Extended Producer Responsibility (EPR) Legislation to Receive Renewed Consideration in California

Senate Bill 54 establishes requirements for plastics packaging reduction, alongside framework for future recycling program funding and requirements for a number of packaging formats 
 Last week, an amended version of California Senate Bill 54, was released by bill sponsor Sen. Ben Allen. The legislation, passed by the Senate in January of this year, would create a broad-based EPR packaging and printed paper recycling and recovery program. While the legislation is unique in terms of requiring a 25% reduction in single-use plastic packaging use by 2032, it contains many other elements in considered and approved state-focused EPR legislation, seen over the past two years. It establishes a Producer Responsibility Organization (PRO), which will oversee packaging-based fee structures for brands, and have responsibility for implementing an outside needs assessment for municipalities. The legislation also requires all covered packaging be recyclable, compostable or reusable in outlying years. A significant portion of funding collected from the brands would be directed to both expand and improve recycling programs and connected facilities across the state. The amended language (below) includes a specific reference to label and similar elements (inks, adhesives) that may be detrimental to the recovery or recycling of covered packaging.  (2) If recycling or composting of the covered material is made more difficult by the incorporation of specific elements, including, but not limited to, inks, labels, and adhesives that may be detrimental to recycling or composting according to the Association of Plastic Recyclers design guide or other relevant industry association, or other criteria established by the department, the fee for that covered material shall be sufficient to account for the increased cost to manage that covered material. The PRO is directed in the bill to adjust costs upwards for brands using labels and elements deemed detrimental to recycling. That cost is currently unknown, and will be developed during the regulatory process should the legislation pass. Outside of bottle bill/deposit beverage containers and limited specialty product categories, nearly all consumer facing packaging is covered. There is no prohibition on label use in the legislation. Other references to labeling are connected to what future waste characterization studies will determine what packaging may be labeled as either recyclable, compostable, and similar environmental claims. Next Steps Timing remains tight for the bill to complete the legislative process prior to session adjournment. If it does succeed, sponsors may seek removal of a scheduled November plastics packaging fee-focused ballot initiative. SB 54 will likely be heard in the Assembly Committee on Natural Resources next week, but has not yet been added to the agenda.

China’s National Sword Program prompts big changes in US plastics recycling efforts

The Association of Plastic Recyclers Conference
March 11-13, 2019

The Association of Plastic Recyclers has grown to include most large brands and retailers. It has also expanded globally to harmonize with other recycling associations so that the influence of this organization cannot be overstated.

There were some clear indications at the conference that the plastic packaging industry is changing and it is being driven by not only the APR, but also key brands and retailers that are changing the way they are thinking about plastic packaging. The change in the plastic packaging industry is primarily the result of China’s National Sword Program, which has caused the biggest economic downturn to the recycling industry in its 50 year history. The focus of many presentations at the conference was to build domestic recycling infrastructure and solidarity, rather than depend on export opportunities. What does this mean for the label industry? With the many expanding commitment programs, expect to have customers ask for assurance that the labels (inks, adhesives, facestocks) that are being used on plastic packaging, primarily PET packaging, do not hinder the recyclability of that container. In short – it’s time for everyone in the label industry to become familiar with the APR Design Guide for PET Recycling.

In opening comments, APR expressed a clear concern about the many articles published on the idea that “recycling is dead.” As the only association focused one hundred percent on plastic recycling, APR has initiated an aggressive pro-recycling campaign with an influx of opinion and editorial pieces in mainstream media (not just industry publications) about to begin. The issue is not recycling, according to APR, the issue is collecting and sorting materials. APR also wants to push back on the negative connotation of single-use packaging by driving the idea that “it’s not single use if it’s recovered.”

PCR Demand: The monetization of the recycling industry comes from the market and demand for materials and products with post-consumer recycled (PCR) content will improve the economy of recycling. That’s why APR has a Demand Champions Program whereby member companies can commit to using a certain percentage of recycled content in products. UPM Raflatac and Avery Dennison are two TLMI member companies that have made such commitments and are part of APR’s Demand Champions program. They types of products they are adding PCR to are not listed, so be sure to ask if you’re interested in label products with PCR. Many brands have also made a commitment. Read all about it here.

