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					Recycled content laws:
How are they working?
by Lauri Aunan and Tom Martin




1  n the ongoipg debate over ways to stimulate
    markets for recyclables, recycled content
laws are already on the books ín severa1 states.

Markets - strong, viable markets - are still         Self-Reliance and Californians Against Waste           n Are RCLs being enforced?
at the top of the recycling wish list. Around        Foundation collaborated on researchinto how            n Are there measurable results from imple.
the country, debate continues over what pol-         recycled content laws (RCLs) are working.                mentation of RCLs, and have RCLs con-
icy tools should be used to stimulate demand         The research and its conclusions are set forth           tributed to increased use of post-consume
for recyclable materials by manufacturers.           in the report States Close the Loop: A Survey            material in manufacturing?
    A preliminary list of demand-side policies       of Recycled Content LLAWS Other Market
                                                                                 and                        n For what materials or products do RCLs
prepared by the Recycling Advisory Coun-             Development Strategies.                                  make the most sense?
cil includes product-specific minimum con-                                                                  n What factors should be considered in
tent standards, material-specific utilization        Research methodology                                     crafting the most effective recycled COO
requirements, manufacturer responsibility            The researchconsisted of four general stages:            tent policy?
proposals (based on the German packaging             a review of existing state legislation and lit-
law model), virgin materials taxes, shared           erature; questionnaires sent to state offrcials;       Findings
responsibihty (basedon market development            follow-up interviews with state offrcials; and
work being done in Canada) and a national            solicitation of comments on the draft report.
secondary materials use trust fund.                  In total, 150 forms were sent to officials in 50       ovemeing RCLs led to the
    As policymakers consider various pro-            mes and Washington, D.C. Sixty-ùlree forms                Most statesreport that
posals and options, they will need to look at        were retumed from 39 states. More than 25
how existing programs are working. Of the            telephone interviews were conducted.
policy options list preparedby RAC, only one             The project sought to answer the follow-           involved writing rules. States
has been implemented in thís country: prod-          ing questions:                                         designed to be more self-impleme
uct-specitic minimum content standards. (So-         n How are states implementing RCLs, and                less time writing rules. The cosí to st
called “rates and dates” laws in Oregon and              at what cost to the states?                        administer recycled newsprint use laws
California for rigid plastic containers are effec-   n Have there been legal or legislative chal-           between $500 and $83,000 per year, per
tive beginning in 1995, and are not in fact              lenges to RCLs, and how have they been             (see Table 1.)
minimum content laws, but are closer to uti-             resolved?                                             There have been few legal or legisla
lization proposals, because they allow more          n Are affected parties complying with                  challenges to RCLs. The most signifi
than one compliance option.)                             RCLs?                                              challenge to date is the contention that g
    Much has been written about the existence
of recycled content laws, but little has been        Lauri Aunan is materials use policy director for the National Environmental Law Center, an e
reported about how they are working “on the          mental policy and litigation center with offices in Portland, Oregon and Boston. Tom Martin is a r
ground.” During 1993, the National Envi-             associate with the Institute for Local Self-Reliance, a nonprofit research and educational org
ronmental Law Center, the Institute for Local        in Washington. D.C. that focuses on sustainable and economic development issues.


