$2 billion is the estimated annual cost for CPG companies to comply with California’s packaging rules alone. When a senior packaging executive at a major food brand said that figure out loud at a 2025 industry summit, the room reportedly went very still.
That stillness is the sound of an old assumption collapsing. For decades, the unspoken deal between brands and municipalities was simple that the companies put packaging into the world, and local governments figured out what to do with it which was funded by taxpayer dollars. Extended Producer Responsibility (EPR) laws are ending that arrangement, methodically, state by state, country by country.
Seven States. One Seismic Shift.
As of mid-2025, there are already seven U.S. states that have passed EPR packaging legislation: Maine, Oregon, Colorado, California, Minnesota, Maryland, and Washington.
Maryland and Washington are the latest two, which passed the legislation as Maryland’s SB 901 on May 13, 2025. It was surprising even to those who track environmental policies very closely just how fast this development is taking place, considering how far behind Europe in this field America used to be.
It was Oregon that scored the first goal. Starting from July 1, 2025, Oregon has been the first state in America to start charging EPR fees to its producers. The non-payment of those fees is punishable by fines up to $25,000 per day. All the packaging material produced in Minnesota has to be either refillable, reusable, recyclable, or compostable starting from the year 2032. In a similar vein, the United Kingdom also started charging packaging producers for packaging collection in April 2025.
The Fee That Changes Everything: Ecomodulation
If EPR were merely a tax on packaging materials, most businesses would just pay the tax and get back to business. What makes such laws disruptive is that they contain a concept known as ecomodulation, which entails higher taxes on non-sustainable packaging and lower taxes on sustainable packages.
In Oregon, packaging is evaluated based on lifecycles and environments and a fee reduction on a packaging change can only occur if that change results in a decreased environmental impact score. Therefore, a company changing from clear to colored bottles may view this as being an insignificant change and yet may end up paying significantly more fees to produce this bottle through EPR under ecomodulation than they would if they switched to a clear recyclable bottle.
Counter to these examples, Colorado is using a post-consumer recycled content incentive program to help promote the use of post-consumer recycled content in current products. Finally, California’s SB 54 developed rules (revised for the final time in May 2025) around charging eco-modulation fees through their Producer Responsibility Organization (the Circular Action Alliance, or “CAA”).
Ecomodulation makes previously “cheap” packaging no longer “cheap” since the cost will now be calculated based on recyclability, recycled content and complexity of material. A multi-layer flexible pouch, which costs very little to manufacture, will now have a cost burden that completely offsets any initial advantages.
The practical consequence is that packaging decisions previously left to designers and procurement, requires input from experts in compliance, legal and sustainability as well. Brands that sell products in California must measure packaging in terms of 94 Covered Material Categories by packaging material and plastic. In Oregon, producers must provide supply information; in Colorado, the report was due on July 31, 2025. Fail to meet your deadline, and the penalties will quickly escalate.
Another area of pressure that is forming is that retailers are now holding the gate on brands. Already Amazon has started putting pressure on sellers in Germany and France to comply with EPR by requiring documentation to demonstrate EPR compliance, and if not, to remove those sellers from their retail sites. Therefore, as EPR is rolled out more broadly, it’s likely that this supplier dynamic will follow. Accordingly, brands that cannot prove their sustainable packaging decisions will find it increasingly difficult to access shelves both physically and digitally.
What this does is give businesses that are ready to take action early on, a rare chance to get ahead of the competition. Brands that redesign their packaging to use lighter materials, remove nuisance inks or adhesives and add post-consumer recycled content will not only mitigate their regulatory risk, but also provide themselves the potential to reduce their EPR fees. In relation to this, the EU Packaging and Packaging Waste Regulation (PPWR), which was enacted in February 2025, will take effect on 1st January 2030. Any packaging that does not achieve a 70% recyclability will be restricted from the market.
Frequently Asked Questions
Q: Does EPR only apply to large companies?
The typical threshold used in most EPR programs within states is that of small-producer exemptions that are based on revenue as well as packaging tonnage. For instance, the EPR program within the UK aims at producers that generate a minimum turnover of £2 million and that also produce packaging amounting to over 50 tons per year. However, firms whose packaged products are sold within such states having an active EPR program might be in scope despite being situated in other states.
Q: What is a Producer Responsibility Organization (PRO) and do I have to join one?
A PRO is a third-party organization responsible for handling the aggregate responsibilities of producers, including charging the required fees, collaborating with recycling systems, and reporting to the authorities. In the United States, in all those states where Extended Producer Responsibility programs are currently operational, Circular Action Alliance (CAA) has been made the PRO. It is essential that you be a member of the organization because this is how your fees will be charged and accounted for. Fee charging in Oregon via CAA started from July 2025 whereas in California, producer registration will begin from August 2025. Maryland, where the law came into effect on May 2025, permits more than one PROs.
Q: Is EPR coming to India and other Asian markets?
Absolutely and perhaps even faster than many brands expect. India, South Korea, and Indonesia are all moving forward with EPR systems that revolve around producer-funded take-back. Under the Plastic Waste Management Rules of India, the packaging industry, importers, and brand owners have EPR responsibilities, with the Central Pollution Control Board ensuring that compliance is maintained. In South Korea, there has been an existing EPR scheme for packaging products for over two decades, and it’s continually being strengthened. Brands should note that their EPR journey throughout Asia will be towards the globally applicable standard.
