By Abby Blocker, Kristen Hildreth, Billy Johnson, Adam Schaffer and Justin Short

Across the globe, 2023 was a whirlwind year for the recycled materials industry with major legislation, regulatory action and international agreements impacting all commodities. From extended producer responsibility and recycled content mandates to bans on per- and polyfluorinated substances (PFAS) in packaging and new metals theft legislation, the activity never stopped. To summarize that action for you, ISRI has taken a deep-dive into 2023 trends — if you have any questions, please don’t hesitate to reach out to ISRI staff.

Environmental Justice

The concept of environmental justice (EJ), defined as the “fair treatment and meaningful involvement of all people regardless of race, color, national origin or income, with respect to the development, implementation and enforcement of environmental laws, regulations and policies,” is rapidly evolving at all levels of government. At the federal level, EJ initiatives are spread across the administration and are predominately guided by the Justice40 Initiative as established by Executive Order 14008. The order mandates that at least 40 percent of the overall benefits of certain federal investments be directed to disadvantaged communities that are marginalized, underserved and overburdened by pollution. For more details on Justice40 see ISRI News.

In 2023, the administration affirmed its commitment to environmental justice and released a playbook for federal agencies on how to set planning and performance measures to effectively integrate environmental justice in their work.

At the state level, twenty-two states have so far adopted EJ regulations, policies, or executive orders. In 2023, Arizona, Michigan, Nevada, North Carolina, Rhode Island, and Minnesota sought to join this list, with only Minnesota succeeding. Additionally, a growing number of states have established EJ offices, commissions, task forces, or EJ coordinators positions to assist in recommendations and guide implementation of state level policies. There are currently 26 states with such offices. The latest addition was in Delaware, where Dr. Katera Moore was appointed as the first EJ coordinator for the Delaware Department of Natural Resources and Environmental Control in February 2023.

During 2023 both Texas and Nevada attempted, but failed to pass legislation to establish similar councils and commissions. Connecticut introduced legislation which initially mirrored New Jersey’s 2020 S232 in targeting recyclers as “environmental stressors.” However, ISRI members’ proactive engagement led to the bill being successfully amended, and the bill was passed with a narrower focus on new “affecting facilities.” ISRI’s New Jersey Chapter continues its appeal of the regulations implementing S232 and the overly broad interpretation of a “new” facility by the New Jersey Department of Environmental Protection. The case is expected to go to trial in Spring 2024.

Extended Producer Responsibility (EPR)

Extended producer responsibility is a concept and policy approach in which producers are given financial and/or physical responsibility for the disposal or treatment of post-consumer products. Within the industry, ISRI has dedicated its focus to monitoring emerging trends and forthcoming EPR policies concerning plastic and packaging materials, tires, electronic waste, and more.

  • Packaging EPR: Following the trends set in previous years by Maine, Oregon, California and Colorado, 14 states considered EPR packaging legislation in 2023, although none passed full packaging EPR programs. New Hampshire enacted a study bill; bills in Illinois and Maryland were amended to include needs assessments; Connecticut’s was amended to recycled content requirements; and Vermont enacted a household hazardous products EPR law.
  • Tire EPR: Following a loss more than a decade ago and despite unified opposition by tire recyclers, manufacturers, and retailers, Connecticut’s HB 6486 was enacted in June requiring the creation of a first in the nation EPR program for tires. As of now, the legislation is unclear on numerous aspects of how the program is to be developed and administered but will be done so by the state’s Department of Energy and Environmental Protection.
  • Electronic EPR: Another frequently encountered EPR policy pertains to the management of end-of-life electronics, although the specifics of these laws vary significantly from state to state. To date there have been 24 states that have enacted electronics EPR laws, while California is the only state to enact an Advanced Recycling Fee (ARF) program. While states have continued to introduce proposals and amendments, no new states have adopted programs since 2011. Instead, the focus in recent years has shifted to lithium-ion batteries and right to repair legislation.