m     Resource Recycling May 1994
container recycled content laws intended to                                                          Waste Management Board have stated that
apply to out-of-statemanufacturetsare invalid
under the Interstate Commerce Clause as an                                                             both the economic development implica-
unconstitutional regulation or discrimination                                                          tions and the market development impacts
against interstate commerce. Although the                                                              are impressive . . mhe newsprint mini-
argumenthas not been brought to court, there       (/     Govemment procurement programs               mum content law has been cited as a lead-
are legal precedents that indicate carefully       : - pricepreferentes,   goalsor set                 ing factor in the decision by at least three
crafted RCLs should withstand a Commerce               asides,               strategies
                                                              joint purchasing         and             manufacturers to seriously consider siting
Clause challenge. The staterecycled content                             -
                                                       contentstandards canaffect nearly               new facilities in California. . The Board
                                 and
repon identifteslegal precedents discusses                        of
                                                       20 percent the grossnationalprod-               has received certifications indicatin; that
how to draft content laws to make’   them less         uct almually.                                   consumptionof recycledcontent newsprint
                                                   8”.                                                 increased from approximately 628,000
susceptibleto challenge.
    Most affected companies are complying          -ti Low interestloanscanincrease                    tons in 1991 to 1.83 million tons in 1992.
with RCLs, or have indicated they will com-        \ access capitalfor recyclingbusi-
                                                             to
ply. In general, states- among them, Cali-          < nesses,          small,start-up
                                                              especially                             Staff also concluded that
fornia - report high levels of cooperation          ,.-.
                                                   ‘ ” companies.                                       [t]he increase in demand for glass cullet
under RCLs. Fiberglass insulation manufac-                                                              resulting from California glass container
                                          s
turers are in compliance with Califomia’ 10          i/                         whencom-
                                                          Tax credits- especially                       anàfiberglass insulation manufacturers
percentrecycledcontentstandard. The major-         ;:,    bmedwith otherprograms  suchas                complying with minimum content legisla-
ity of newsprint consumers (publishers and         - +*   grants-can stimulaterecyclíng                 tion is projectedto provide a sufftcient mar-
printers) are reportedly in compliance with        -      markets.                                      ket for al1cullet collected in California.
state laws. Plastic trash bag manufacturers
have indicatedtheir intent to comply with Cal-     “remanufactumd” material may result in com
ifomia’ content law for plastic trash bags. In-
        s                                          pliance through use of pre-consumer scrap,        Recommendations
stateglassmanufacturing plants are reported-       and thus may not have much effect on improv-      The report provides recommendationson how
                                  s
ly in compliance with California’ current 25       ing markets for post-consumer plastics.           to draft recycled content laws, and describes
percentrecycled content standard.                      Stateofficials surveyedfor the project were   the conditions under which these laws are
    Wisconsin officials will expect compli-        unanimous in theír opinions that RCLs have        most desirable.
                     s
ante with the states’ law that requires at least   contributed to improving markets for post-           Recycled content laws should be part of a
10 percentrecycled or “remanufacqed” con-          consumer materials, and were optimistic in        comprehensive package of state policies.
tent for non-FDA-regulated rigid plastic con-      predicting continuedmarket ímprovementdue         including supply programs; financia1 assis-
tainers by 1995. However, allowing use of          to the laws. Staff of the CaliforniaIntegrated    tance programs to smatl, in-state enterprises;
Ir   other policies to leve1 the playing field 1 commercial printers, W Table 1 - State coststo administer recyclednewsprint laws
     ‘
            and recycling (such as incinerator    and telephone direc-
           a, banning toxics in products and      tory publishersrather                                                          Estimated
                                                  than paper manufac- state                          Staff                     annual cost ( 1)
                                                  turers. However, Arizona (2)                       <l                        N.A.
                                                  other recycled con- California                     1 full time; 2 at         $83,000 (3)
                         fficient quantities to   tent laws have suc-                                  1,500 hrslyear
                                                  cessfully targeted Connecticut                     <1                        N.A.
                         state, or in regional or manufacturers,           Illinois                   1                        $30,000-40,000 (4)
                                                  notably fiberglass Maryland                         1                        $30,000
          e made using significant amounts of     insulation and plas- Missouri                      <l                        N.A.
           onsumer material                       tic trash bag laws in Oregon                         .25                     <$15,000
           made from materials for which state California.                 North Carolina            <l                        $500
          ets are weak or nonexistent.                Targeting manu- Rhode Island                   l-l.25                    N.A.
       andatory recycled content standards        facturerscan be more Wisconsin                     <l                        N.A.
       d meet the following tests:                manageable in that
l They should be achievable by industry.          manufacturers may N.A. = Information not providedby stateagency.
                                                                           (1) For administration;doesnot include enforcment/legal.
l They should be set higher than projected be a smaller group, (2) Arizona reportsthat it hasinsufflcient staff to write rules andimplement
z recovery levels to pu11material through         offering more ease            the law.
   the system (if initial standards are set low   of monitoring and (3) Doesnot includeoverhead.
   tbey should increase over time, to ensure enforcement. The (4) Includescopying andmailing costs.
   state-of-the-art content is being met and                                                                 Law
                                                  drawbacks of target- Source:NationalEnvironmental Center,Inshtutefor Local Self-Reliance
   material is pulled through the system).        ing manufacturers                  andCaliforniansAgainstWasteFoundation,States Close the L.oop:
                                                                                     A Survey of Recycled Content Lnws and Other Market Development
I They should require use of post-consumer may include difficul-
                                                                                     Strategies, November 1993.
   material.                                      ty in monitoring and
I They should be measuredby annual aggre- enforcing the com-
   gate use of recycled material (that is. the    pliance of out-of-state companies.                        the state to receive the product (distribu-
   mio of total matetial used to the total recy-      States concemed with Commerce Clause                  tor or importer).
   cled material used, over one year).            issues under recycled content laws should             n drafting the law to apply in state and out
    Recycled content laws should target in-       consider various approaches,including:                    of state, with a fee on products that are not
;tate consumersof the products where possi-       n drafting the law to apply to in-state users             made with recycled content.
)le - for example, newspaper publishers,              of the product, or to the first company in        n drafting the law to apply to products made
    -.-.-          -. .-- .-      --

