The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, generally regulates the disposal, management, and recycling of solid waste. Existing law requires all rigid plastic bottles and rigid plastic containers sold in the state to be labeled with a code that indicates the resin used to produce the rigid plastic bottle or rigid plastic container, and designates the number 6 as the code number for polystyrene resin.

This bill would enact the Expanded Polystyrene Food Service Packaging Recovery and Recycling Act, which would authorize expanded polystyrene food service packaging (PFP) manufacturers and polystyrene resin producers to form or designate an organization consisting of PFP manufacturers and resin producers, to be known as the Expanded Polystyrene Food Service Packaging Recycling Organization. If the PFP manufacturers and resin producers form or designate a PFP Recycling Organization, the bill would require each PFP manufacturer or resin producer that formed or designated the organization that sells expanded polystyrene food service packaging or polystyrene resin in this state to pay to the PFP Recycling Organization the expanded polystyrene food service packaging assessment fee, which the bill would require to be established in an amount reasonably anticipated to generate an unspecified number of dollars within the first year of the program. fee established by the PFP Recycling Organization. The bill would require the collected fees to be used by the organization to carry out the requirements of the act and for appropriate projects and programs that would further the purposes of the act, including awarding grants to public specified entities for programs designed to increase community access to PFP recycling, to promote efforts to recycle PFP, and to reduce or abate litter from PFP. The bill would impose civil penalties on the PFP manufacturers or resin producers that formed or designated the PFP Recycling Organization that fail to remit the PFP assessment fee, as specified, and would authorize the department to expend the civil penalty moneys to support its duties under the act.

The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, generally regulates the disposal, management, and recycling of solid waste. Existing law requires all rigid plastic bottles and rigid plastic containers sold in the state to be labeled with a code that indicates the resin used to produce the rigid plastic bottle or rigid plastic container, and designates the number 6 as the code number for polystyrene resin.

This bill would enact the Polystyrene Food Service Packaging Recovery and Recycling Act, which would authorize polystyrene food service packaging (PFP) manufacturers and polystyrene resin producers to form or designate an organization consisting of PFP manufacturers and resin producers, to be known as the Polystyrene Food Service Packaging Recycling Organization. If the PFP manufacturers and resin producers form or designate a PFP Recycling Organization, the bill would require each PFP manufacturer or resin producer that formed or designated the organization that sells polystyrene food service packaging or polystyrene resin in this state to pay to the PFP Recycling Organization the polystyrene food service packaging assessment fee, which the bill would require to be established in an amount reasonably anticipated to generate an unspecified number of dollars within the first year of the program. The bill would require the collected fees to be used by the organization to carry out the requirements of the act and for appropriate projects and programs that would further the purposes of the act, including awarding grants to public entities for programs designed to increase community access to PFP recycling, to promote efforts to recycle PFP, and to reduce or abate litter from PFP. The bill would impose civil penalties on the PFP manufacturers or resin producers that formed or designated the PFP Recycling Organization that fail to remit the PFP assessment fee, as specified, and would authorize the department to expend the civil penalty moneys to support its duties under the act.

Date of Hearing: April 23, 1018

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Al Muratsuchi, Acting Chair

ABPCA Bill Id:AB 2921 (

Author:Low) – As Amended Ver:April 5, 2018

SUBJECT: Expanded Polystyrene Food Service Packaging Recovery and Recycling Act

SUMMARY: Grants polystyrene food packaging manufacturers immunity from various anti-trust and unfair competition laws to allow them to pool resources for recycling and litter reduction grants, as specified.

EXISTING LAW:

1. Under the federal Clean Water Act requires the State Water Resources Control Board (SWRCB) to identify a list of impaired water-bodies and develop and implement Total Maximum Daily Loads (TMDLs) for impaired water bodies.
2. Regulates discharges of pollutants in storm water and urban runoff by regulating, through the National Pollution Discharge Elimination System (NPDES), industrial discharges and discharges through the municipal storm drain systems.
3. Under the Integrated Waste Management Act, requires each city or county to divert 50% of solid waste from landfill disposal or transformation on and after January 1, 2000. Establishes a statewide policy goal that not less than 75% of solid waste be source reduced, recycled, or composted on and after January 1, 2020.
   
4. Requires that all rigid plastic bottles and containers sold in California on and after January 1, 1992 have a molded label indicating the plastic resin used to produce the product.
   

THIS BILL establishes the Expanded Polystyrene Food Service Packaging (EPSFP) Recovery and Recycling Act, which:

1. States legislative findings and declares the intent of the Legislature to, among other things:
   1. Increase the amount of EPSFP waste that is being diverted from landfills and recycled into new products;
   2. Reduce the amount of EPSFP that is disposed of in landfills, littered, or improperly disposed of;
   3. Reduce the amount of litter affecting creeks and other waterways in California; and,
   4. Create incentives to increase the number of curbside recycling programs that accept EPSFP to:
      1. 30% in 5 years;
      2. 40% in 10 years;
      3. 50% in 15 years; and,
      4. 60% in 20 years.
2. Defines several terms used in the bill, including:
   1. "Expanded polystyrene food service packaging" as a container or other single-use food service packaging product that is labeled with resin code 6, pursuant to the Rigid Plastic Packaging Container law, that is used by food service providers to carry or contain food and beverages that are prepared onsite for customer consumption offsite; and,
   2. "[EPSFP] manufacturer" as a person or entity that manufactures EPSFP that is sold, offered for sale, or distributed for use in the state. If EPSFP is manufactured by an out-of-state entity, defines "manufacturer" as the person or entity that imports it.
3. Authorizes EPSFP manufacturers to voluntarily form or designate the Expanded Polystyrene Food Service Packaging Recycling Organization (Organization).
4. Requires the Organization to:
   1. Establish goals to increase the recycling of EPSFP, increase diversion of EPSFP from landfills, increase the recyclability of EPSFP, and incentivize market growth for products made from recycled EPSFP.
   2. Determine criteria for awarding grants and establish a grant award committee.
   3. Annually submit a report to the Department of Resources Recycling and Recovery (CalRecycle), SWRCB, and the Legislature.
   4. Establish an assessment fee to be paid by EPSFP manufacturers and resin producers that voluntarily join the Organization. Specifies that the Organization may adjust the assessment fee.
   5. Determine the rules and procedures necessary and proper to collect the assessment fee in a fair, efficient, and lawful manner.
   6. Collect assessment fees to be expended for projects that are consistent with the goals of the bill, including, but not limited to, investments in infrastructure that promote the recycling of EPSFP.
   7. Provide grants for programs including, but not limited to:
      1. Increasing community recycling rates;
      2. Promoting efforts to recycle EPSFP; and,
      3. Programs designed to reduce or abate litter from EPSFP.
5. Specifies that grants are only available to the following entities:
   1. Public entities with jurisdiction over the collection of solid waste and recyclables;
   2. Private entities engaged in collecting, sorting, or processing solid waste or recyclables if those entities apply in collaboration with an eligible jurisdiction; and,
   3. Entities that reclaim recycled EPSFP in the postconsumer market.
6. Prohibits any public entity that has an ordinance restricting or prohibiting the use of EPSFP from applying for or receiving grant funding.
7. Exempts the Organization's activities from the Cartwright Act, Unfair Practices Act, and Unfair Competition Law, as specified.
8. Requires CalRecycle to conduct a hearing if any EPSFP manufacturer wishes to contest the assessment fee, as specified.
9. Requires that 75% of the grants be awarded for one or more of the following:
   1. Creating or expanding residential curbside programs that accept EPSFP;
   2. Developing or improving a materials recovery facility to enable the collection of EPSFP for recycling;
   3. Developing or improving equipment or technology designed to recycle EPSFP; and,
   4. Developing or improving end markets for recycled EPSFP.
10. Requires that the remaining 25% of the grants be awarded for one or more of the following purposes:
    1. Organizing or conducting litter reduction programs in places impacted by EPSFP; and,
    2. Organizing and conducting litter abatement programs in places impacted by EPSFP, including, but not limited to, programs to remove litter from creeks and other waterways.
11. Requires CalRecycle to enforce the collection of the assessment fee. Requires CalRecycle to assess the fee and impose a civil penalty equal to twice the EPSFP owed. Exempts manufacturers who contest the fee assessment if they request a hearing with CalRecycle from these enforcement provisions.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author statement:

In the past decade, local governments have invested in a comprehensive system for the collection of materials for recycling and composting, and residents have responded by diverting 40%-75% of materials targeted for recycling. Currently, with some exceptions, food service packaging has not been included in this system mainly due to cost and market uncertainty. However, the trend of recycling in California demonstrates that both of these so-called "barriers to recycling" can be readily resolved when material producers and their customers support and invest in recycling. For example, in Los Angeles, a materials recovery facility is using optical sortation technology to process expanded and solid polystyrene into bales, which are then sold domestically for prices that exceed mixed paper, mixed plastics, and glass. According to data by the Foodservice Packaging Institute, approximately two-thirds of food packaging goes back to the consumer’s residence, which makes it imperative to create an infrastructure through curbside recycling to capture the product at the source point.

AB 2921 builds off of this existing infrastructure. Specifically, it authorizes polystyrene food packaging manufacturers and polystyrene resin producers to form the Polystyrene Food Service Packaging Recycling Organization. The organization will be comprised of manufacturers and producers who will assess a fee on themselves to help fund grants which will be allocated to public entities for programs designed to increase community access to [EPSFP] recycling, to promote efforts to recycle [EPSFP] and to reduce or abate litter.

1. Meeting the state’s recycling goals. CalRecycle is tasked with diverting at least 75% of solid waste statewide by 2020. Organic materials make up one-third of the waste stream and food continues to be the greatest single item disposed, comprising approximately 18% of materials landfilled. Overall, plastic is just over 10% of California's waste stream; aside from polyethylene terephthalate (PETE) (0.6%) and high-density polyethylene (HDPE) containers (0.5%), all other plastic containers, including food containers, comprise only 0.6% of the state's waste stream. EPSFP is not specifically accounted for in the state's waste characterization studies.
   
   Local governments are required to submit Source Reduction and Recycling Elements and comprehensive annual reports to CalRecycle to identify the programs and plans to ensure they meet the state's 50% diversion requirement for local jurisdictions and to assist CalRecycle in meeting the state's 75% diversion goal. Pursuant to AB 341 (Chesbro), Chapter 476, Statutes of 2011, generators are required to arrange for recycling services and local governments are required to implement commercial solid waste recycling programs designed to divert solid waste from businesses. AB 1826 (Chesbro), Chapter 727, Statutes of 2014, requires generators of specified amounts of organic waste (i.e., food waste and yard waste) to arrange for recycling services for that material.