Federally, while the Break Free from Plastics Pollution Act was reintroduced, it remains a partisan piece of legislation with little chance of passage. The bill has the intention of reducing plastic pollution. It’s a sweeping bill with numerous provisions including bottle bill, extended producer responsibility (EPR) and recycled content provisions.

Battery Labeling & Recycling

In 2023, the Department of Energy unveiled a plethora of new funding to bolster battery recycling, aligning with the administration’s goals of supporting a strong domestic critical materials supply chain. Those investments included recycling batteries from consumer products, a new advanced battery research and development consortium to research solutions for challenges associated with raw materials and critical minerals, and the ongoing Lithium-Ion Battery Recycling Prize which promotes innovative approaches to the collection, sorting, storage, and transportation of used lithium-ion batteries.

Simultaneously, several other agencies were also focused in 2023 on better clarifying guidelines and standards to alleviate concerns associated with the growing use of lithium-ion batteries and related concerns, such as fire hazards and consumer safety. For instance, the Consumer Product Safety Commission held a national forum to discuss best practices for preventing battery fires in e-bikes and other micromobility products, alongside strategies to mitigate associated risks. The commission also proposed new rules for performance and labeling of consumer products containing button or coin batteries. The Environmental Protection Agency (EPA) also signaled their intention to establish a new, distinct, category of universal waste specifically for lithium batteries, aiming to enhance safety standards and reduce fire risks from mismanaged end-of-life batteries.

As mentioned previously, state-level initiatives have also gained momentum, particularly in addressing challenges posed by lithium-ion and other battery types. Following California’s 2022 legislation on consumer battery stewardship and battery embedded products, Washington implemented a portable battery stewardship program in 2023. These states are currently in the initial phases of program development and stakeholder engagement. States like New York, New Jersey, Maine, and Oregon which already have electronic EPR laws, may also seek to follow this new trend to ensure appropriate collection and recycling of smaller batteries.

For larger-format and electric and hybrid vehicle propulsion batteries, New Jersey’s legislature passed S3723 to create an EPR program. ISRI’s NJ Chapter worked to protect the voluntary, owner-initiated take-back nature of the program through a volley of last-minute floor amendments. If enacted, the legislation will ensure regulations reflect the ownership rights of vehicle recyclers. Washington issued a preliminary EV Battery Management Study in December 2023, highlighting the necessity for careful consideration of federal and state action — a final report is due in April 2024. A failed attempt by California to create a limited EPR program for “vehicle traction batteries” is likely to be reintroduced in 2024.

Per- and Polyfluoroalkyl Substances (PFAS)

PFAS, a group of synthetic chemicals not occurring naturally in the environment are ubiquitous in everyday products such as carpets, food packaging and paints. Due to their widespread use, PFAS are inevitably found in the waste and recycling streams, garnering increasing attention from local, state and federal governments.

In 2023, EPA took a leading role in addressing PFAS-related concerns, with actions including but not limited to: revising the Toxics Release Inventory reporting requirements to mandate reporting of PFAS usage regardless of the concentration level; requiring reporting for PFAS manufactured, imported or used, in any amount in the United States; adding PFAS as a national enforcement and compliance initiative; and seeking input on designating additional PFAS under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), following its 2022 proposal to designate perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) as hazardous substances.

Amidst regulatory action, some bills in Congress have proposed exempting certain industries from PFAS Superfund liability. Those seeking “passive receiver” designations did not manufacture or use PFAS, but rather have “passively” received them through a myriad of products in the day-to-day nature of the industry. While it is unclear what type of remedial action would be necessary to eliminate PFAS exposure, Superfund liability could run into the millions of dollars for each recycling facility and require further compliance efforts to mitigate against clean water and clean air acts contamination in addition to other environmental justice actions. For more information on the PFAS reporting and recordkeeping Rules, read ISRI News.

On the state level, a patchwork of laws exist for PFAS in food packaging, currently spanning 12 states. This patchwork makes it difficult for companies to strategize their supply chain and distribution. California and New York were the first to pass laws regulating PFAS in food packaging. Their regulations are similar, with both prohibiting intentionally added PFAS in plant fiber-based food packaging. Both states’ laws went into effect at the beginning of 2023. Vermont became the first state to enact a law that applies to all food packaging, rather than just fiber-based packs that went effective July 1, 2023. Rhode Island was next with an effective date that was extended to July 2024.

As states develop PFAS guidance and regulations, ISRI is actively participating as the voice of the industry. In October 2023, ISRI submitted comments to the Minnesota Pollution Control Agency regarding its draft PFAS guidance. Areas of concern highlighted by ISRI include PFAS testing and remediation requirements in EJ or stormwater permitting, potential targeting of shredders and automotive shredder residue, the historical use of PFAS in firefighting foam as a target for cleanup and liability actions, and how PFAS product bans might affect the use of recycled content.

Materials Theft & Catalytic Converters

Annually, over 30 million catalytic converters are legally recycled, primarily through end-of-life automobile recycling. To address catalytic converter theft, however, ISRI has urged both Congress and state lawmakers to establish a national registry and regional identification systems for these automotive parts. In 2023, federal efforts included the reintroduction of the Preventing Auto Recycling Thefts (PART) Act, focusing on marking catalytic converters with identifiable information, addressing how the parts are purchased, and strengthening local law enforcement’s ability to enforce laws against catalytic converter theft.

In the absence of comprehensive federal action, every state except Wyoming has passed specific requirements for detached catalytic converter transactions, often integrating them into existing metal transaction requirements. In 2023, 40 states introduced bills to create or amend converter requirements, with 23 states passing one or more. Key aspects of these laws have generally included restrictions on who can legally possess a detached converter, licensing and registration requirements for purchasers, proof of ownership requirements for transactions, and heightened penalties for thefts and law violations. ISRI anticipates state action to continue in 2024.

Other: Recycling Infrastructure, E-Waste, Rail & More

In addition to the actions above, EPA made significant investments in the U.S. recycling infrastructure, with the largest in 30 years under the Solid Waste Infrastructure for Recycling Grant program. The program distributed funds to communities across the nation to enhance recycling infrastructure and waste management systems across the country, with 76% of the grants targeting projects which benefit disadvantaged communities, aligning with the administration’s Justice40 initiative. Additionally, these grants provided states and territories with resources to improve management of post-consumer materials through planning, data collection and implementation.

Despite progress in other areas, two major bi-partisan bills, the Recycling and Composting Accountability Act (RCAA) and the Recycling Infrastructure and Accessibility Act of 2023 (RCIA) were introduced, but not passed. RCAA aims to enhance EPA’s capacity for data collection on our nation’s recycling systems, while RIAA proposes a pilot program to improve recycling serves in underserved areas, including rural and disadvantaged communities. ISRI will continue to advocate for these bills in the 118th Congress.

Another bi-partisan effort includes the re-introduction of the Secure E-Waste Export and Recycling Act, designed to restrict the export of untested, nonworking electronics, addressing environmental, human safety, and national security concerns. The legislation would mandate domestic processing of all untested or nonworking electronics, potentially expanding e-scrap processing capacity and creating up to 42,000 jobs, as estimated by the Coalition for American Electronics Recycling (CAER).

In the transportation sector, the Surface Transportation Board (STB) has continued its rulemakings concerning inadequate rail service. This includes the ‘competitive switching’ rule which would allow shippers access to alternative rail carriers under certain circumstances. Within this rulemaking, the STB will be forced to revoke — either partially or in full — the commodity exemptions that currently limit the common carrier protections. ISRI closed out 2023 with talks with STB and plans to submit filings prior to the close of this year, continuing its involvement in this crucial area of transportation policy for the industry.

International Trade & Global Affairs

In 2023, the recycled materials industry navigated a complex array of challenges in international trade and global policy. Key areas of focus included trade in green metals, China tariffs, restrictive market access policies, the Basel Convention and the ongoing UN plastics treaty negotiations.

