Legislators, Companies and Consumers Turn Their Attention Toward Plastics

First, recent studies have shown that the impact and extent of ocean plastic pollution, including microplastic pollution, are much greater than previously realized. For example, the public was aware of surface ocean plastics, such as the “great Pacific garbage patch,” but in 2019 researchers discovered that microplastic pollution in the deep ocean was even more extensive than surface pollution, and a large number (in one case over 70%) of deep sea organisms researchers examined had ingested microplastic particles. These studies fueled the already growing public concern over ocean plastics.

Second, in 2019, China instituted its “National Sword” policy. Prior to National Sword, China was the world’s largest importer of waste plastic. National Sword curtailed this practice by setting strict contamination guidelines for importation of recyclable plastics and banning imports of many other categories of recyclable waste. Most recycling processing plants were unable to meet China’s new contamination guidelines. As a result, in 2018, exports to China of U.S. plastic waste fell by 96% from their peak in 2012, and according to China’s General Administration of Customs, waste plastic shipments to China from all sources dropped by 99.1 percent in 2018 compared with 2017. Because of China’s long-dominant role as a waste importer, U.S. waste management infrastructure had become reliant on its ability to export excess waste to China. National Sword has resulted in a scramble to find new ways to deal with U.S. waste. Plastic waste has piled up, leading many U.S. municipalities to scale back or eliminate their recycling programs entirely, with cancellations being announced as recently as July 2020.

Third, even as many municipalities have begun cancelling recycling programs, consumers have become more aware that much of the waste labelled as recyclable is not in fact economical to recycle and has been landfilled or incinerated. In February, 2020, Greenpeace released a comprehensive survey showing that U.S. material recovery facilities typically recycle only PET #1 and HDPE #2 plastics, despite the fact that consumer items made from resin types #3 to #7 are labeled as recyclable. The Greenpeace report was picked up by numerous news agencies. The following month, in March 2020, PBS and NPR released a documentary alleging that the plastic industry promoted consumer recycling despite knowing that it was not economically viable. While the plastic industry has pushed back on both reports, they are indicative of the growing public debate surrounding plastic pollution.

Initial Activity
In response, early movers have started rolling out plastics-focused initiatives. For example, on the investment side, BlackRock established its Circular Economy fund, which will invest 80% of its funds in companies involved in the development of the circular economy. Morgan Stanley announced its Plastic Waste Resolution, committing to help facilitate the prevention, reduction and removal of 50 million metric tons of plastic waste in rivers, oceans, landscapes and landfills by 2030. Some consumer goods companies have announced similar pledges. Unilever pledged to halve its virgin plastic use, and collect and process more plastic packaging than it sells by 2025. Nestlé announced plans to invest approximately $2 billion to move to using recycled plastics in its packaging, and to ensure that 100% of its packaging was recyclable or reusable by 2025. Diageo and PepsiCo said that they will introduce paper bottles next year. Dell Technologies has been pursuing its Ocean Plastics Initiative, to process plastics collected from beaches, waterways and coastal areas and use them in packaging.

Actions are also being taken within the petrochemical and plastics industry, as well. Numerous energy and chemical companies have been investing in technology that converts plastic waste to fuel, or “chemically recycles” waste plastic. For example, some members of the petrochemical industry have invested in plastics-to-fuel and molecular recycling infrastructure. LyondellBasell has built a pilot facility in Ferrara, Italy, to further develop its proprietary molecular recycling technology to address difficult-to-recycle plastic waste such as multilayer film. In 2019, a number of companies involved in the plastics value chain founded the Alliance to End Plastic Waste, a nonprofit organization focused on helping solve the problem of plastic waste entering the oceans.

It is expected that other companies, in sectors such as finance, manufacturing, consumer goods, and petrochemical, will begin making plastic pollution a key element of their sustainability programs.

