, Calvin Lakhan of York University found that few, if any, of the program's stated objectives were met. In some cases, the administrative overhead and compliance costs outweigh the environmental benefits, especially when existing recycling infrastructure remains underdeveloped or underutilized.

EPR violates federal commerce clause

While EPR laws are designed at the state level, their implications often extend far beyond state borders. One of the most pressing concerns is the potential conflict between state-specific EPR mandates and the commerce clause of the Constitution of the United States, which prohibits states from enacting legislation that unduly burdens interstate commerce.

Several challenges arise from this tension:

• Inconsistent compliance burdens: States implementing EPR laws often adopt different fee structures, reporting obligations and material standards, while also restricting which recycling technologies are deemed acceptable. For example, California regulates pyrolysis and gasification under its incineration rules, limiting their use as viable recycling technologies. This regulatory inconsistency forces companies operating nationally to maintain multiple compliance systems and discourages investment in emerging solutions that are not universally approved. The result is increased administrative complexity, higher costs and a slower pace of innovation in recycling infrastructure.
• Reducing competition due to increased barriers to enter markets: Smaller companies and new market competitors have fewer resources to manage complex EPR compliance, giving larger and more established corporations protection from competition in the marketplace.
• Restricting product availability: When the cost of compliance with EPR regulations exceeds profit margins, some companies may choose to withdraw products from certain state markets. This can reduce consumer choice and limit access to goods in states with more stringent or costly EPR frameworks.
• Fragmenting supply chains: Differing packaging requirements and definitions of recyclable materials across states complicate national distribution strategies. This fragmentation increases logistical costs and can even undermine environmental goals by requiring redundant packaging designs or transportation inefficiencies.

Taxation without representation

One of the more contentious aspects of EPR laws is how their costs are distributed across the national marketplace. While these laws are enacted at the state level, their financial implications often extend far beyond state borders.

Manufacturers typically spread the costs of EPR compliance, such as fees, reporting, and packaging redesign, across their entire customer base. As a result, consumers in non-EPR states may end up subsidizing states that have adopted EPR legislation. For example, a company selling products nationwide may increase prices uniformly to offset compliance costs in states like California, Colorado, Maine, Maryland, Minnesota and Oregon, effectively passing those costs on to consumers in states like Florida and Texas, where no such laws exist.

This dynamic raises concerns about fairness and representation. Residents of non-EPR states have no legislative influence over the policies driving these costs, yet they bear part of the financial burden. Therefore, as interpreted by critics, including the Tax Foundation, EPR represents a form of "taxation without representation," a principle that runs counter to the foundational ideals of American governance.

Additionally, EPR fees are often managed outside traditional legislative appropriations processes. In some cases, these funds are administered by third-party organizations or stewardship bodies with limited public oversight. This has led to concerns about transparency, accountability, and the potential for misuse of funds.

Options for addressing EPR overreach

As EPR legislation gains traction in several states, stakeholders in the packaging and consumer goods industries must consider how best to respond. While some industry groups have chosen to engage with states developing EPR frameworks in hopes of shaping their implementation, others argue that more assertive opposition is needed to protect economic competitiveness and regulatory fairness.

Budget-challenged, high-tax states may view EPR as a potential new source of revenue. Surprisingly, however, is the apparent support, or acquiescence, of industry stakeholders. For example, Ameripen, which describes itself as representing "the North American packaging value chain," has publicly supported EPR as a policy direction, emphasizing the importance of engaging with states pursuing EPR rather than opposing EPR. For instance, Ameripen's Executive Director Dan Fenton stated: "Suffice it to say, packaging producer responsibility has officially arrived in the U.S. and is likely here to stay."

Some industry observers have noted that while engagement with EPR frameworks may offer short-term influence, it risks legitimizing policies that could ultimately harm market competition and increase consumer costs. The Tax Foundation warns that poorly designed or fragmented EPR policies, especially those that impose non-neutral burdens or lack harmonization, could lead to counterproductive environmental and economic outcomes, including increased compliance costs and reduced efficiency.

Strategies for opposing state-based EPR legislation:

• Support organizations that promote alternatives to EPR:

Packaging industry stakeholders should critically assess whether the associations they support truly reflect their values and the long-term interests of the packaged goods sector. Rather than endorsing EPR frameworks that may impose uneven burdens, stakeholders might consider supporting organizations that aim to make EPR unnecessary by solving the recycling challenge through innovation. One such organization is the Consortium for Waste Circularity (CWC), which promotes research, education, and deployment of advanced recycling technologies such as Regenerative Robust Gasification (RRG). RRG is designed to process all plastics and organic materials from municipal solid waste (MSW) without the need for sorting or cleaning. It converts this waste into recycled-content Eco-Methanol, a versatile feedstock for producing new virgin plastics and packaging materials. The system can also handle incidental metals and complex materials, such as multilayer films, adhesives and PFAS, that are typically excluded from conventional recycling streams. Industry should be supporting technologies like RRG rather than accepting the inevitability of EPR.

• Encourage Commerce Department action:

Stakeholders should urge their state and federal representatives to request that the U.S. Department of Commerce investigate whether state-level EPR laws constitute unreasonable restraints on interstate commerce. Under the commerce clause of the U.S. Constitution (Article I, Section 8, Clause 3), Congress has the authority to regulate trade among the states and courts have interpreted this clause to prohibit state laws that unduly burden interstate commerce (Congressional Research Service, 2024). Federal guidance could help clarify the limits of state authority in this area and establish regulatory safe harbors for businesses affected by inconsistent or discriminatory EPR frameworks.

• Congressional solutions:

To ensure a level playing field across state lines, Congress could consider legislation that preempts state EPR laws that interfere with interstate commerce. A proposed "Interstate Commerce Protection Act" could prohibit discriminatory state fees on products sold across state borders. Additionally, requiring economic impact assessments for state regulations affecting multi-state businesses would promote transparency and accountability in the legislative process.

Conclusion

EPR laws, while framed as environmentally progressive, present significant challenges to the principles of fair commerce, economic efficiency and democratic accountability in the United States. As implemented at the state level, these laws often impose inconsistent and burdensome regulatory frameworks that disrupt interstate commerce, raise consumer prices and disproportionately affect small and mid-sized businesses. The lack of harmonization across jurisdictions not only fragments supply chains but also stifles innovation by discouraging the adoption of emerging recycling technologies.

Moreover, EPR laws raise fundamental concerns about fairness in cost distribution. By spreading compliance costs across national markets, these policies effectively impose financial obligations on consumers and businesses in non-EPR states, without offering them any legislative representation. This dynamic echoes the historical grievance of "taxation without representation," undermining the democratic ideals upon which the nation was founded.

Rather than accepting EPR as inevitable, stakeholders should pursue alternative strategies that promote innovation, efficiency, and environmental responsibility. Advanced technologies like Regenerative Robust Gasification (RRG) offer scalable solutions to the recycling challenge without the need for complex regulatory mandates. At the same time, federal oversight and legislative action, grounded in the commerce clause, can help ensure that state-level policies do not unfairly burden national markets or distort competition.

To preserve a unified and equitable economic landscape, it is essential that policymakers, industry leaders, and consumers critically evaluate the long-term implications of EPR and advocate for solutions that align environmental goals with constitutional and economic principles.

Bruce Welt is professor and coordinator of the Packaging Engineering Program at the University of Florida.