The state has adopted expanded producer responsibility (EPR) programs for a number of products, including mattresses, electronic waste, and carpet. EPR refers to comprehensive product stewardship programs designed to minimize the health, safety, and environmental impacts from a product while maximizing the economic benefits of a product throughout its lifecycle. EPR programs place responsibility for the post-consumer management of the product on the manufacturer. EPR can be an effective mechanism to manage materials that are challenging to manage in the solid waste stream.

1. Plastic seas. Plastics, including expanded polystyrene (EPS), are estimated to comprise 60-80% of all marine debris and 90% of all floating debris, which includes expanded polystyrene (EPS). According to the California Coastal Commission (Commission), the primary source of marine debris is urban runoff (i.e., litter). By 2050, by weight there will be more plastic than fish in the ocean if we keep producing (and failing to properly manage) plastics at predicted rates, according to The New Plastics Economy: Rethinking the Future of Plastics, a January, 2016 report by the World Economic Forum.

Due to the interplay of ocean currents, marine debris preferentially accumulates in certain areas throughout the ocean. According to Eriksen et al. (2014), 24 expeditions from 2007-2013 estimated that there are approximately 96,400 metric tons of floating plastic in the Northern Pacific Ocean. The North Pacific Central Gyre is the ultimate destination for much of the marine debris originating from the California coast. A study by the Algalita Marine Research Foundation found an average of more than 300,000 plastic pieces per square mile of the Gyre and that the mass of plastic was six times greater than zooplankton floating on the water’s surface.

Most plastic marine debris exists as small plastic particles due to excessive UV radiation exposure and subsequent photo-degradation. EPS breaks down more rapidly into these smaller particles than rigid plastics. These plastic pieces are confused with small fish, plankton, or krill and ingested by birds and marine animals. Over 600 marine animal species have been negatively affected by ingesting plastic worldwide. Last year, scientists at the Australian Research Council Centre of Excellence for Coral Reef Studies at James Cook University found that corals are also ingesting small plastic particles, which remain in their small stomach cavities and impede their ability to consume and digest normal food.

In addition to the physical impacts of plastic pollution, hydrophobic chemicals present in the ocean in trace amounts (e.g., from contaminated runoff and oil and chemical spills) have an affinity for, and can bind to, plastic particles where they enter and accumulate in the food chain.

California Coastal Cleanup Day was first organized by the Commission in 1985. The Commission continues to organize the event annually and track the items collected. According to the Commission, the top ten items collected since 1984 are cigarette butts; food wrappers and containers; caps and lids; bags; cups, plates, and utensils; straws; glass bottles; plastic bottles; cans; and, construction material. Food wrappers and containers account for just over 10% of the material cleaned up.

In 2007, the Ocean Protection Council (OPC) adopted a resolution on "reducing and preventing marine debris." A year later, OPC released the Implementation Strategy for the [OPC] Resolution to Reduce and Prevent Ocean Litter, which established four broad objectives to reduce marine debris: 1) Reduce single-use packaging and promote sustainable alternatives; 2) Prevent and control litter and plastic debris; 3) Clean up and remove ocean litter; and, 4) Coordinate with other jurisdictions in the Pacific region.

1. United Nations Resolution. A United Nations resolution was drafted in 2017 to create legally binding marine plastic pollution targets. Opposition to the targets, primarily from the United States and China, forced a deal that replaced the targets with non-binding language urging all actors to "step up actions by 2025, prevent and significantly reduce marine pollution of all kinds" and "encourages member states to prioritize policies [that] avoid marine litter and microplastic entering the marine environment." Resolution 72/72, Oceans and the Law of the Sea, was signed by all 193 members of the United Nations in December 2017.
   
2. Economic impacts to California. A National Oceanic and Atmospheric Administration Marine Debris Program economic study published in 2014 examined the costs of marine debris to Californians. The study focused on Orange County, and found that residents lose millions of dollars each year avoiding littered, local beaches in favor of choosing cleaner beaches that are father away and more costly to reach. In one scenario, the study found that reducing marine debris by just 25% would save Orange County residents $32 million in June-August; eliminating marine debris entirely, that savings reaches an estimated $148 million.

As required by the federal Clean Water Act, SWRCB has adopted TMDL limits for impacted waterbodies. A TMDL is the calculation of the maximum amount of a pollutant, including trash, allowed to enter a waterbody so that the waterbody meets water quality standards for that particular pollutant.

A 2013 report produced for the Natural Resources Defense Council by Keir Associates estimates that Californians are shouldering $428 million annually to try to prevent litter from becoming marine debris that damages the environment, tourism, and other economic activities. Specific examples include:

• 1. Los Angeles spends $9.50 per person, for a total of over $36.3 million annually;
  2. San Diego spends $10.84 per person, for a total of $14.1 million annually;
  3. The community of Commerce in Los Angeles County spends $69 per person, for a total of $890,000 annually; and,
  4. Long Beach spends $28 per person, for a total of nearly $13 million annually.
     

1. Local actions. In an attempt to mitigate the environmental and economic impacts of illegally disposed EPSFP and comply with TMDL requirements, over 100 local governments in California have EPSFP bans. Additionally, 13 jurisdictions have banned EPSFP in government facilities. This bill prohibits these 115 jurisdictions from receiving grants awarded by the Organization, including the counties of Los Angeles, Monterey, Santa Clara, Santa Cruz, and Ventura, and the cities of Carmel, Manhattan Beach, Marina, Monterey, San Jose, Santa Cruz, and Scotts Valley.
   