Legislative Action
Thus far, the response to plastic-pollution concerns in the United States has primarily been at the state and local level, and aimed at single-use disposable items. Several states have banned single-use plastic bags, while others have imposed surcharges on them. Other states and municipalities have instituted laws banning plastic straws, Styrofoam, or requiring take-out containers be made out of recyclable materials. However, these efforts have typically been local, narrow in scope, and focused on end-use consumers rather than on petrochemicals, manufacturers or distributers.

The Break Free From Plastic Pollution Act of 2020
In response, some industry and advocacy groups have pushed for broader legislation, which has led to the introduction of The Break Free From Plastic Pollution Act of 2020 (BFFPPA), which is the major plastics-related bill introduced so far this legislative session. The BFFPPA was introduced in the Senate and House in February 2020 by Senator Tom Udall (D-NM), and U.S. Representative Alan Lowenthal (D-CA), and has numerous cosponsors. These sponsors cited both the crisis of ocean plastics and the role plastic production plays in climate change. The BFFPPA attempts to address both issues.

The BFFPPA would institute major regulations impacting a wide range of economic sectors. The major areas of impact are the following:

• Extended Producer Responsibility: The BFFPPA would attempt to internalize waste disposal costs by putting those costs on producers of certain plastic products. Producers of specified products (packaging, containers, food service products and paper) would be required to design, manage and finance programs aimed at collecting and processing the waste created by those products. This would alleviate the waste management burden currently being borne by state and local governments, by putting those costs back on the producers (and by extension the consumers of their products). Producers of certain products would also be required to develop their own product stewardship plans explaining how the producers would meet specified performance targets. These plans would need to be approved by the U.S. EPA every five years.
• Beverage Industry Reform: The BFFPPA would reduce disposable beverage container waste by introducing a nationwide 10 cent container refund requirement (i.e., a national “bottle bill”). The unclaimed funds from the bottle bill would be used to supplement investment by beverage companies in collection and recycling infrastructure upgrades. In addition, the BFFPPA would establish mandatory recycled content requirements for beverage containers, with the recycled content requirement increasing every year until it reached a maximum of 80% in 2040.
• Plastics Facility Moratorium: In one of its broadest measures, the BFFPPA would put a temporary moratorium on new plastic production facilities, including plants that convert natural gas liquids (NGLs) into ethylene and propylene, which are used as feedstocks for plastic production. This would include crackers and propane dehydrogenation (PDH) units. The moratorium would last three years or until the EPA promulgated new regulations related to plastic production facilities, whichever was later, and would establish clean-energy requirements for such facilities and impose stricter air- and water-pollution standards on chemical plants. Over the past several years, oil and gas companies have been moving into the plastics space to offset anticipated future decreased demand for fossil fuels, so the BFFPPA could impact these strategies.
• In addition to the above areas, the BFFPPA contains a number of other reforms, such as a national ban on certain single-use plastic items, a nationwide carry-out bag fee, limits on cigarette filters and e-cigarettes, and new labeling requirements to better inform consumers of the recyclability or compostability of items.

Plastic Waste Reduction and Recycling Act (H.R. 7228)
More recently, on June 15, 2020, Congressional representatives Haley Stevens (D-MI) and Anthony Gonzalez (R-OH), with co-sponsors Eddie Bernice Johnson (D-TX), Frank Lucas (R-OK) and Francis Rooney (R-FL), introduced the Plastic Waste Reduction and Recycling Act. The Plastic Waste Reduction and Recycling Act is a more limited bill than the BFFPPA, and is intended to reduce plastic waste, support recycling research and development, and improve the global competitiveness of the U.S. plastics recycling industry. A major goal of the bill is to help the U.S. become a world leader in plastic waste management.

