Eco-Modulation
Eco-Modulation is a tool within EPR policies used to incentivize packaging design to be more recyclable, compostable, and/or reusable through the adjustment of base fees. It can include:
- Bonuses/Incentives – Reduction in fees based on certain criteria deemed to make the packaging more environmentally friendly
- Maluses/Disincentives – Increase in fees for packaging designs deemed less environmentally friendly based on set criteria.
Eco-modulation was a key driver behind the formation of Interchange 360, to ensure producers of petroleum and automotive products would not have to pay excessive fees for industry materials that are not recycled through a curbside program.
Eco-Modulation in Practice
To date, every state packaging EPR law mandates eco-modulation in some form, requiring the PRO to implement it. Colorado, in addition to mandating the PRO to offer eco-modulation, also has state bonuses.
Incentives vary by state (refer to specific state statutes for details) but may include one or more of the following (note: not all can be applied to the petroleum and lubricants industry):
- Use of post-consumer recycled content (PCR)
- Reductions in the amount of packaging material and/or paper products (source reduction)
- Enhanced recyclability or commodity values of covered materials
- Increased reuse/refill of covered materials
- Decreasing/eliminating toxicity
- Use of compostable materials
- Labeling to improve consumer behavior/reduce confusion
- Use of renewable materials
- High (relative) recycling rates of covered materials
- Standardize material to simplify downstream management
- A reduction of litter from packaging material
- The product-to-package ratio
- The producer’s choice of material
- Life cycle environmental impacts
- Increasing the amounts of inputs derived from renewable and sustainable sources without reducing its ability to be recycled
Examples of disincentives may include:
- Presence of hazardous material
- Designs and practice that increase the cost of recycling, reusing, or composting materials
- Designs and practice that disrupt the recycling of other materials
- Use of covered materials not on minimum recyclable list
- Low recycled content
When required by states to implement eco-modulation, Interchange 360 will seek to apply industry specific factors to its fees.
State Specific Eco-Modulation