2. Market challenges. Markets for recycled plastic are challenged by low oil prices, which make virgin plastic economically preferable to recycled. The US has not developed significant markets for recycled content materials, including plastic. Historically, China has been the largest importer of recycled materials, including nearly half of US recycled plastic exports. According to the International Solid Waste Association, China accepted 56% by weight of global recycled plastic exports.
   
   In an effort to improve the quality of the materials it accepts and to combat the country's significant environmental challenges, China enacted Operation Green Fence in 2013, under which it increased inspections of imported bales and returned bales that did not meet specified requirements at exporters' expense. In 2017, China established Operation National Sword, which included additional inspections of imported recycled materials and a filing with the World Trade Organization indicating its intent to ban the import of 24 types of scrap, including polyethylene terephthalate (PET), polyethylene (PE), polyvinyl chloride (PVC), and polystyrene (PS) beginning January 1, 2018. In November, China announced that imports of recycled materials that are not banned will have to include no more than 0.5% contamination. Some market experts are hopeful that cleaner plastic materials, including those included in the ban, may be allowed in the future.
   
   These actions are creating serious challenges for California's recyclers. Recycling requires markets to create new products and close the loop. Separating EPS from the waste stream for recycling does not encourage markets to use the recycled material. While limited markets exist for EPS, most only accept clean EPS like the material used in product packaging; even fewer markets exist for recycled food contaminated EPS, which is more expensive to process and faces challenges to remove the waste food residues and odors.
   
3. Missing the mark. This bill is focused on increasing the number of curbside recycling programs that accept EPSFP. Plastic containers in total (not limited to food containers) comprise only 1.7% of California's waste stream; excluding PETE and HDPE brings the total number of plastic containers to 0.6% of the waste stream. Much of the focus of recent recycling efforts has been directed toward reducing GHG emissions from landfills, which is produced by the organic materials like food, paper, and green waste. Organic materials also comprise 54.8% of the waste stream, so focusing efforts on this portion of the waste stream will help the state achieve its strong recycling and GHG reduction goals.
   
   Local and legislative actions directed toward take-out food packaging are inspired by the significant environmental and economic impacts of littering these items, which make it difficult for local governments to meet TMDL requirements and contributes to plastics washing into the ocean. While recycling programs can provide a number of environmental benefits, non-deposit programs do little to reduce litter. Litter is caused by individuals improperly disposing of their waste; increasing recycling will not affect this behavior pattern. Increasing the number of curbside recycling programs that accept EPSFP would not reduce littering.
   
4. This bill. AB 2921 grants EPSFP manufacturers immunity from various anti-trust and unfair competition laws to allow them to pool resources to fund recycling and litter reduction grants. The bill directs that 75% of the funds collected be used to fund residential curbside programs, infrastructure development for recycling, and market development for recycled EPSFP and directs that 25% of the funds to be used for litter reduction and litter abatement programs in jurisdictions that have not adopted an ordinance relating to EPSFP.
   
   This bill requires the Organization to annually report to CalRecycle, but does not specify the purpose or content of the report. Additionally, this bill requires CalRecycle to enforce the collection of the manufacturer fees from manufacturers that voluntarily join the Organization. It is not clear how CalRecycle would be able to enforce the collection of fees that are not remitted to CalRecycle for a program over which CalRecycle has no authority; Organization members who contest the fee by requesting a hearing are exempt from the bill's enforcement provisions. CalRecycle is also required to hold a hearing if any member of the Organization wishes to contest the assessment fee; it is not clear what CalRecycle's role in this hearing would be as it does not have any authority over the Organization's membership or the amount of the fee.
   
   This bill creates a voluntary EPR-like program for EPSFP; however, this bill lacks the hallmarks of successful EPR programs. A successful EPR program for EPSFP would require the manufacturers to take responsibility for the collection and recycling of the material they generate and would focus on strong and enforceable timelines and recycling goals, such as establishing a mandatory recycling rate for PFP material by a specified date rather than a goal focused on modest increases in the percentage of curbside recycling programs that accept PFP over a twenty year time frame. As noted previously, EPSFP is not effective at controlling litter.
   
   Effective statutory EPR programs also include state oversight, enforcement, and audit authority. The bills that have been passed by the Legislature also include independent auditing requirements to ensure that the funds collected are managed and expended appropriately and in accordance with the law. This bill exempts PFP manufacturers from state anti-trust, unfair business practices, and unfair competition laws, with the exception of an agreement that would fix the prices for PFP, fix the output of PFP, or restrict the geographic area in which PFP will be sold, but does not require any auditing or state oversight of the program.
5. Related legislation.
   
   AB 1659 (Low) establishes the Food Service Plastic Packaging Recovery and Recycling Stewardship Act, which creates an EPR for food packaging, with a goal of increasing the number of curbside programs that accept this material. This bill was held in the Assembly Natural Resources Committee at the request of the author.
   
   SB 705 (Allen) enacts the Ocean Pollution Reduction Act of 2017, which prohibits a food vendor, as defined, from dispensing prepared food to a customer in an expanded polystyrene food service container, as defined. Chain establishments are subject to the ban on January 1, 2020; the ban goes into effect for others by January 1, 2022. A city or county may grant an exemption from the ban to a food vendor who demonstrates that the ban will impose an undue economic hardship, and also exempts state hospitals, correctional facilities, and school campuses. This bill was held on the Senate Floor.

