Aiming to raise $215 million to $267 million for the first year of Colorado’s universal recycling initiative, the organization running the program is looking at charging anywhere from 2 cents to 90 cents per pound to producers of packaging materials used in the state.
The sizable gap in potential costs is due in part to the fact that the Circular Action Alliance, the nonprofit organization in charge of the new venture, is still gathering information from about 3,000 packaging producers on the tonnage of materials in circulation in the state. The final cost of the “dues” these companies must pay to be a part of the Extended Producer Responsibility program will have to add up to the total cost of the budget and will be divided between producers based on numerous factors.
But the final costs per producer also aim to reflect the cost of resources needed to manage recycling of 61 different material categories, from paper to metal and from plastic to wood. The easier it is to recycle and reuse a material, the less the per-pound costs will be — a measure that both reflects operational expenses and serves as an incentive for packaging companies to use more recyclable materials that are more likely to find end markets.
The numbers were contained in an amended plan submitted by CAA on June 30 that serves as a blueprint on how the program will work. A CDPHE advisory board has until Aug. 15 to recommend to department leaders whether to approve or reject the plan and the CAA has until Oct. 31 to set the dues for 2026, when the organization will begin to implement a statewide recycling system.
Newly submitted plan brings costs into focus
“It’s an ambitious plan. And it’s reinforced here,” said Juri Freeman, executive director of Circular Action Alliance Colorado, in an interview. “We have not changed our goal. Our goal is to more than double the state’s recycling rate by 2035.”
Colorado’s dismal recycling rate — some studies put it as low as 16% in recent years, though the CAA estimated it at 25% of recyclable goods — is what led legislators to pass a 2022 law creating the unique structure of the statewide recycling program. All packaging producers of substantial size must join the Producer Responsibility Organization run by CAA and pay dues that will be used to fund a free residential recycling system beginning next year that’s set to expand to small businesses by 2030.
CAA will use the revenue from the per-pound fees to contract with public, private and nonprofit service providers statewide to pick up recycling at homes and deliver it to transfer or sorting stations. Service providers who now charge customers to haul away their paper, plastic and other goods will cease their charges and be funded by the new organization, all while the CAA works to try to create new service in areas of the state where it’s not available now.
In the June 30 plan, CAA estimated that this can boost recycling rates to 41% by 2030 and 55% by 2025. Beginning in 2028, the organization will expand pickup service from homes to schools, followed by government buildings, public places, hospitality locations like hotels and then small businesses by 2030. However, the law authorizing the new program did not provide for the state to offer recycling service to larger businesses making more than $5.3 million in gross sales in 2025 — a number that will rise with inflation.
Goal: Increase recycling and use of recycled materials
Just as important as the push to boost residential recycling, however, is the program’s goal to expand the reselling of recycled materials to packaging producers shipping goods in glass bottles, aluminum containers, rigid plastic casing and other materials. There are very few of these “end markets” in Colorado right now — glass being a prominent exception — and some observers have theorized that the state’s low recycling rate is tied to an inability to find recycling companies willing to take certain materials that they can’t then sell.
Boosting supply of recycled goods by offering service to every home should attract more companies willing to remake material for reuse, and educating consumers how to dispose of it properly will create cleaner material more attractive to recyclers, Freeman said. And incentivizing producers to use more recycled or refillable materials — which will lower the per-pound fees on those materials — will in turn help to build end markets by getting those producers to seek out companies that can provide them recycled goods, he said.
“The desired outcome is a measurable reduction in single-use packaging waste, bolstered by an inclusive approach that engages businesses, governments and communities,” reads the CAA’s final plan. “By fostering a market for recycled materials, the program’s (post-consumer recycled content) plan aims to stabilize material flows, encourage innovation in packaging design and reduce environmental impacts.”
How costs will be assessed to packaging producers
To do that, though, CAA must come up with a final dues schedule that will leave producers to pay some substantial bills, making Colorado just the second state, behind Oregon, to launch such a program. While Freeman said he couldn’t estimate yet the average annual cost to packaging producers, Colorado Consumer Coalition Executive Director Jaime Gardner said she calculates that companies could be paying hundreds of thousands of dollars each to fund a program estimated to cost $301 million to $397 million by 2030.
The June 30 plan offers average dues estimates in three scenarios that reflect what costs could be depending on how much tonnage producers report using during the 2024 year — figures that are due into the CAA by July 31. The more supplied tons of packaging, the lower the per-producer cost likely will be to meet the program’s budget.
Paper products and glass have the lowest average interim base dues, ranging between 2 and 6 cents per pound, with aluminum (4 to 5 cents per pound) and paper/fiber packaging (7 to 10 cents per pound) not far behind. Rigid plastic materials not typically collected now could range from 66 to 90 cents a pound, flexible and film plastics from 62 to 86 cents per pound and wood and other organics from 43 to 55 cents per pound.
Part of the difference in ranges reflects the weight of materials, Freeman said. Glass is far heavier than plastic film, so it will reach a pound of material much quick erand even out in the costs to producers in that way.
“Not small taxes”
But part also reflects that some of the higher-cost materials are simply harder to recycle and harder to find end markets for, raising the cost of handling these materials and getting them into reuse, he said. After determining total system costs, the six-step dues-setting process determines the cost to manage each material category, allocates system costs by supply tons in each category, allocates commodity revenues to offset some costs and adds non-material management costs like education and outreach.
Packaging producers who are following the development of the plan remain frustrated that there are not final numbers yet for the dues, three-plus years after Gov. Jared Polis signed the program into law. While Consumer Coalition members are not willing to comment on the still-developing cost yet, though, they are worried how these numbers will begin to add up if more states follow the lead of Oregon and Colorado, Gardner said.
And they remain concerned with the overall constitutionality of the program, which puts into place a nonprofit that producers are forced to join as a fee collector in place of the state government, she said. While smaller firms — those producing less than one ton of materials or making less than $5.3 million in sales annually — are exempt, others will learn late this year how much they must add to their budgets to continue operating in Colorado.
“There are significant legal questions when you’re talking about what is a tax on business. And these are not small taxes,” Gardner told The Sum & Substance. “I tend to think that a six-figure tax is a big number.”
How much will program boost recycling?
Both proponents and opponents of the program, which generated significant debate in the Legislature when it passed, also will be watching its effectiveness.
The predicted significant boost in recycling rates will be scrutinized to see if it comes to bear, as will the boost in use of post-consumer recycled content by producers. The plan predicted growth in the latter area that ranged from very significant (from an estimated 10% of rigid plastic packaging that is now recycled content to 20% by 2030) to fairly flat (with recycled paper and packaging usage remaining around 40% the next five years).
Producers will start paying dues in January, and the first recycling services must be in place by around June, Freeman said. There is still much to do, including having CAA negotiate contracts for the local services responsible for collecting and transporting recycled materials, but the recently submitted plan shows that the work is underway.
“We are in the process right now of working closely with the communities and securing providers to more closely develop the frameworks,” he said. “We recognize that it’s not a switch we flip to turn on a statewide recycling system. It’s going to take time.”