Extended Producer Responsibility: What It Means for Your Business

What Is Extended Producer Responsibility?

Extended Producer Responsibility (EPR) is a policy approach that shifts the financial and operational responsibility for end-of-life packaging management from municipalities and taxpayers to the companies that produce and sell the packaged products. Under EPR, if you sell a product in a corrugated box, you are financially responsible for ensuring that box gets collected, sorted, and recycled after the consumer is done with it.

EPR for packaging is already the norm in the European Union, Canada, Japan, and South Korea. In the United States, it is newer but accelerating rapidly. As of late 2024, four states have enacted packaging EPR laws: Maine (2021), Oregon (2021), Colorado (2022), and California (2022). More than a dozen additional states have introduced similar legislation.

How EPR Works in Practice

In each state with an EPR law, a Producer Responsibility Organization (PRO) is established to administer the program. Companies that place packaging into the market — referred to as "producers" or "obligated parties" — must register with the PRO and report the types and quantities of packaging they use. Based on this reporting, the PRO assesses fees that fund collection, sorting, and recycling infrastructure.

Fees are typically modulated by material type, meaning materials that are easy and cheap to recycle (like corrugated cardboard) carry lower fees, while materials that are difficult to recycle (like multi-layer flexible plastics) carry higher fees. This eco-modulation creates a financial incentive to choose more recyclable packaging materials — a significant advantage for businesses already using corrugated.

Who Is Affected?

If you sell products into a state with an EPR law, you are likely an obligated party. This includes not just companies headquartered in those states but any company that ships products to consumers in those states — which means most e-commerce businesses are affected. Small business exemptions vary by state: Oregon exempts producers with less than $5 million in annual revenue, while California's threshold is lower.

Even if you fall below the exemption threshold today, it is wise to begin tracking your packaging usage now. Exemption thresholds may tighten over time, and the tracking systems you build today will serve you when compliance becomes mandatory.

Financial Impact

EPR fee rates are still being established in the US, but European programs provide a benchmark. In France, EPR fees for corrugated packaging are approximately 5 to 10 cents per kilogram. For flexible plastics, fees range from 30 to 80 cents per kilogram. A mid-size e-commerce business using 50,000 kg of corrugated annually might face fees of $2,500 to $5,000 per year under a European-style program.

While these fees add cost, they are modest compared to the total cost of packaging. The bigger financial impact is the incentive structure: EPR makes unsustainable packaging more expensive and sustainable packaging relatively cheaper. Businesses that have already optimized their packaging for recyclability and reduced material use will face lower EPR costs than competitors who have not.

Preparing Your Business

Start by inventorying all packaging your business uses, including primary packaging (the box or container your product comes in), secondary packaging (the shipping box), and tertiary packaging (pallets, stretch wrap, and other transport packaging). Record the material type and weight of each component. This data is the foundation of your EPR compliance reporting.

• Register with PROs in states where you have obligations.
• Implement packaging weight tracking in your warehouse management system.
• Evaluate material substitutions that reduce EPR fees — such as replacing plastic void fill with paper.
• Reduce total packaging weight through right-sizing and material optimization.
• Maintain records for at least five years to support audit requirements.

EPR is not a crisis — it is a gradual shift that rewards companies already moving toward sustainable packaging. If you are reading this article, you are ahead of the curve. The businesses that will struggle are the ones that ignore EPR until enforcement arrives.