    with recyclable materials for which there          compliance. One of the best enforcement           based on quality should apply only in thc
    is an interstate market.                           tools is negative publicity. The state should     caseswhere the recycled product fails to mc
     The leastpreferableapproachwould apply            publicize companies that fail to report or fail   functional specifications,and should not apl
the law to in-state manufacturers only. If in-         to meet the standards. Financia1 penalties        simply because recycled product quality
state companies believe this would put them            should be in amounts high enough to encour-       not the same as virgin product quality.
at a competitive disadvantage, a state could           age compliance.                                       Recycled content laws should be drafl
considerpmviding incentives such as tax cred-             If exemptions are provided, the law should     to avoid the need for extensive administ
                        tied
its or other assistance, to meeting the con-           require companies to apply to a state agency      tive rule making that can make the laws mc
tent standards.                                        or board, which must make certain tindings        costly to implement and raise the potential
    Each consumer or manufacturer covered              to grant exemptions. For large consumers          negotiations that can be used to delay a
by the law should provide annual reports that          that can realize savings through economies        weaken the laws’ impact. If a state desil
show the year’ aggregate, average percent-
                 s                                     of scale, there should be no exemption for        the flexibility and ability to fine tune tl
age of content use for the previous year. The          price except in cases where a manufacturer        comes with rulemaking authority, then 1
stateshould publish such information to show           has a monopoly, or where competition among        statute should be drafted to carefully defi
what can be achieved, thereby encouraging              vendors is very limited.                          the law ’s intent to guide rulemaking.    L
leading companies, and putting pressure on                Smaller consumersmay qualify for exemp-        For a copy of the report States Close the L.oop
those that are not complying orare using low           tions based on price, at least until supply and   Survey of Recycled Content Laws and Other M
levels of post-consumer material.                      economies of scale in production make such        ket Dewlopment Strategies, send $10 to NE1
    There should be high penalties for non-            exemptions unnecessary. Any exemption             1536 S.E. 1 lth Avenue, Portland, OR 97214.

 n Table 2 -      Compliancewith selectedrecycledcontent laws
                               Products covered
                               under recycled                 Current or
 state                         content law                                             Final standard         Compliance ( 1)
 California                    Newsprint                      25% (current)             50% by   2000         70%-80% in compliance.
                               Plastic trash bags             10% (current)             30% by   1995         Compliance expected.
                               Glass containers               25% (current)             65% by   2005         Yes, in-state companies (2).
                               Fiberglass                     10% (current)             30% by   1995         Yes.

 CoMecticut                    Newsprint                      20% (current)             50% by 1999                                        s
                                                                                                               Compliance expected for 1993’
                                                                                                                 16% goal.
                               Telephone directories          10% (1995)                40% by 2001            N.A.

 District of                   Newsprint                      20% (current)             20% by 1994            Information not made available by
 Columbia                                                                                                         agency.

 Ulinois                       Newsprint                      28% (current)             28% by 1993            In 1992, standardswere exceeded.
                                                                                                               Data for 1993 not yet available.

 Maryland                      Newsprint                      20% (current)             40% by 1998            50% (estimated to represent 95% of
                                                                                                                 newspapersdisuibuted in the
                                                                                                                 state) met 1993 standard of 12%.
                               Telephone directories          12% (current)             40% by 2000            Law fmt in effect in 1994.

 Missouri                      Newsprint                      iO% (current)             50% by 2000                                        s
                                                                                                               Compliance expected for 1993’
                                                                                                                 10% goal.

 North Carolina                Newsprint                      20% (current)             40% by 1998            No. Companies have paid tax or
                                                                                                                 claimed exemptions.

 Oregon                        ‘
                               Newsprint                      25% (1995)                25% by 1995            Yes.
                               Telephone directories           25% (1995)               25% by 1995            1992 average use 16.25%.
                                Glass containers              ‘
                                                              35% (1995)                50% by 2000            Yes, in-state company (2).

 Wisconsin               .     Newsprint          .           25% (current)             45% by 2001                                           s
                                                                                                               Compliance anticipated for 1993’
                                                                                                                 10% goal.
                               Rigid plastic                   10% (1995)               10% by 1995            N.A.
                               containers

 Rhode Island                  Newsprint                       ll % (eurrent)           40% by 2001            State believes ll % will be met, but
                                                                                                                 may not strictly comply with post
                                                                                                                 consumer fiber requirement.
 N.A. = Law not yet applicable.
 (1) Compliance information estimated by state agencies and is subject to change.
 (2) Some companies claim recycled content laws cannot apply to out-of-state companies due to the Interstate Commerce Clause of the U.S. ConstiNtiol
 Source: National Enviromnental Law Center survey, 1993.       _


m     Resource Recycling May 1994

				
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