EPR Packaging Regulation Summary: Minnesota’s New Program | Chief legal advisor for environmental protection of the PC

Minnesota just joined the list of states with extended producer responsibility (“EPR”) packaging programs, and New York and Illinois are evaluating similar laws. Meanwhile, states with more established programs are approaching significant milestones. Now more than ever, potential manufacturers should evaluate their responsibilities in this growing and complex compliance space.

On May 21, 2024, Minnesota became the fifth state (after Maine, Oregon, Colorado and California) to implement an EPR packaging program. All programs cover packaging, but different programs also regulate a different range of materials, including paper, stationery and food items. Minnesota’s program covers packaging and paper.

These programs charge fees to producers of covered materials to subsidize the infrastructure needed to recycle the materials. Manufacturers must join a Producer Responsibility Organization (“PRO”) or, in some states, meet individual compliance criteria. The PRO is responsible for administering the program, facilitating compliance, and collecting fees. There is no individual compliance option in Minnesota.

Each state has its own (and often complex) definition of “manufacturer” of packaging materials – although in some scenarios in all programs, trademark/brand owners are liable – and in various situations, further parties in the supply chain may be liable, including the importer, distributor, licensee or manufacturer.

Minnesota distinguishes products sold in physical retail locations in the state from products sold via e-commerce – and in the case of an e-commerce sale directly to a consumer, the entity that added the shipping packaging is primarily responsible for that packaging (regardless of the position of this page in the supply chain), while the brand owner is primarily responsible for packaging if the sale took place within the country, in physical retail outlets.

A notable feature of the Minnesota program is that producers can contractually transfer responsibility for compliance to another party. Although no other state recognizes a contract as a basis for transfer of legal liability, Oregon does not require manufacturers of covered materials to register with PRO if another entity registers as a manufacturer of the same covered materials.(1)

Sales of regulated materials under each program are prohibited within the state unless the manufacturer of the regulated materials has joined the PRO (or is individually eligible) by the specified deadline (July 1, 2025 for Colorado and Oregon and January 1, 2027 for California ). In Minnesota, the ban would go into effect on January 1, 2029.

Each state has different requirements for registering with the state and/or PRO and/or joining a PRO, and Oregon is proposing a new rule that would impose pre-registration requirements. Circular Action Alliance (“CAA”), PRO for California, Colorado and possibly Oregon,(2) expects producers participating in these programs to register with PRO by July 1, 2024. In Minnesota, producers must join PRO by July 1, 2025.

Fines and penalties under each program vary, ranging up to $50,000 in civil penalties per day for each violation under the California program. In Minnesota, first violations can be fined up to $25,000 per day and third violations can be fined up to $100,000 per day.

As upcoming compliance deadlines approach, potential manufacturers should evaluate their obligations under these programs, evaluate registration requirements, and begin planning for compliance preparations.

(1) EPR Group Consulting Inc. (“EPR Group”) a multidisciplinary consulting firm affiliated with Chief legal advisor for environmental protection of the PCprovides support for all EPR packaging programs and recently provided public comments on proposed regulations in both California and Colorado, advocating for a rule that would allow manufacturers to transfer compliance responsibility by contract.

(2) Oregon hasn’t picked a PRO yet; however, CAA was the only entity to apply to serve as PRO.