REGISTERED SUPPORT / OPPOSITION:

Support

A Voice for Choice Advocacy
American Chemistry Council
American Styrenics
Association of Plastic Recyclers

California State Association of Electrical Workers/IBEW Local 11
California Business Roundtable

California Restaurant Association
California Retailers Association
Dart Container Corporation
Educate. Advocate.
Empower Family California Foodservice Packaging Institute

Plastic Recycling

Tracy Material Recovery

Opposition

5 Gyres Institute
Alameda County Supervisor Richard Valle

Algalita Marine Research and Education

Audubon California
Azul

California Coastkeeper Alliance
California League of Conservation Voters

California Product Stewardship Council
California Resource Recovery Association
Californians Against Waste

Center for Environmental Health

Center for Oceanic Awareness, Research, and Education

City of Torrance

Clean River Alliance

Clean Water Action

Ecology Action

Environment California
Environmental Working Group

Friends Committee on Legislation of California

Friends of the Earth – US

Global Alliance for Incinerator Alternatives

Heal the Bay

Los Angeles Alliance for a New Economy

Los Angeles City Council Member Paul Koretz
Marin County Hazardous and Solid Waste Management Joint Powers Authority

Marin Sanitary Service
National Parks Conservation Association
National Stewardship Action Council
Natural Resource Defense Council
Northern California Recycling Association

ORV Alguita, Inc.

Plastic Pollution Coalition

Republic Services

Rethink Waste
Save Our Shores
Seventh Generation Advisors
Sierra Club California

Solid Waste Association of North America

Sonoma County Waste Management Agency

StopWaste

Story of Stuff Project

Surfrider Foundation

Sustain LA

The Last Plastic Straw

Tri-CED Community Recycling

Trust for Public Land
UPSTREAM Policy

Valley Improvement Projects

WILDCOAST

Wishtoyo Chumash Foundation

Zero Waste USA

1 Individual

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /

Date of Hearing: April 16, 1018

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Al Muratsuchi, Acting Chair

ABPCA Bill Id:AB 2921 (

Author:Low) – As Amended Ver:April 5, 2018

SUBJECT: Expanded Polystyrene Food Service Packaging Recovery and Recycling Act

SUMMARY: Grants polystyrene food packaging manufacturers immunity from various anti-trust and unfair competition laws to allow them to pool resources for recycling and litter reduction grants, as specified.

EXISTING LAW:

1. Under the federal Clean Water Act requires the State Water Resources Control Board (SWRCB) to identify a list of impaired water-bodies and develop and implement Total Maximum Daily Loads (TMDLs) for impaired water bodies.
2. Regulates discharges of pollutants in storm water and urban runoff by regulating, through the National Pollution Discharge Elimination System (NPDES), industrial discharges and discharges through the municipal storm drain systems.
3. Under the Integrated Waste Management Act, requires each city or county to divert 50% of solid waste from landfill disposal or transformation on and after January 1, 2000. Establishes a statewide policy goal that not less than 75% of solid waste be source reduced, recycled, or composted on and after January 1, 2020.
   
4. Requires that all rigid plastic bottles and containers sold in California on and after January 1, 1992 have a molded label indicating the plastic resin used to produce the product.
   

THIS BILL establishes the Expanded Polystyrene Food Service Packaging (EPSFP) Recovery and Recycling Act, which:

1. States legislative findings and declares the intent of the Legislature to, among other things:
   1. Increase the amount of EPSFP waste that is being diverted from landfills and recycled into new products;
   2. Reduce the amount of EPSFP that is disposed of in landfills, littered, or improperly disposed of;
   3. Reduce the amount of litter affecting creeks and other waterways in California; and,
   4. Create incentives to increase the number of curbside recycling programs that accept EPSFP to:
      1. 30% in 5 years;
      2. 40% in 10 years;
      3. 50% in 15 years; and,
      4. 60% in 20 years.
2. Defines several terms used in the bill, including:
   1. "Expanded polystyrene food service packaging" as a container or other single-use food service packaging product that is labeled with resin code 6, pursuant to the Rigid Plastic Packaging Container law, that is used by food service providers to carry or contain food and beverages that are prepared onsite for customer consumption offsite; and,
   2. "[EPSFP] manufacturer" as a person or entity that manufactures EPSFP that is sold, offered for sale, or distributed for use in the state. If EPSFP is manufactured by an out-of-state entity, defines "manufacturer" as the person or entity that imports it.
3. Authorizes EPSFP manufacturers to voluntarily form or designate the Expanded Polystyrene Food Service Packaging Recycling Organization (Organization).
4. Requires the Organization to:
   1. Establish goals to increase the recycling of EPSFP, increase diversion of EPSFP from landfills, increase the recyclability of EPSFP, and incentivize market growth for products made from recycled EPSFP.
   2. Determine criteria for awarding grants and establish a grant award committee.
   3. Annually submit a report to the Department of Resources Recycling and Recovery (CalRecycle), SWRCB, and the Legislature.
   4. Establish an assessment fee to be paid by EPSFP manufacturers and resin producers that voluntarily join the Organization. Specifies that the Organization may adjust the assessment fee.
   5. Determine the rules and procedures necessary and proper to collect the assessment fee in a fair, efficient, and lawful manner.
   6. Collect assessment fees to be expended for projects that are consistent with the goals of the bill, including, but not limited to, investments in infrastructure that promote the recycling of EPSFP.
   7. Provide grants for programs including, but not limited to:
      1. Increasing community recycling rates;
      2. Promoting efforts to recycle EPSFP; and,
      3. Programs designed to reduce or abate litter from EPSFP.
5. Specifies that grants are only available to the following entities:
   1. Public entities with jurisdiction over the collection of solid waste and recyclables;
   2. Private entities engaged in collecting, sorting, or processing solid waste or recyclables if those entities apply in collaboration with an eligible jurisdiction; and,
   3. Entities that reclaim recycled EPSFP in the postconsumer market.
6. Prohibits any public entity that has an ordinance restricting or prohibiting the use of EPSFP from applying for or receiving grant funding.
7. Exempts the Organization's activities from the Cartwright Act, Unfair Practices Act, and Unfair Competition Law, as specified.
8. Requires CalRecycle to conduct a hearing if any EPSFP manufacturer wishes to contest the assessment fee, as specified.
9. Requires that 75% of the grants be awarded for one or more of the following:
   1. Creating or expanding residential curbside programs that accept EPSFP;
   2. Developing or improving a materials recovery facility to enable the collection of EPSFP for recycling;
   3. Developing or improving equipment or technology designed to recycle EPSFP; and,
   4. Developing or improving end markets for recycled EPSFP.
10. Requires that the remaining 25% of the grants be awarded for one or more of the following purposes:
    1. Organizing or conducting litter reduction programs in places impacted by EPSFP; and,
    2. Organizing and conducting litter abatement programs in places impacted by EPSFP, including, but not limited to, programs to remove litter from creeks and other waterways.
11. Requires CalRecycle to enforce the collection of the assessment fee. Requires CalRecycle to assess the fee and impose a civil penalty equal to twice the EPSFP owed. Exempts manufacturers who contest the fee assessment if they request a hearing with CalRecycle from these enforcement provisions.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author statement:

