The year 2025 marks a landmark year for extended producer responsibility for packaging in the United States, with Oregon becoming the first state to have a reporting deadline (March 31, 2025) and to start their program. There are also other bills that have been introduced in states like Tennessee, New York, and others.

Despite the positive momentum around EPR for packaging in the United States—including five states introducing and implementing programs—opposition is growing due to concerns about the notion that EPR compliance fees will be passed on to consumers, raising prices.

This line of thinking, alongside industry pressure and lobbying, was present in the decision to delay and restart the implementation of California’s EPR program (SB 54), which failed to be finalized by a March 8 deadline. 

A March Packaging Dive article quotes Lance Klug, spokesperson for CalRecycle’s Office of Public Affairs: 

“In the coming year, CalRecycle will continue to work with industry, advocates and other interested parties to develop rules that ensure California’s plastic pollution law balances the need to cut plastic pollution with the importance of minimizing costs to families and small businesses.”

As the nation's largest economy, and the fifth largest in the world, California’s decision could have ripple effects on the introduction, passing, and implementation of new EPR bills. We are already seeing this take place as the same article notes that more than 100 businesses and industry groups came together to write a letter to New York lawmakers with concerns about an EPR bill re-introduced in January, specifically citing California’s delay. 

One common critique and concern of opponents to EPR for packaging programs is that the fees producers pay will ultimately be passed to consumers in the form of raised prices at checkout. However, this speculation is not supported by any sound evidence. We decided to do our own research on the matter and found two studies—one from RRS for the Oregon DEQ (2020) and the other from Columbia University (2022)—that give more clarity to one of the largest debates in EPR for packaging. Join us as we explore their key findings!

Impact on EPR Fees on PPP on Price of Consumer Packaged Goods: RRS

The first study we looked into was conducted by Resource Recycling Systems (RRS) in 2020 for Oregon’s Department of Environmental Quality (DEQ). The study consists of original research to compare the prices of goods in territories with EPR for packaging and those without to understand if EPR policy relates to higher prices paid by consumers, exploring six jurisdictions in Canada.

The study considered seventeen frequently bought consumer packaged goods (including Lay’s Classic Potato Chips, Cinnamon Toast Crunch, and more) and the differences of their prices in an online shopping environment of several grocery shopping platforms in six Canadian regions—three with EPR (British Columbia, Manitoba, and Quebec) and three without the program. 

The online shopping platforms analyzed were Walmart, Safeway, Loblaw, Real Canadian Super Store, Save-On-Foods, and Wholesale Club.

In short, the study found NO correlation between the presence of an EPR policy and product price increases.

This is illustrated by the chart below highlighting price differences in the total basket of goods (in Canadian dollars)—bars with a striped line represent regions with EPR and solid lines are those that do not have EPR. 

As you can see, there is no clear difference between increased costs in EPR and non-EPR regions explored in this study. When looking at price difference data by item for compared retailers (118 data points) it was found that 76% of prices were equal in the six communities, 15% of prices were higher in provinces without EPR, and 9% of prices were higher in provinces with EPR for packaging.

With other macroeconomic factors that impact product pricing alongside price elasticity, the impact of EPR fees is not able to be isolated from other impacts and, therefore, saying it increases final costs for consumers is a faulty argument.

The study highlights that, on average, the sum of prices in regions with EPR was slightly higher, but only by $0.00056 CAD ($0.00040 USD) per item on average—and this can’t be attributed to EPR compliance fees alone (macroeconomic factors, price elasticity, supply chain disruptions, etc.) 

The research also explored estimated EPR fees per item in British Columbia, Manitoba, and Quebec—calculated through a meticulous process of purchasing the items, emptying and cleaning the packaging, and then weighing it to estimate EPR fees. The team made these calculations to assess whether there was a link between fees and product price increases.

For example, the product price for Lay’s Classic Potato Chips in a multi-laminate bag was found to be $3.33 CAD in British Columbia and the estimated EPR fee for this item was $0.01 CAD, only representing 0.34% of the product price. When looking at the 17 items in British Columbia, the average EPR fee per item was $0.04 CAD and the average % of EPR fee compared to total price was only 0.74%. 