In introducing the bill, Rep. Haley, referencing China’s National Sword policy, stated that “In 2018, the U.S. woke up to the fragile predicament of our plastic waste management system” in large part “because we failed as a nation to invest in domestic recycling infrastructure and policies to account for the growing demand for plastic ... . The Plastic Waste Reduction and Recycling Act will help develop a world-leading U.S. industry in advanced plastics recycling technologies, and unleash the innovative potential of our nation to address our plastic waste crisis and generate greater value from the plastics we do produce.”

To accomplish this goal, the Plastic Waste Reduction and Recycling Act:

• Directs the Office of Science and Technology Policy to establish a “Plastic Waste Reduction and Recycling Program” to improve the global competitiveness of the U.S. plastics recycling industry, ensure U.S. leadership in plastics waste reduction and recycling, and reduce the harmful effects of plastic waste on the environment;
• Directs the Office of Science and Technology Policy to establish an interagency committee to coordinate the program and develop a strategic plan for plastic waste reduction and recycling and plastic waste remediation;
• Directs the National Institute of Standards and Technologies to carry out research to begin establishing standards for plastic recycling technologies;
• Directs a number of federal agencies to support research and other activities on areas such as advanced recycling technologies, plastic waste remediation, and the public health impacts of microplastics.

The bill would authorize five years of funding for these programs, starting with $85m for 2021, with annual funding increasing by 6.5% per year.

The Plastic Waste Reduction and Recycling Act has been endorsed by several industry groups, including the American Chemistry Council, American Chemistry Society, American Beverage Association, and Plastics Industry Association. In a press release following introduction of the bill, the American Chemistry Council stated that “Passing the Plastics Waste Reduction and Recycling Act would accelerate research and development on advanced plastics recycling technologies, which would enable a significantly greater range of our plastics resources to be repurposed. It also would increase research and coordination across federal agencies on plastic waste reduction as well as recycling.”

Other Bills
A number of other bills have also been introduced that address, at least in part, plastic pollution, although they all are significantly narrower in focus than the BFFPPA. These include:

• Save Our Seas 2.0 Act (S.1982/H.R.3969): The Save our Seas 2.0 Act (SOS2), was introduced by senators Sheldon Whitehouse (D-RI), Dan Sullivan (R-AK) and Bob Menendez (D-NJ) to address plastic debris threatening coastal economies and marine life. SOS2 is aimed primarily at plastic pollution washing up on beaches and harming wildlife. To do this, SOS2 includes three main provisions: improve the ability of the U.S. to respond to marine debris by establishing a Marine Debris Foundation, a genius prize for innovation in this area, and provides grants for further research and other programs; enhance the global engagement of the U.S. on these issues by formalizing U.S. policy and enhancing federal agency outreach to other countries; and improve domestic infrastructure by directing the EPA to develop a strategy to improve post-consumer materials management and providing grants for materials management infrastructure improvements. While SOS2 passed the Senate unanimously in January 2020, it has not been moved out of committee and received a vote in the House since its introduction in the House last July.
• MICRO Plastics Act of 2020 (S.3306/H.R.5902): The MICRO Plastics Act of 2020 was introduced in the House and the Senate in February of 2020 by representatives Brian Mast (R-FL) and Jeff Merkley (D-OR). If passed, the bill would direct the EPA to establish a pilot program to test the efficacy and cost effectiveness of tools, technologies and techniques to remove microplastics from the environment and to prevent the release of microplastics into the environment. The pilot program would have the EPA test a variety of possible solutions to accomplish this goal, such as natural infrastructure, green infrastructure, mechanical removal, or filtration. Rep. Mast stated that “[Ocean plastics] are only going to get worse until we do something about it, so this legislation is about getting serious with innovative ways to remove these harmful plastics from our environment. The health of our waterways depends on it.”
• America’s Water Infrastructure Act of 2020 (S.3591): The America’s Water Infrastructure Act of 2020 was introduced in May 2020 by Senator John Barrasso (R-WY), to provide improvements to U.S. rivers and harbors, conserve and develop water and related resources, and provide for water pollution control activities. While it does not heavily relate to plastics, the bill would allow the EPA to provide grants to local governments to support infrastructure improvements intended to reduce and remove plastic waste and post-consumer materials, including microplastics and microfibers, from wastewater.