In the past decade, local governments have invested in a comprehensive system for the collection of materials for recycling and composting, and residents have responded by diverting 40%-75% of materials targeted for recycling. Currently, with some exceptions, food service packaging has not been included in this system mainly due to cost and market uncertainty. However, the trend of recycling in California demonstrates that both of these so-called "barriers to recycling" can be readily resolved when material producers and their customers support and invest in recycling. For example, in Los Angeles, a materials recovery facility is using optical sortation technology to process expanded and solid polystyrene into bales, which are then sold domestically for prices that exceed mixed paper, mixed plastics, and glass. According to data by the Foodservice Packaging Institute, approximately two-thirds of food packaging goes back to the consumer’s residence, which makes it imperative to create an infrastructure through curbside recycling to capture the product at the source point.

AB 2921 builds off of this existing infrastructure. Specifically, it authorizes polystyrene food packaging manufacturers and polystyrene resin producers to form the Polystyrene Food Service Packaging Recycling Organization. The organization will be comprised of manufacturers and producers who will assess a fee on themselves to help fund grants which will be allocated to public entities for programs designed to increase community access to [EPSFP] recycling, to promote efforts to recycle [EPSFP] and to reduce or abate litter.

1. Meeting the state’s recycling goals. CalRecycle is tasked with diverting at least 75% of solid waste statewide by 2020. Organic materials make up one-third of the waste stream and food continues to be the greatest single item disposed, comprising approximately 18% of materials landfilled. Overall, plastic is just over 10% of California's waste stream; aside from polyethylene terephthalate (PETE) (0.6%) and high-density polyethylene (HDPE) containers (0.5%), all other plastic containers, including food containers, comprise only 0.6% of the state's waste stream. EPSFP is not specifically accounted for in the state's waste characterization studies.
   
   Local governments are required to submit Source Reduction and Recycling Elements and comprehensive annual reports to CalRecycle to identify the programs and plans to ensure they meet the state's 50% diversion requirement for local jurisdictions and to assist CalRecycle in meeting the state's 75% diversion goal. Pursuant to AB 341 (Chesbro), Chapter 476, Statutes of 2011, generators are required to arrange for recycling services and local governments are required to implement commercial solid waste recycling programs designed to divert solid waste from businesses. AB 1826 (Chesbro), Chapter 727, Statutes of 2014, requires generators of specified amounts of organic waste (i.e., food waste and yard waste) to arrange for recycling services for that material.

The state has adopted expanded producer responsibility (EPR) programs for a number of products, including mattresses, electronic waste, and carpet. EPR refers to comprehensive product stewardship programs designed to minimize the health, safety, and environmental impacts from a product while maximizing the economic benefits of a product throughout its lifecycle. EPR programs place responsibility for the post-consumer management of the product on the manufacturer. EPR can be an effective mechanism to manage materials that are challenging to manage in the solid waste stream.

1. Plastic seas. Plastics, including expanded polystyrene (EPS), are estimated to comprise 60-80% of all marine debris and 90% of all floating debris, which includes expanded polystyrene (EPS). According to the California Coastal Commission (Commission), the primary source of marine debris is urban runoff (i.e., litter). By 2050, by weight there will be more plastic than fish in the ocean if we keep producing (and failing to properly manage) plastics at predicted rates, according to The New Plastics Economy: Rethinking the Future of Plastics, a January, 2016 report by the World Economic Forum.

Due to the interplay of ocean currents, marine debris preferentially accumulates in certain areas throughout the ocean. According to Eriksen et al. (2014), 24 expeditions from 2007-2013 estimated that there are approximately 96,400 metric tons of floating plastic in the Northern Pacific Ocean. The North Pacific Central Gyre is the ultimate destination for much of the marine debris originating from the California coast. A study by the Algalita Marine Research Foundation found an average of more than 300,000 plastic pieces per square mile of the Gyre and that the mass of plastic was six times greater than zooplankton floating on the water’s surface.