When the team assessed a correlation between higher fees and higher prices in the regions with EPR programs, the R2 value was 0.039—indicating no significant correlation between the two.

This study helps highlight that although EPR programs mean more costs for producers and brands, this does not necessarily translate to higher prices for consumers. When differences were identified, like the $0.00056 CD higher per item in EPR regions, fault does not lie with the EPR system, rather un-related macroeconomic factors. 

Still not convinced of the lack of correlation between the presence of an EPR program and increased final costs for consumers? Let’s explore one more study by Columbia University (professor Satyajit Bose) and The Recycling Partnership from 2022.

Professor Satyajt Bose's Research

Columbia University, more specifically the professor in practice of sustainability management—Satyajit Bose, has also explored the potential link between the presence of EPR for packaging programs and prices consumers pay. Bose holds a PhD in Environmental Economics from Columbia University and in 2022 published a report titled: Economic impacts to consumers from extended producer responsibility (EPR) regulation in the consumer packaged goods sector.

Bose also notes that the study was funded and supported by The Recycling Partnership. 

The study, rooted in complex economic analysis, seeks to understand how consumers could potentially be impacted from a nationwide EPR for packaging program. The abstract states:

"We construct a triangulation of the upper bound of expected consumer price impact resulting from the introduction of EPR fees in the consumer packaged goods sector. We review the estimate of the packaging cost component of the US expenditure on food (a subset of the consumer packaged goods sector), as computed by the USDA based on economic input-output analysis. We use this estimate as a foundation, combined with food price elasticities and the analysis of expected burden-sharing between suppliers and consumers of the increase in packaging costs due to EPR requirements. We construct an orders-of-magnitude estimate of the maximum increases in grocery bills that an average US consumer should expect as result of a nationwide adoption of EPR.”

One of the key findings of this study is that in a scenario where the adoption of a nationwide EPR program leads to a doubling of packaging costs throughout the value chain for CPG brands, the “computed upper bound” would reflect only 0.69% of grocery spending—which would lead to a “maximum increase in monthly grocery bills of $4 USD per household.” The table below from the study provides more clarity to this complex analysis:

Bose also notes, “It is extremely unlikely that 100% of EPR compliance costs could be passed on to consumers given the limited pricing power of food retailers and the relative elastic demand for consumer staples with significant packaging costs.”

Similar to the RRS study, Bose makes it clear that such small price increases are hard to link to EPR compliance costs alone, with other macroeconomic factors and basic economics at play.

We recommend diving into the full study for context and additional findings—learn more here.

Learnings from Bottle Bills in the US

Aside from the two studies we explored, it is also important to note that ten states in the US currently have deposit return schemes (a.k.a bottle bills or DRS) that include a five to ten cent USD deposit on certain beverage containers to encourage consumers to return the beverage packaging at the end of its useful life to reclaim that deposit.

The economic impact of these programs on consumers is rarely discussed, and these programs have been around for multiple decades in the same cases. If we refer back to the study from RRS, even if 100% of the EPR costs per item were passed on to consumers (unlikely based on Bose’s analysis and basic economics), this would, in most cases, be far less than the five to ten cent USD price increase for items under DRS programs.

To revisit the Lay’s Classic Potato Chips in a multi-laminate bag in British Columbia example, if 100% of EPR compliance fees per item were passed to consumers, this would only increase the price of the item by one cent USD. 

Is the one cent USD able to be recovered through consumer participation as in a DRS program? No, but it shows that the worst case scenario would have relatively unnoticeable impacts on consumers of CPG products. Many consumers are even unaware that DRS programs exist in their states, with an average return rate of 62% (2023) across the ten states with DRS programs.

Learn more about EPR for Packaging

In the last year and a half, the Packaging School team has written over a dozen research articles on EPR for packaging programs around the world.

Read all our EPR articles in one place here!