Material-Based Fees/Dues
Material-based fees (or dues depending on the state) are based on the primary material type of product packaging to better reflect the unique costs of collecting, handling, transporting, and processing that specific material. Such fees may be mandated directly in state EPR laws and/or used to develop eco-modulation factors that are built into statute.
Interchange 360’s fee-setting process is governed by a written fee setting policy developed following consultation with a working group consisting of participating producers, distributors and retailers, and approved by Interchange 360’s Board of Directors. The policy is designed to ensure consistency, equity, transparency, and compliance with applicable state requirements across the jurisdictions where Interchange 360 operates.
How are Material-Based Fees Determined
Cost Factors
Fees are determined by assessing the total costs of managing each product/material type and the volume of product reported sold in the jurisdiction. Costs are a combination of several factors:
- Direct Expenses*: Collection, transportation, and processing of containers; program education & outreach; program legal cost; direct program staff
- Indirect Expenses: Technology, finance, and administrative overhead costs
- Program Allowances: Financial reserves and risk contingency
*Direct expenses often vary by material type due to differences in volume, weight/density, handling cost, recyclability, and processed material market value. Interchange 360 works with collection facilities and transporters to set return incentives by material type that reflect these differences. Market insights from related programs in the U.S. and Canada have been used to validate estimates of material type contribution to direct expenses.
Fee Determination
Once the program cost is determined, the total amount of covered material for each material type being sold into that state is calculated based on the anticipated volume reported by registered producers. A percentage of the volume of each material type in comparison to overall volume of material reported is applied to the cost factors.
A cost-based fee for each material type, therefore, reflects the relative cost each material has on overall program expenses.
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