If a new proposal moving through the legislature passes, Minnesota will require companies to pay for the recycling of packaging waste, among other things. HF 3577 and SF 3561 have had numerous hearings in both House and Senate Committees.

Called the Packaging Waste and Cost Reduction Act, the bill proposes the creation of one or multiple Producer Responsibility Organizations (PRO). This is a non-profit organization that will develop a stewardship plan (by 2028) under which producers —which includes manufacturers, importers, publishers, brand owners, and distributors of packaging material— will operate.

In essence, the PRO will ensure that certain waste reduction goals under the stewardship plan are met (through reuse, recycling, and composting of packaging waste). Producers will directly pay for costs associated with the stewardship program. In addition, producers will also be required to switch to selling packaging that is recyclable, reusable, and compostable.

Waste reduction goals

The bill requires that by 2033

  1. No less than 65 percent of eligible packaging waste is recycled or composted.
  2. At least 10 percent of eligible packaging materials are reused, with producers collecting back at least 90 percent of materials.
  3. The weight of packaging materials sold in Minnesota is 15 percent less than the levels identified during the initial assessment. A designated PRO will do an initial assessment after the bill passes.
  4. Eligible packaging material must contain at least 10 percent post-consumer recycled content

These goals are revised upward in 2038. The minimum recycling and composting rate in 2038 is 75 percent. The reuse rate for reusable materials is 20 percent, and producers must collect back at least 95 percent of the material. The weight of sold packaging must be 25 percent less than initially assessed. Moreover, any sold packaging must contain 30 percent of recyclable content. These targets could be further revised upward after 2038.

The bill does not estimate how much it would cost to reach these targets. Rather, the designated PRO is responsible for

  1. Developing methods to meet these targets.
  2. Coordinating with service providers (individuals and organizations providing waste collection, recycling, and composting services).
  3. Estimating fees to be charged to producers
  4. Collecting fees from producers based on how much packaging material they sell in the state.

PROs must also ensure that everyone in the state has access to drop-off collection sites.

The problem(s) with the bill

The bill specifically states that no person or entity other than producers will be responsible for covering the costs of the program. Realistically speaking, however, that’s unlikely going to be the case. Manufacturers, brand owners, importers, and shippers will likely shift those costs onto consumers. Not to mention that there are currently no cost estimates for this bill, costs which could very well be substantial.

A lot about this bill is new. So, nobody knows how aggressive the efforts taken to reach set targets would have to be. Or worse yet, if the targets are achievable. An initial assessment, which will be done after the bill passes, will provide more information.

Moreover, possibly due to the number of unknowns, PROs have been given substantial autonomy. This could potentially lead to regulatory overreach.

To divide costs fairly among producers, PROs will likely have to collect a lot of data from producers. This will likely add another layer of bookkeeping, raising costs for businesses.

This bill would also reduce flexibility for producers. After 2032, for example, producers can only sell packaging in Minnesota if it is recyclable, reusable, or capable of waste reduction. This leaves little room for private businesses to experiment with potentially more efficient waste reduction efforts.

The penalties for noncompliance with this proposal are also quite substantial. The first time that a producer fails to comply with requirements of a stewardship plan, for example, they would be liable for a $25,000 penalty per day of violation. For a second offense (if it happens within five years after the approval of the stewardship plan), the penalty rises to $50,000 per day of violation. The third subsequent occurrence incurs a penalty of up to $100,000 per day of violation.


Certainly, companies may have little incentive to control packaging waste. This bill, however, has no data indicating that the proposals it sets will be more beneficial than the status quo especially since recent recycling practices have been ineffective.

Given the extra requirements on companies to sell recyclable, compostable, and reusable packaging, however, it’s likely that costs will go up.

By how much will costs go up? Nobody knows, and no one can give an estimate. And that is perhaps the biggest problem with this proposal.

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