Most plastic marine debris exists as small plastic particles due to excessive UV radiation exposure and subsequent photo-degradation. EPS breaks down more rapidly into these smaller particles than rigid plastics. These plastic pieces are confused with small fish, plankton, or krill and ingested by birds and marine animals. Over 600 marine animal species have been negatively affected by ingesting plastic worldwide. Last year, scientists at the Australian Research Council Centre of Excellence for Coral Reef Studies at James Cook University found that corals are also ingesting small plastic particles, which remain in their small stomach cavities and impede their ability to consume and digest normal food.

In addition to the physical impacts of plastic pollution, hydrophobic chemicals present in the ocean in trace amounts (e.g., from contaminated runoff and oil and chemical spills) have an affinity for, and can bind to, plastic particles where they enter and accumulate in the food chain.

California Coastal Cleanup Day was first organized by the Commission in 1985. The Commission continues to organize the event annually and track the items collected. According to the Commission, the top ten items collected since 1984 are cigarette butts; food wrappers and containers; caps and lids; bags; cups, plates, and utensils; straws; glass bottles; plastic bottles; cans; and, construction material. Food wrappers and containers account for just over 10% of the material cleaned up.

In 2007, the Ocean Protection Council (OPC) adopted a resolution on "reducing and preventing marine debris." A year later, OPC released the Implementation Strategy for the [OPC] Resolution to Reduce and Prevent Ocean Litter, which established four broad objectives to reduce marine debris: 1) Reduce single-use packaging and promote sustainable alternatives; 2) Prevent and control litter and plastic debris; 3) Clean up and remove ocean litter; and, 4) Coordinate with other jurisdictions in the Pacific region.

1. United Nations Resolution. A United Nations resolution was drafted in 2017 to create legally binding marine plastic pollution targets. Opposition to the targets, primarily from the United States and China, forced a deal that replaced the targets with non-binding language urging all actors to "step up actions by 2025, prevent and significantly reduce marine pollution of all kinds" and "encourages member states to prioritize policies [that] avoid marine litter and microplastic entering the marine environment." Resolution 72/72, Oceans and the Law of the Sea, was signed by all 193 members of the United Nations in December 2017.
   
2. Economic impacts to California. A National Oceanic and Atmospheric Administration Marine Debris Program economic study published in 2014 examined the costs of marine debris to Californians. The study focused on Orange County, and found that residents lose millions of dollars each year avoiding littered, local beaches in favor of choosing cleaner beaches that are father away and more costly to reach. In one scenario, the study found that reducing marine debris by just 25% would save Orange County residents $32 million in June-August; eliminating marine debris entirely, that savings reaches an estimated $148 million.

As required by the federal Clean Water Act, SWRCB has adopted TMDL limits for impacted waterbodies. A TMDL is the calculation of the maximum amount of a pollutant, including trash, allowed to enter a waterbody so that the waterbody meets water quality standards for that particular pollutant.

A 2013 report produced for the Natural Resources Defense Council by Keir Associates estimates that Californians are shouldering $428 million annually to try to prevent litter from becoming marine debris that damages the environment, tourism, and other economic activities. Specific examples include:

• 1. Los Angeles spends $9.50 per person, for a total of over $36.3 million annually;
  2. San Diego spends $10.84 per person, for a total of $14.1 million annually;
  3. The community of Commerce in Los Angeles County spends $69 per person, for a total of $890,000 annually; and,
  4. Long Beach spends $28 per person, for a total of nearly $13 million annually.
     

1. Local actions. In an attempt to mitigate the environmental and economic impacts of illegally disposed EPSFP and comply with TMDL requirements, over 100 local governments in California have EPSFP bans. Additionally, 13 jurisdictions have banned EPSFP in government facilities. This bill prohibits these 115 jurisdictions from receiving grants awarded by the Organization, including the counties of Los Angeles, Monterey, Santa Clara, Santa Cruz, and Ventura, and the cities of Carmel, Manhattan Beach, Marina, Monterey, San Jose, Santa Cruz, and Scotts Valley.
   
2. Market challenges. Markets for recycled plastic are challenged by low oil prices, which make virgin plastic economically preferable to recycled. The US has not developed significant markets for recycled content materials, including plastic. Historically, China has been the largest importer of recycled materials, including nearly half of US recycled plastic exports. According to the International Solid Waste Association, China accepted 56% by weight of global recycled plastic exports.
   
   In an effort to improve the quality of the materials it accepts and to combat the country's significant environmental challenges, China enacted Operation Green Fence in 2013, under which it increased inspections of imported bales and returned bales that did not meet specified requirements at exporters' expense. In 2017, China established Operation National Sword, which included additional inspections of imported recycled materials and a filing with the World Trade Organization indicating its intent to ban the import of 24 types of scrap, including polyethylene terephthalate (PET), polyethylene (PE), polyvinyl chloride (PVC), and polystyrene (PS) beginning January 1, 2018. In November, China announced that imports of recycled materials that are not banned will have to include no more than 0.5% contamination. Some market experts are hopeful that cleaner plastic materials, including those included in the ban, may be allowed in the future.
   
   These actions are creating serious challenges for California's recyclers. Recycling requires markets to create new products and close the loop. Separating EPS from the waste stream for recycling does not encourage markets to use the recycled material. While limited markets exist for EPS, most only accept clean EPS like the material used in product packaging; even fewer markets exist for recycled food contaminated EPS, which is more expensive to process and faces challenges to remove the waste food residues and odors.
   
