In 2019, NEMA Members funded a Strategic Initiative to assess the opportunities and challenges presented by the Circular Economy, the transformative new model of how to design, make, and use products in the 21st century. One finding of the Initiative was that while some NEMA Members are already embracing circular business models, the level of integration varies in line with the multiform nature of the industry. It is not surprising that certain products and systems are more appropriate than others for circular solutions, but there is no doubt that incentives for greater circularity in manufacturing are growing in markets and regulatory forums worldwide.
One key area of focus—relevant to all industry sectors—is product packaging. This is not a new issue as advocates and lawmakers have long sought to compel manufacturers to achieve greater sustainability in packaging design and material selection. Even without such external pressures, however, there is a business case for devising more lightweight, environmentally friendly packaging that meets commercial standards and helps entice customers.
At the center of virtually all packaging discussions is plastics. Circular economy adherents will tell you the world is awash in plastic waste, and all measures must be on the table for reversing this trend and finding acceptable alternatives. In the U.S., states have traditionally led the way in seeking legislative solutions to this problem. The most common approach entails placing joint responsibility on both packaging manufacturers and product suppliers to find materials that meet appropriate sustainability criteria and ensure recycling systems are in place. According to the National Caucus of Environmental Legislators (NCEL), 10 states have introduced 21 bills in 2020 that address packaging waste.
Recent developments at the Federal level, however, portend even more widespread action by the states. On August 10th, U.S. Senator Tom Udall (D-NM) and Rep. Alan Lowenthal (D-CA) provided NCEL with a joint memorandum, called “Legislative Blueprints for Reducing Plastic and Packaging Pollution,” that provides a framework for states to enact Extended Producer Responsibility laws to govern plastic and packaging. This follows from Lowenthal’s introduction in February of the Break Free from Pollution Act of 2020 (HR5845), one of six Federal bills on this topic to appear in the 116th Congress. HR5845 would “make certain producers of products (e.g., packaging, paper, single-use products, beverage containers, or food service products) fiscally responsible for collecting, managing, and recycling or composting the products after consumer use.”
These developments suggest that packaging could serve as the proverbial foot in the door for companies that have not yet explored the value proposition of circular business models. The issue is here to stay, and finding the best plan of action for your company generally offers better prospects than waiting for solutions to be imposed by policymakers. Contact Mark Kohorst of NEMA Government Relations for more information.