  • Trade in green metals: The U.S. and the European Commission were unable to finalize a Global Arrangement in Sustainable Steel and Aluminum. Despite a temporary pause in 2021 in Section 232 tariffs on imports of steel and aluminum from the EU and retaliatory tariffs on U.S. exports, no agreement was reached on how to address trading low-carbon steel and aluminum. Both parties remain far apart on finding a solution, as the U.S. government seeks to implement tariffs on high-carbon steel and aluminum, while the EU is planning to incorporate the Global Arrangement into its Carbon Border Adjustment Mechanism. The tariff pause has been extended by 15 months to March 2025, overlapping key elections in both corners of the world.
  • China tariffs: The Biden administration was unable to conclude its four-year statutory review of the Section 301 tariffs on Chinese imports in 2023. Though exclusions for certain imports, like shredder wear parts, were extended for the year, but it remains unclear whether these exclusions will be continued in 2024. ISRI has been and will continue to advocate for a permanent carve-outs for shredder wear parts from China, as well as a more robust exclusions process moving forward.
  • Restrictive market access policies: ISRI carefully followed several international policy developments that could have significant impacts on the global recycled materials market. The EU’s impending changes to its waste shipment regulations will have the de facto effect of banning export of certain recyclables to non-Organisation for Economic Co-operation and Development (OECD) countries once the changes have been fully implemented. While there is an audit process likely to be included for exports to OECD countries, ISRI remains concerned about potentially onerous requirements that could hinder trade. ISRI is engaging with the U.S. government on policies that ostensibly are done under the name of decarbonization and environmentalism, but in reality, are protectionist policies meant to keep recycled materials off the global market. Additionally, the steel industry in the United Kingdom recently called for similar limitations to the EU on trade in recycled steel, while other countries, such as South Africa, are temporarily banning the export of certain ferrous and non-ferrous recycled products in order to combat metals theft, despite the fact that these trade restrictions will only hurt legitimate recyclers.
  • Basel Convention and electronics amendments implementation: The 2023 conference of the parties (COP) and open-ended working group (OEWG) saw limited progress, though the COP did adopt technical guidelines on plastic products prior to the second session of the UN plastic pollution treaty negotiations in May. Much of the focus in 2023 was on the implementation of the electronics amendments, which will control trade in recycled electrical equipment beginning in January 2025. As the U.S. is a non-party to the Basel Convention, ISRI continues to push the U.S. government to facilitate Article 11 agreements, which allow for continued trade in Basel-controlled goods outside the Basel Convention prior informed consent (PIC) process. The U.S. currently has several Article 11 agreements, the most substantive through the OECD Council Decision. This year, the OECD has been tasked with incorporating the Basel electronics amendments into the Council Decision framework, as there was not unanimous approval among OECD members to fully incorporate the amendments. ISRI has been engaged with the U.S. government and various public and private sector stakeholders to support potential carveouts for high-value products from the OECD PIC process. The Japanese government has led these discussions and the OECD Task Team that is overseeing this process has yet to reach an agreement on a path forward to incorporate the Basel electronics amendments.
  • Plastics treaty negotiations: ISRI engaged with global policymakers and stakeholders during the UN plastic pollution treaty negotiations, which held two negotiating rounds in Paris and Nairobi. While the scope of the negotiations increases with each negotiating session, ISRI has met with U.S. government officials to ensure that the issues that affect the recycled materials industry are prioritized during these talks. ISRI’s priorities during these talks included: a focus on language addressing extended producer responsibility (EPR); minimum recycled content requirements for plastic products; designing products specifically for recycling; and trade in plastic products. Collaborating with organizations such as BIR, ISRI is ensuring that the recycled materials industry’s interests are well represented during these global discussions.

Proposed legislation and regulatory actions could dramatically change the way the U.S. handles recycling in the next few years, whether it’s through infrastructure investments, education, product bans or extended producer responsibility initiatives. Stay tuned for our next article on what ISRI will be tracking in 2024!