The Modernization of Cosmetics Regulation Act of 2022 (MoCRA) has been looming large over the beauty industry since President Biden signed it into law on December 29, 2022. The U.S. Food and Drug Administration (FDA) extended the deadlines for submitting facility registrations and product listings from December 29, 2023, to July 1, 2024, giving companies additional time to meet the new requirements for cosmetic product facility registration and cosmetic product listings.
While the beauty industry was focused on meeting MoCRA requirements ahead of the July 1 deadline, Extended Producer Responsibility (EPR) packaging laws have been enacted in four states: California, Colorado, Oregon, and Maine. Maryland has taken the first step in enacting EPR legislation by passing a bill that calls for a statewide needs assessment but does not actually create an EPR program. In 2024, six additional states have introduced EPR legislation.
Like MoCRA, or any other federal or state regulation, EPR compliance is not optional. Companies that distribute products to consumers in any of these states will be required to comply with the law's requirements across all states, with deadlines starting as early as 2024.
So, what are the various EPR requirements, and how can companies prepare for compliance? The Independent Beauty Association (IBA) Cosmetics Convergence 2024 Spring Symposium covered this topic extensively through two dedicated sessions that specifically focused on EPR compliance. Below are a few of the most important takeaways companies need to know to ensure compliance as these deadlines approach.
What is EPR?
According to John Hite, Regulatory and Stakeholder Engagement Advisor at Circular Action Alliance (CAA), EPR is a policy approach that shifts responsibility for recycling/end-of-life management of a product from governments and taxpayers to the producer, which, in most cases, is the brand owner (if the brand owner is located in the US).
EPR laws for paper and packaging require producers (brand owners, retailers, and first importers) to either partially or fully fund, and, in some cases, administer the collection and processing of the paper, packaging, and packaging-like items they supply into these states. EPR laws for packaging in the US require that producers comply with the laws through a Producer Responsibility Organization (PRO).
What is a PRO?
Most EPR laws require producers to join a PRO. A PRO’s primary responsibilities are the development, implementation, and operation of a program plan that is approved by the relevant government agency and the collection and management of producer fees.
The producer works with a PRO to categorize its packaging data, and then the PRO will develop a fee schedule, which producers will use to calculate their fees under the system. Those fees are collected by the PRO, which uses them to fund the operation of the program. The program is guided by the program plan, which outlines how the PRO is going to develop and implement the recycling program on behalf of producers. The PRO developing and submitting that program for approval is a critical step in the process.
What is CAA?
CAA is the first PRO for packaging in the US and the only PRO approved so far to act as a representative for producers in each of the states where EPR legislation has been enacted. The organization is a 501c3 nonprofit dedicated to implementing effective EPR laws for paper and packaging in the US. CAA was founded by 20 companies from the food and beverage, consumer goods, and retail industries and has been approved to be the single PRO in CA, CO, and Maryland. CAA is the only PRO intending to submit a program plan in Oregon.
The organization’s mission is to provide producers with consistent EPR services across multiple states while developing and implementing EPR programs that meet state-specific requirements, leverage existing recycling systems and infrastructure, and advance the circularity of covered materials through collaboration with local governments, service providers, and recycling system stakeholders.
“One of the core goals of CAA from its founding was really an effort to try and create some flexibility and harmonization across US states,” says Hite. “The goal was to create an organization that could readily adapt and be flexible to the requirements of each state while providing producers with a single point of compliance.”
Navigating varied EPR regulations
It would be convenient if every state had the same EPR regulations, but unfortunately, that’s not the case. Laws differ from state to state, and EPR regulations are no different. Despite CAA’s best efforts for harmonization, there are some differences in the requirements imposed by each state.
“We’re trying to provide strong producer governance so producers are in the driver's seat in defining the objectives of the programs and how producers are going to meet each of the requirements of these state statutes,” says Hite.
All four states include single-use packaging and residential packaging (packaging going to a consumer), but how these four states approach this funding does differ significantly. California has an additional cost in that it requires that producers of plastic packaging pay into a $500 million plastic pollution mitigation fund over a period of 10 years, resulting in a $5 billion contribution that will be used by CalRecycle, the state agency that oversees recycling, to cut plastic pollution and support disadvantaged, low-income, and rural communities hurt most by the impacts of plastic waste.