3. Missing the mark. This bill is focused on increasing the number of curbside recycling programs that accept EPSFP. Plastic containers in total (not limited to food containers) comprise only 1.7% of California's waste stream; excluding PETE and HDPE brings the total number of plastic containers to 0.6% of the waste stream. Much of the focus of recent recycling efforts has been directed toward reducing GHG emissions from landfills, which is produced by the organic materials like food, paper, and green waste. Organic materials also comprise 54.8% of the waste stream, so focusing efforts on this portion of the waste stream will help the state achieve its strong recycling and GHG reduction goals.
   
   Local and legislative actions directed toward take-out food packaging are inspired by the significant environmental and economic impacts of littering these items, which make it difficult for local governments to meet TMDL requirements and contributes to plastics washing into the ocean. While recycling programs can provide a number of environmental benefits, non-deposit programs do little to reduce litter. Litter is caused by individuals improperly disposing of their waste; increasing recycling will not affect this behavior pattern. Increasing the number of curbside recycling programs that accept EPSFP would not reduce littering.
   
4. This bill. AB 2921 grants EPSFP manufacturers immunity from various anti-trust and unfair competition laws to allow them to pool resources to fund recycling and litter reduction grants. The bill directs that 75% of the funds collected be used to fund residential curbside programs, infrastructure development for recycling, and market development for recycled EPSFP and directs that 25% of the funds to be used for litter reduction and litter abatement programs in jurisdictions that have not adopted an ordinance relating to EPSFP.
   
   This bill requires the Organization to annually report to CalRecycle, but does not specify the purpose or content of the report. Additionally, this bill requires CalRecycle to enforce the collection of the manufacturer fees from manufacturers that voluntarily join the Organization. It is not clear how CalRecycle would be able to enforce the collection of fees that are not remitted to CalRecycle for a program over which CalRecycle has no authority; Organization members who contest the fee by requesting a hearing are exempt from the bill's enforcement provisions. CalRecycle is also required to hold a hearing if any member of the Organization wishes to contest the assessment fee; it is not clear what CalRecycle's role in this hearing would be as it does not have any authority over the Organization's membership or the amount of the fee.
   
   This bill creates a voluntary EPR-like program for EPSFP; however, this bill lacks the hallmarks of successful EPR programs. A successful EPR program for EPSFP would require the manufacturers to take responsibility for the collection and recycling of the material they generate and would focus on strong and enforceable timelines and recycling goals, such as establishing a mandatory recycling rate for PFP material by a specified date rather than a goal focused on modest increases in the percentage of curbside recycling programs that accept PFP over a twenty year time frame. As noted previously, EPSFP is not effective at controlling litter.
   
   Effective statutory EPR programs also include state oversight, enforcement, and audit authority. The bills that have been passed by the Legislature also include independent auditing requirements to ensure that the funds collected are managed and expended appropriately and in accordance with the law. This bill exempts PFP manufacturers from state anti-trust, unfair business practices, and unfair competition laws, with the exception of an agreement that would fix the prices for PFP, fix the output of PFP, or restrict the geographic area in which PFP will be sold, but does not require any auditing or state oversight of the program.
5. Related legislation.
   
   AB 1659 (Low) establishes the Food Service Plastic Packaging Recovery and Recycling Stewardship Act, which creates an EPR for food packaging, with a goal of increasing the number of curbside programs that accept this material. This bill was held in the Assembly Natural Resources Committee at the request of the author.
   
   SB 705 (Allen) enacts the Ocean Pollution Reduction Act of 2017, which prohibits a food vendor, as defined, from dispensing prepared food to a customer in an expanded polystyrene food service container, as defined. Chain establishments are subject to the ban on January 1, 2020; the ban goes into effect for others by January 1, 2022. A city or county may grant an exemption from the ban to a food vendor who demonstrates that the ban will impose an undue economic hardship, and also exempts state hospitals, correctional facilities, and school campuses. This bill was held on the Senate Floor.

REGISTERED SUPPORT / OPPOSITION:

Support

A Voice for Choice Advocacy
American Chemistry Council
American Styrenics
California Business Roundtable
California Restaurant Association
California Retailers Association
Dart Container Corporation
Educate. Advocate.
Empower Family California
Plastic Recycling

Opposition

5 Gyres Institute

Algalita Marine Research and Education

Audubon California
Azul

California Coastkeeper Alliance
California League of Conservation Voters

California Product Stewardship Council
California Resource Recovery Association
Californians Against Waste

Center for Oceanic Awareness, Research, and Education

Clean River Alliance

Clean Water Action

Ecology Action

Environment California
Environmental Working Group

Friends Committee on Legislation of California

Friends of the Earth – US

Global Alliance for Incinerator Alternatives

Heal the Bay

Los Angeles Alliance for a New Economy

Los Angeles City Council Member Paul Koretz
Marin County Hazardous and Solid Waste Management Joint Powers Authority
National Parks Conservation Association
National Stewardship Action Council
Natural Resource Defense Council

ORV Alguita, Inc.

Plastic Pollution Coalition

Republic Services

Rethink Waste
Save Our Shores
Seventh Generation Advisors
Sierra Club California

Sonoma County Waste Management Agency

StopWaste

Story of Stuff Project

Surfrider Foundation

Sustain LA

The Last Plastic Straw

Tri-CED Community Recycling

Trust for Public Land
UPSTREAM Policy

WILDCOAST

Wishtoyo Chumash Foundation

Zero Waste USA

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /