Oregon Recycling and Extended Producer Responsibility (EPR)

Oregon’s recently implemented Extended Producer Responsibility (EPR) policy is an ambitious attempt to incentivize recycling, but the complexity and opaqueness of the policy may create more harm than good. EPR programs have been passed in several states across the country in an attempt to reduce waste, promote the recycling and reuse of materials, and shift the cost of waste management back to the producers of the waste.

We previously suggested that a federal raw plastic excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. could efficiently incentivize the use of recycled materials, decrease waste, and fund local recycling programs. In lieu of any national programs, however, states have started to implement their own policies.

Oregon’s EPR is much more complex than a simple excise taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. on plastic. Producers must pay one of 60 different tax rates for different materials. Those rates are determined by the private entity that is also empowered to spend the revenues, and Oregon Administrative Rules consider the methodology used to determine the taxes producers pay to be proprietary and confidential.

The EPR program favored most by states is one that utilizes a Producer Responsibility Organization (PRO) to manage a defined set of EPR activities, often accompanied by a (tax) revenue target. A PRO is a non-governmental organization comprised entirely of representatives from producers whose products are covered under EPR policy. The PRO then uses recycled content criteria, sets rates and fees, collects fees from producers and distributors, and uses those fees to fund development, improvement, education, and marketing of recycling and processing services to establish responsible end markets for covered products. This is meant to keep those covered products circulating from production to recycling and back to production as much as possible via a circular economy.

In August 2021, Oregon lawmakers passed the Plastic Pollution and Recycling Modernization Act (PPRMA). The law made Oregon the first US state to adopt a comprehensive EPR framework for packaging and paper products. The Circular Action Alliance (CAA) was approved as Oregon’s sole EPR program PRO in 2023.

CAA is the nation’s largest PRO, acting as the state-approved PRO in California, Colorado, Maryland, Minnesota, Oregon, and Washington. CAA developed and revised Oregon’s EPR program plan, including fee structures, collection system improvements, and recycling targets. CAA finalized Oregon’s EPR program requirements in 2024, though rules continue to change.

Beginning in 2025, distributors and manufacturers were required to join the PRO and begin paying fees based on the type and recyclability of their packaging. In total, CAA expects to collect roughly than $190 million in fees in the first year, growing to nearly $300 million in year three of the program. Some of these revenues are remitted to the state for administration, but most are spent directly by CAA to implement the PPRMA.

CAA sets fees on 60 materials, including paper, glass, aluminum, steel, plastic, and wood products. Rates range from $0.05 per pound for paper products to $1.38 per pound for rigid plastic foam containers and cushioning. Most producers of covered products are required to join the PRO and pay the fees. Smaller producers with less than $10 million in gross revenue, or those that sell less than 5 metric tons of covered products per year, can opt for a flat fee of between $1,200 and $5,800 based on weighted tons of material. Small producers with less than $5 million in gross annual revenue or with less than 1 metric ton of covered products produced per year are exempt.

We provide an expanded table of all CAA’s fees and rates in Table 1. The fees are also subject to discounts according to a different table of bonuses and incentives.

The PPRMA mandates an incredibly complex system of requirements, goals, and timelines. These complexities are in addition to Oregon’s existing extensive legislation surrounding solid waste recovery generally and eight separate responsibility programs for other products.

The PPRMA covers everything from the basics of how to determine who the “producer” of covered products is to the requirements of the PRO fee structure and Diversity, Equity, and Inclusion mandates for the recycling industry. The minutiae have consequences. For instance, CAA and Oregon’s Department of Environmental Quality (DEQ) have conflicted on whether garbage bags should count as “packaging.” Including garbage bags increases the amount of additional packaging that must be recycled (by about 5,000 tons) to meet a separate 25 percent statewide recycling goal by 2028.

Overall, this system is neither simple nor transparent. The DEQ-approved Program Plan from the CAA is nearly 400 pages—without the confidential portions. The CAA publicizes its rates, but keeps the methodology used to determine them confidential.

CAA is obligated to comply with statutory requirements for the fee structure. It must differentiate between types and forms of materials and ensure that they are proportional to the cost of their handling. The fees must be graduated to incentivize producers to change their production methods and calibrated to fund the PRO’s financial obligations under the PPRMA.

So, instead of justifying rates based on relative harms to society, the CAA must begin with a “State Budget” or revenue target and then work backward based on the costs of handling the materials and the amount of material shipped into the state to determine the rates needed to hit its revenue target. This approach doesn’t reflect the economic justifications for imposing excise taxes on production materials.

Utilizing a well-structured PRO has attractive features from a policy standpoint. It incentivizes those impacted by EPR policies to voice their opinions on those policies. Producers can also use their knowledge about production and the use of recycled materials to shape recycling policy. However, a poorly structured PRO also incentivizes those same producers to shift the costs and burdens of EPR policy to their competitors and other producers who have less or zero influence in the PRO. Limiting PRO board membership to the few largest producers enables cartelization rather than facilitating administration.

Perhaps unsurprisingly, Oregon’s EPR program was quickly challenged in court. In July 2025, the National Association of Wholesaler-Distributors (NAW) filed a federal lawsuit challenging Oregon’s EPR law. Members of NAW received a preliminary injunction against the EPR fees. The court found serious questions about the law’s constitutionality, and a trial is expected to proceed this summer.

If Oregon wants to create responsible end markets that feed a circular economy, this complex and opaque system mandated by the PPRMA seems unlikely to succeed.

Oregon has required state agencies to use recycled products whenever economically feasible since 2003. So, why are state buildings not built with 100 percent recycled material? Because it is expensive. The state obviously knows this, as the PRO is required to reimburse local governments when its requirement to use post-consumer recycled material for roll carts is more expensive. Consumers are not granted the same luxury.

The PPRMA expands access to recycling. But without making that recycling more efficient, that expansion burdens producers and consumers without helping the environment.

Unfortunately, Oregon statute specifically discourages competition for recycling. Municipalities are instructed to “displace competition with a system of regulated collection service,” award monopolistic recycling contracts “with or without bids,” and enable recycling franchisees’ collusion. This sort of cartelization of the recycling industry under government centralization ensures that recycling is disconnected from rational prices. Entrenching inefficient systems only ensures resources are wasted, and both the environment and the economy suffer. These unintended consequences are typical of heavy-handed, top-down mandates.

Ironically, the legislative findings acknowledge that Oregon’s first recycling programs were met with unexpected factors that “created unintended consequences,” and the PPRMA explicitly set out to “minimize such unintended consequences.” Aspects of the PPRMA and the broader Reuse and Recycling chapter of Oregon statutes make this quite a challenge, but some promising elements signal the opportunity for meaningful reform.

Earlier legislation on solid waste recovery generally included an alternative recovery rate calculation method that, rather than just taking the nominal percentage of material recovery, considered the broader total energy savings achieved. This bigger picture examination of overall efficiency is better for optimizing recycling than forced subsidization of inefficient systems.

Efficiency in allocating scarce resources, including the resources used to recycle, should be the end goal, not arbitrary recycling rate mandates. PRO fees that build out infrastructure to make recycling efficient could make sense for Oregon. However, confidentially determined PRO fees that subsidize costly and inefficient processes burden producers, consumers, and the environment.

EPR policies are still in their infancy, and there is room for policy reform as additional states consider enacting EPR policies. What is needed is more transparency into the setting of fees and definitions of recyclable materials. Rates should be set based on costs to society and the capacity for a material to be successfully used as a recycled product—not set simply to hit a revenue objective.