Walmart’s New Project: Ashley C. Hall, Walmart Sustainability, reported on Walmart’s Project Gigaton in which they are working with suppliers and vendors to reduce one billion metric tons of greenhouse gas emissions by 2030. Key strategies to do this are:

· Use 20% PCR content in plastic packaging, make the package 100% recyclable, reusable, or industrially compostable by 2025. 100% of the packaging will be labeled for the customer using the How2Recycle Label.
· This impacts the label industry – Walmart acknowledged that labels and adhesives are considered negative impacts on their private label products. They want labels on Walmart private brands to be verified as not detrimental to recycling by using the APR Design Guide.
· Walmart has published a Sustainable Packaging Playbook with all the guidelines for their suppliers and ways they want you to take action now. If Walmart is your customer, expect to see this referenced in discussions.

P&G’s Alliance to End Plastic Waste: Steve Sikra, Materials Science Engineer, explained the recent launch of P&G’s new efforts to address the fundamental need for infrastructure investment across the entire packaging value chain.

· The Alliance to End Plastic Waste launched January 2019 and will be investing $1.5 B over the next five years to improve recycling infrastructure, innovation, education, and cleanup… globally.
· Members of the Alliance commit to two parts: In Part A, members commit to $500M in grants to help accelerate and incubate projects. In Part B, members commit to directing $1B of funds to investments that will impact someone outside of members’ companies.
· Current members of the Alliance can be found here.
· P&G says they will utilize the EPA’s waste hierarchy as guiding principles to make tough choices. He noted that litter is not on the EPA waste hierarchy.
· P&G will focus on package design, increasing access to recycling collection, inspiring consumer participation, and the demand side of the equation to increase markets for PCR content. This is how it becomes circular. The goal is to transform what was waste into valuable raw material. P&G is also a supporter of the New Plastics Economy.

American Chemistry Council: ACC is the trade association for chemical companies. Craig Cookson, Director of Sustainability and Recycling, focused on ACC’s collaboration with the Association of Plastic Recyclers by rolling out some aggressive goals to increase plastic recycling.

· 3.4% of global oil goes into plastics. There is a 14.6% recycling rate for plastic packaging and 70% is going to landfill.
· ACC’s 2040 goal is that 100% of plastic packaging is reused, recycled, or recovered.
· ACC’s interim goal is 100% of plastic packaging is recyclable or recoverable by 2030.
· They have 7 initiatives to achieve their commitments
o Define, inventory, and target key plastic products
o Design packaging that enables recovery
o Create circular business models
o Invest in recycling access and infrastructure
o Catalyze new technology and programs
o Educate consumers and change behavior
o Expand stakeholder partnerships
· This will impact the label industry as part of the packaging value chain. ACC will encourage the use of labels that meet the APR Design Guide, referenced previously.

More Recycling: A research and consulting firm focused on the plastic recycling industry, CEO Nina Butler provided some interesting insights and trends:

· With the warnings about plastics and packaging, the only response is to stimulate circularity and recycling.
· Due to low virgin resin prices, a major decrease in recycling collections, if we are to increase the demand for PCR, brands will need quality PCR. This means avoiding contamination from labels, adhesives, improper closures, metallics.
· Nina wrote an excellent article on what she identifies as the plastic paradox: plastics have a much lower energy footprint than alternatives to plastic, yet plastic is becoming socially unacceptable. We need to go about changing this perception with facts.

The Print and Packaging Legislative Summit

The multiple trade associations that partnered last year to host the Print & Packaging Legislative Summit have decided that, in order to produce a successful cross-industry event, the Summit will be held every other year. The next one will be in 2020.

In the “off year,” each association is free to handle a “fly in” individually. For instance, PIA has a Board-approved 2019 Key Initiative to facilitate Congressional plant tours. PIA has targeted August/September as key months for bringing lawmakers into member company plants. The purpose is to make a grassroots connection at the local level and then to advance that connection the following year by visiting the Congress on Capitol Hill. The intent is to create a continuous loop of in-state/in-district meetings and DC visits to grow grassroots relationships. This alternate year plan also acknowledges the time, labor, and financial resources it takes from associations and member companies to execute high-quality Capitol Hill fly-ins on a yearly basis.

Because there are so many new House members (almost a quarter of the House is new), the Print & Packaging “Summit Gang” is organizing an association leadership “industry orientation briefing” for House offices. The date is tentatively set for May 15 (arriving on 14th) and, so far, the following associations have committed to inviting their respective CEOs, Board Chairs, and Government Affairs Chairs to participate in a one-day meeting that would consist of a House staff orientation to the industry. The orientation would include topics on diversity, sustainability, and relevancy plus combined key policy priorities. There will also be a couple of group meetings in the Senate.

TLMI Provides More Guidance on PROP 65

PROP 65 Deadline Takes Effect in California – No Delay Granted

As TLMI has reported on several times this year, California’s revised PROP 65 regulations went into effect yesterday. If your company has received inquiries from suppliers or customers asking you to certify compliance with the new regulations, TLMI has provided the below outline on steps to take. In most instances, they want to understand if your label (or other product) includes one of the covered chemicals, and may be subject to the regulation. We encourage you to first read the overall backgrounder developed by the state, for an understanding of the compliance program.

Step 1: Identification of PROP 65 Chemicals
A warning requirement for a PROP 65 listed chemicals is not automatically triggered. Many of the chemicals have listed safe harbor level listed. To begin, TLMI recommends member companies review the most current list of PROP 65 chemicals, to identify whether or not their product contains a listed chemical.

Step 2: Review Exposure Limit Levels for Chemicals
California has set exposure limits for some of the chemicals listed. If the exposure is low enough to pose no significant risk of cancer or is significantly below levels observed to cause birth defects or other reproductive harm, then compliance is not required.

TLMI recommends erring on the side of caution – if you do not know the presence level of a PROP 65 chemical, we suggest treating it as a covered chemical, and working to comply with your supplier and or customers.

Step 3: Understanding Responsibility for Providing the Warning
For labels impacted by the regulation (and attached to a consumer product), the distributor or manufacturer importing the product must provide the warning to the retailer. If your company is receiving letters or inquiries from customers, it is because they want to know if warnings are required for their products.

The written notice to the retailer must state that a PROP 65 warning is required and include the name, description or identifying information for the product, as well as necessary warning materials.

Just as important, the brick and mortar outlet must also provide to the manufacturer, or other entity importing covered products notification that they have received the PROP 65 warning, and all necessary safe harbor materials.

Step 4: PROP 65 Warning Label Overview

Most consumer products goods (CPGs) companies, will likely not print PROP 65 warnings on impacted products (even though that is an option). The majority will update safe harbor warnings and provide businesses that sell their products information required to be in compliance.

For companies choosing not to use on-package labeling, there must be a product-specific warning provided on posted sign, shelf tag, or shelf sign at each point of display. It may also be provided via any electronic device or process that automatically provides the warning to the purchaser, prior to or during purchase.

California Legislators Consider Labeling Requirements Across Industries

California legislators are considering legislation that would require labeling by CPGs.

Senate Bill 258, authored by Senator Lara would require cleaning products carry labels listing all ingredients, along with a pictogram illustrating potential health effects. This bill has passed the Senate, and is awaiting further consideration in its Assembly committee assignment.

Assembly Bill 1575, introduced by Assemblyman Kalra, would require beauty salons to label cosmetics used on customers in-store. A similar requirement is already in place for those sold at grocery and other retail outlets. This bill has passed through the Assembly, and is awaiting further action in the Senate. The California legislature adjourns for their summer recess on July 21st.

California Agency Issues Revised Q&A for PROP 65 Warnings

California’s Office of Environmental Health Hazard Assessment (OEHHA) recently posted a question and answer document regarding warning requirements that will apply to businesses beginning August 30, 2018.

OEHHA’s new regulations place primary responsibility for providing warnings on product manufacturers, producers, packagers, importers, suppliers or distributors.

Specifically, suppliers of ingredients that contain a listed PROP 65 chemical would only have responsibility for a consumer warning if it has knowledge that the end use of the component part or ingredient will expose a consumer to the listed chemical at a level that requires a warning.

Consumer products manufactured prior to August 30, 2018, and labeled with a warning that is compliant with the September 2008 version of the regulations will be considered in compliance with the 2018 regulations. Additional PROP 65 guidance information will be provided by OEHHA prior to the 2018 compliance deadline.

USDA Moves Cautiously on GMO Labeling Compliance

Two weeks ago, the USDA provided a list of 30 questions for stakeholder input, as they begin to craft the language and parameters for GMO labeling, as required by Congress. The USDA is seeking guidance on symbols, how multi-ingredient food products would be treated, and viability of “digital/electronic disclosure” on food packages.

The agency intends to issue a proposed draft rule later this fall, which would outline GMO label wording and package placement, among other elements. They have not yet delayed the July 2018 GMO labeling requirement for manufacturers.

FDA Officially Delays Nutrition Labeling Requirements

Late last month, the FDA indefinitely delayed forthcoming nutrition labeling requirements for individual food and beverage packaging. As previously reported, companies with sales of over $10 million annually would have been required to comply with the new regulations in August of 2018. The FDA stated that additional time is needed for industry to develop and procure printing associated with the new labels. Several large consumer product goods (CPGs) companies had also requested additional time to comply.

It’s anticipated that a new timeline and compliance schedule will be printed in the Federal Register later this year. The updated nutrition panel was the most significant food and beverage labeling requirement to come out of the FDA during the Obama Administration.

SpectraGraphics Inc. Adds Second Mark Andy P5

We are happy to announce that we are adding another Mark Andy press to our equipment line up.  The new unit adds much needed wider web capacity, up to 8 color UV/Water ink combinations with even more expanded content labeling options.  We have been amazed at the efficiency and printing quality these newer servo driven presses provide.

This press should come online in early to mid August.  Contact our exceptional customer service or sales teams to find out more about what this new unit could do for your business!

SpectraGraphics Inc. P5

FDA Finalizes Significant Changes to Nutrition Panel for Food and Beverages

On Friday the FDA announced updated nutritional panel information for the majority of food and beverages sold in the US. The  final requirements are a result of feedback and analysis of agency research, industry input and available scientific data. Virtually all food and beverage packaging will need to adjust their current labels as a result of the final rule.
Major changes to the current label include:
  • Highlighting “Calories,” “servings per container,” and the “Serving size” declarations by increasing the type size and placing the number of calories and the “Serving size” declaration in bold type.
  • Requiring manufacturers to declare the actual amount, in addition to percent Daily Value, of mandatory vitamins and minerals.
  • Addition of any “Added Sugars” directly beneath the listing for “Total Sugars”
  • Changing the footnote to better explain the percent Daily Value.
The new label, as provided by the FDA, is below:

 

Opponents of the new requirements believe the new label directly contradicts the FY 2016 Consolidated Appropriations Act (under which the FDA received its 2016 funding). A section of that Act prohibited the FDA from using data from the 2015 Dietary Guidelines for Americans Committee Report as part of its justification for rulemaking, unless there was significant scientific agreement.  Opponents claim no such agreement exists, therefore, the rule should be struck down by the courts and sent back to the FDA for redrafting.
Food and beverage manufacturers with sales of over $10 million annually will be required to comply with the new label requirements by July 26, 2018. Those with sales less than $10 million annually will have an additional year to comply.

Federal Mandatory GMO Labeling Bill Fails to Advance

Industry wide, food companies are preparing for the Vermont GMO labeling law (effective July 1, 2016), which requires all food products containing GMOs to be labeled.

As previously reported, federal legislation that would prohibit states from requiring mandatory labels for food products containing GMOs failed a key “test” vote last month on the Senate floor. While Congressional supporters of the bill still are pursuing avenues to advance the legislation, they’ve been unable to reach a compromise approach with bill opponents.