Producer preparedness and readiness
So, what do producers need to do in order to be compliant? Four of the states share four general collective requirements. The first step is to join an approved PRO. CAA has set a deadline of July 1, 2024, to sign up. That is the first key step in compliance with EPR programs. Once you’ve joined and collected your company’s data, you’ll need to report that data to the PRO. The PRO then uses that data to develop a comprehensive fee schedule for all producers. Producers are required to pay those dues to the PRO, which is based on the type and weight of the producer’s packaging.
Producers need to keep in mind that EPR laws will incentivize producers to make their packaging more sustainable, which will reduce their fees. This is not explicitly a requirement, but producers should think through how they can plan to take advantage of those incentives.
Important deadlines to consider
Producer register deadline
In OR: In statute July 2025; CAA deadline July 2024
In CO: in statute July 2025 (July 2024 proposed in draft rules); CAA deadline July 2024
In CA: In statute January 2024; CAA deadline July 2024
Producer reporting deadline
In OR: CAA deadline March 2025
In CO: CAA deadline August 2025
In CA: CAA deadline August 2025
Producer fees released
In OR: CAA deadline, July 2025
In CO: CAA deadline, October 2025
In CA: CAA deadline, April 2026
First fees invoice issued
In OR: CAA deadline July 2025
In CO: CAA deadline January 2026
In CA: CAA deadline January 2027
Program starts:
In Statue: July 2025 in OR
In Statue: Jan 2026 (latest) in CO
In Statue: Jan 2027 in CA
What data do producers need to collect and report to the PRO?
CAA has been waiting to provide guidance materials to producers until they had certainty on the reporting categories in several key states, mostly California. These guidance materials will tell producers everything they need to know about their obligations under each state’s law, including the definition of obligated producer, materials included in the state’s program, and material data reporting requirements. This guidance will be finalized and shared with producers in 2024, as regulations are finalized.
What fees can producers expect?
The short answer: CAA doesn’t know yet.
Hite noted that producer fees represent the full program budget, so producer fess cannot be determined until CAA has clarity on how much each EPR program is going to cost. The producer data needs to come first in order to allocate those material costs across each producer accurately. The only state where CAA has some certainty is Oregon, but there are still several areas that are subject to change. The budget needs to be set before CAA can give producers a set fee schedule.
How are producer fees determined?
Fees almost always vary by covered material or packaging type. This variation reflects the difference between each material in terms of (but not limited to) its quantities, cost to recycle, and recycling performance. Once the total system costs for a jurisdiction are known, the PRO will allocate these costs to producers based on the amount and type of packaging they supply.
“The end goal here is to make sure each producer pays their fair share of fees,” says Hite.
California’s source reduction requirements
California’s EPR requirements have a very unique element of source reduction, which sets them apart from EPR packaging programs worldwide.
By 2032, all single-use plastic packaging must achieve a source reduction of 25% by weight and 25% by component. Ten percent must be converted to reusable/refillable or eliminated entirely, and 15% must be source-reduced in a way that allows consumers to refill home or commercial reusable containers and/or shift to non-plastic-covered material.
A key element of this program is setting a market-wide baseline. CAA has been working to ensure CalRecycle understands the importance of this.
What should producers do next?
The first step is registering with CAA by July 1, 2024. The registration form is a very straightforward contact form that allows CAA to get in contact with producers on the next steps. Companies that distribute products in California, Colorado, and Oregon are required to meet this deadline.
How do I know if I’m a producer?
CAA’s guidance materials will include a number of different scenarios to help companies determine if they are a producer. There are small producer exemptions to these EPR laws, which will be detailed in these materials. CAA encourages producers to work with their legal counsel and/or do a close read of the rules for each state to determine their obligations.
If you missed the symposium but are interested in getting access to the recordings, they are available for purchase through IBA. Please reach out to info@independentbeauty.org for more information.