Likelihood of Passage
Focus on the BFFPPA, which was introduced in February 2020, was quickly taken away by the need for Congress to address the COVID-19 pandemic and resulting economic impact. Similarly, of the bills discussed above, none have moved out of committee other than SOS2, and it has only done so in the Senate. This late in the year and with the need to pass another COVID-19 relief bill, the passage of these bills is questionable. However, despite this, as legislation to respond to COVID-19 moves forward and Congress looks to return to other issues, some in Congress have started turning their attention back to plastic pollution.

As noted above, on June 15 several bipartisan Congressional representatives introduced the Plastic Waste Reduction and Recycling Act, which received endorsement from some industry representatives. Later in June, the House Select Committee on the climate crisis issued its action plan in a report titled Solving the Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy Resilient and Just America. The Committee’s Action Plan calls for 100% clean net zero emissions economy wide in the U.S. no later than 2050, and sets ambitious interim targets. The Action Plan discusses plastics as one of the industries responsible for carbon dioxide emissions, and notes that implementing a circular economy framework in the cement, steel, aluminum, and plastic subsectors could reduce total global carbon emissions by 40% in 2050. The Action Plan also favorably discusses a number of plastic pollution-related bills, including the BFFPPA, and recommends that Congress pass legislation to facilitate the development of infrastructure for materials recovery and recycling.

On July 7, the House Committee on Oversight and Reform held a briefing titled “Effects of Plastic Production and Pollution on Americans’ Health During Coronavirus Crisis.” The briefing discussed the impact of plastic pollution on US health, in particular the impact on low income minority communities, the problem of single use plastics, and the health impacts of microplastic pollution. During the hearing, Subcommittee Chairman Harley Rouda (D-CA) said that an increasing national focus on public health should prompt passage of the BFFPPA.

Ultimately given the COVID-19 pandemic, economic downturn, and GOP control of the Senate and White House (whereas the BFFPPA has overwhelmingly Democratic sponsorship), a major piece of environmental legislation such as the BFFPPA probably will not be passed during this legislative session. Passage of the Plastic Waste Reduction and Recycling Act also seems unlikely, given the upcoming congressional recess and election, as a version has not been introduced yet in the Senate.

However, Congressional representatives are giving attention to plastic pollution, both as a standalone issue and because of plastics’ role in climate change. Even if the BFFPPA does not pass, it is possible some of the reforms contained in the BFFPPA will be introduced as amendments to spending bills. Further, because of the Democratic Party’s desire to pass climate legislation, if Joe Biden wins the 2020 election it is likely that some or all of the BFFPPA’s proposed reforms or other plastics-reduction legislation will be included with and passed as part of a larger climate bill.

Conclusion
Plastic reduction is gaining momentum as a major element of sustainability. The public has a growing awareness of and concern regarding plastic pollution, and issues such as waste reduction and circular economics will become a core element of sustainability programs in the future. Some early movers are already embracing these trends.

Regulations impacting plastics-related industries such as oil and gas, manufacturing, and consumer goods industries are likely both at the state and federal level, especially if the Administration changes following the November election. In light of this increased regulation, companies which get ahead of the legislative trend stand to profit. For example, beverage companies which already are working to shift to sustainable containers will be better positioned against competitors who wait until such laws are passed, and investment funds focused on recycling and recovery companies could see that sector expand in response to the new legislation. Early movers that invest in related technology, IP and infrastructure upgrades may see these assets increase in value as plastic regulations are implemented. By being aware of and preparing for the impacts of future plastic-pollution legislation, companies can prepare themselves for competitive advantage once such legislation is passed. Because of this, companies should consider how to begin factoring plastic reduction and circular economics into their long-term sustainability strategy.