Legislative Update: Senate Passes Two Bipartisan Recycling Bills

Senate Passes Two Bipartisan Recycling Bills

On March 13, the Senate passed two bipartisan recycling and composting bills that have been stalled since being reported out of the Senate Environment and Public Works (EPW) in June.  The Senate approved amended versions of the Recycling Infrastructure and Accessibility Act (S. 1189) and the Recycling and Composting Accountability Act (S. 1194) by unanimous consent.  The bills would help the US toward its goal of increasing the national recycling rate to 50 percent by 2030, up from the current 32 percent recycling rate.  The bills are championed by EPW Committee Chair Tom Carper (D-DE) and Ranking Member Shelley Moore Capito (R-WV) and have served as examples of how difficult it has been to pass recycling legislation even with broad bipartisan support.

The Recycling and Composting Accountability Act directs EPA to gather data on national recycling and composting rates, produce several reports, and assess the nation’s capacity to implement a national composting strategy to diminish contamination rates in recycling. Additionally, the EPA is required to inventory recycling facilities for residential materials, gather data on curbside and drop-off recycling and composting programs to establish a comprehensive baseline, and disseminate best practices to enhance recycling and composting efforts at the state, local, and tribal levels.

The EPA is further directed to develop a metric for determining the percentage of recyclable materials diverted from circular markets and to conduct a study on the diversion of such materials over the past decade.

The Recycling Infrastructure and Accessibility Act seeks to address challenges faced by rural and underserved communities with access problems to recycling infrastructure. It would create a pilot recycling program that awards competitive grants to state, local governments, Native American tribes, or public-private partnerships to improve recycling accessibility.

The collection of such data that these bills provide has been a significant hurdle that both Republicans and Democrats and various stakeholders have argued is needed before the country can move forward with establishing stronger recycling and composting programs, increasing infrastructure, and developing national strategies and policies.

The U.S. House of Representatives must now approve the bills. Rep. Marianette Miller-Meeks (R-IA) has introduced companion legislation for the Recycling Infrastructure and Accessibility Act (H.R. 6159), and Rep. Joe Neguse (D-CO) has introduced companion legislation for the Recycling and Composting Accountability Act (H.R. 4040).

Committee Examines Extended Producer Responsibility Policies

On March 6, the Senate Environment and Public Works Committee held a hearing entitled “Examining Extended Producer Responsibility Policies for Consumer Packaging.”  Members from both sides of the aisle and stakeholders representing environmental advocacy, a business reliant on packaging, and a trade group representing the packaging industry testified how extended producer responsibility (EPR) policies could incentivize recycling and reduce plastic pollution and product packaging. While there was some interest and general support for the benefits that could come from these policies, there is still caution that much work is needed before such policies could be implemented.

Ranking Member Shelley Moore Capito (R-WV) highlighted the challenge of insufficient collection infrastructure and low demand for recycled materials, suggesting EPR as a potential solution. However, she questioned whether the current infrastructure can support EPR policies.  She emphasized the need for sustainable waste management policies that balance environmental protection with economic realities and growth. She urged careful evaluation of EPR policies to discern their practical implications, particularly their potential negative impact on consumers, small businesses, and rural areas with limited recycling infrastructure. She also acknowledged other significant hurdles, including the compliance of states and producers given the state of recycling programs and infrastructure.

Dan Felton, Executive Director of AMERIPEN, agreed with Sen. Capito. Their organization representing the packaging industry would support a “thoughtful” and well-designed EPR proposal “based in reality” for packaging recovery and recycling.  Felton touted the organization’s work at the state level.  However, several witnesses and members had concerns about state-level EPR proposals that would create a “patchwork” of regulations, making it difficult for businesses to comply.  Six states-Oregon, Maine, Colorado, California, Illinois, and Maryland–have so far passed EPR laws.

While Felton said deeper discussions on uniformity and whether something should be done at the federal level were needed, Erin Simon, Vice President of Plastic Waste and Business at the World Wildlife Fund, and Dr. H. Fisk Johnson, Chairman and CEO of S. C. Johnson & Son, emphasized the need for federal EPR regulations. Johnson argued that a federal EPR law would be the most effective way to address plastic waste, citing the need for scale and efficiency. He said federal regulations would avoid complexity and inefficiencies caused by differing state regulations and prevent over-regulation.

Capito also referenced ongoing debates over technologies like pyrolysis as another hurdle, advocating the importance of considering chemical recycling as a key component of waste management strategies to improve recycling rates effectively.  Fenton agreed, saying that chemical recycling was another “tool in the toolbox” and opposes federal or state policies eliminating advanced, chemical, and molecular recycling, believing they could hinder packaging recycling and recovery.  Dr. Johnson is hesitant about chemical recycling but recognizes its role and supports setting environmental, social, and economic bars for any technology used to process and provide secondary markets.

Ms. Simon was more cautious about chemical recycling, saying it has not been proven. However, she said it is more important to  “define the outcomes” in the process rather than the “how,” adding that they don’t want to close off innovation, but any technology that is used to process and provide secondary markets has to meet certain environmental, social and economic.

To build consensus on an EPR model, all the witnesses agreed on the importance of data in addressing plastic waste and the indispensability of all stakeholders involved in the solution. Ms. Simon underscored the importance of identifying common ground among stakeholders.

Dr. Johnson highlighted British Columbia’s “successful” EPR legislation for its notable achievement in attaining high recovery rates and lauded the implementation of refill stations in France and the UK.

Mr. Felton noted that the 40 countries with EPR proposals in place are now 20 to 30 years old and were created based on different sets of packaging and technology.   He cautioned that as “we point towards other countries and what they are doing right,” stakeholders must be mindful that the US’s needs are unique.  He also reiterated the need for more data before making policy decisions.

Congress Passes First Tranche of FY24 Spending Bills; Turns to Second Deadline 

The Senate on March 8 passed (75-22) a six-bill spending measure (H.R. 4366) totaling $468.7 billion to prevent a partial government shutdown for several agencies and marking a long-awaited step forward on finalizing the FY2024 spending bills, which have been stalled and required passing four stop-gap bills to keep the government running.  The package includes the FY2024  and the Agriculture, Commerce-Justice-Science, Energy-Water, Interior-Environment, Transportation-HUD, and Military-Construction-VA bills.  The House overwhelmingly voted to pass the bill on March 6, 339-85, and sent it to the Senate. President Biden signed it into law on March 9.

Appropriators are currently negotiating the second six-bill package, which is anticipated to exceed $1.2 trillion in spending. This package comprises the Defense and Labor-HHS-Education measures, the two largest bills, alongside the Financial Services, Legislative Branch, Homeland Security, and State-Foreign Operations measures. Sources familiar with the discussions suggest that the wrap-up package will likely be unveiled within the next nine days, potentially on March 17, ahead of the March 22 deadline for the second tranche of bills. Senator Murray noted that several challenging decisions still need to be made despite collaborative efforts between parties on the package.

Biden Releases FY 25 Budget with 8 Percent Increase for EPA

The Biden administration requests a nearly 20 percent increase in the EPA’s FY2025 budget, which it says would help restore the agency’s capacity to protect the nation’s air and water. The budget requests $11 billion for discretionary funding in fiscal 2025, a $1.8 billion increase from the FY2024 funding provided for the agency in the consolidated appropriations bill signed into law by President Joe Biden on March 9.

This increase would allow the agency to add more than 2,000 full-time equivalent staff relative to the fiscal 2023 levels. This would bring the workforce to more than 17,000, roughly in line with staffing during the 1990s and 2000s.

“President Biden’s Investing in America agenda and the FY 2025 Budget for EPA deliver bold environmental actions and economic benefits for communities across the county,” said EPA Administrator Michael Regan in a statement. “EPA’s work will benefit all Americans and we have made it a priority to ensure that a commitment to environmental justice is central to all of the agency’s efforts as we continue our work to help disadvantaged and overburdened areas become healthier, more resilient communities.”

The request includes $101 million for two EPA programs dedicated to remediating lead pipe contamination in drinking water, a priority Biden reiterated in his State of the Union address on March 7. This is an increase of $53 million over FY2021 levels. Also, for drinking water, the request calls for $2.4 billion for state revolving funds for drinking water and wastewater infrastructure, an increase of over $1 billion from FY2023 levels.

The request for environmental justice includes a new $25 million grant program focused on tribal lands and $1.5 billion across “numerous programs throughout the agency,” including the Office of Environmental Justice and External Civil Rights established by the Biden administration in 2022. The White House said this would help implement the Justice40 Initiative, which would invest 40 percent of the overall benefits of new federal spending in areas such as climate and clean energy to go toward historically underserved communities.

The budget requests an increase of $49 million over FY2023 enacted levels to continue expanding the “core capacity” under the agency’s Toxic Substances Control (TSCA) program and modernizing information technology and data software. EPA’s overall TSCA request is for $131.9 million and 534.8 full-time equivalent (FTE), which is $49 million and 174 FTE above current levels—the same increase the White House asked for in FY24. It also provides $7.8 million for a small business grant program to aid TSCA compliance.

The White House FY2025 budget request includes a reduction in base discretionary funding for the Army Corps of Engineers compared to fiscal 2024 levels. President Joe Biden’s proposal allocates $7.2 billion in base discretionary funding, representing a decrease of approximately 17 percent from the FY2024 enacted level of $8.7 billion. However, the budget prioritizes funding for climate resiliency, ecosystem restoration, and supply chain initiatives. This budget plan utilizes a portion of the $17 billion in five-year advanced appropriations provided by the 2021 infrastructure law.

It also requests an extra $13 million for small aquatic ecosystem restoration programs, specifically citing the Supreme Court’s Sackett v. EPA decision, which the administration claims could harm wetlands. The Supreme Court decided that a “waters of the U.S.,” or WOTUS, rule extends only to wetlands with a “continuous surface connection” to other waters and rejected the EPA and Corps’ effort to apply WOTUS to wetlands with a “significant nexus” to other waters.

Wyden Ups Pressure On Senators to Pass Business Tax Package 

Senate Finance Chairman Ron Wyden (D-OR) cautioned that if Senate Republicans delay negotiations, the currently stalled $79 billion family and business tax package (H.R. 7084) would not be up for discussion in 2025. The statement came as some Republicans have suggested they are willing to delay action until the expiration of the 2017 tax cuts if Democrats do not agree to bill changes.  The bill Wyden negotiated with House Ways and Means Chairman Jason Smith (R-MO) breezed through the House in January on a 357-70 vote.

During a Senate Finance Committee hearing on U.S. manufacturing and the tax code, Wyden emphasized the package’s importance and the need for urgency given the potential damage to small businesses if the bill is postponed. Wyden urged swift action from the Senate, highlighting that the policies included in the package would not be available for consideration if the bill stalls.  He asserted that Republicans shouldn’t expect provisions making the business tax deductions retroactive to 2022 and 2023 to remain in play if they delay until next year.

The package would revive a trio of business tax credits, including full, upfront deduction of research and development investments, full deduction of purchases of assets such as equipment and machinery, and a higher cap on interest payment deductions. It would also expand the child tax credit.  Several Republicans object to some or all of the child tax credit provisions.

Hearing witnesses echoed Senate Finance Chairman Ron Wyden’s urging for the Senate to proceed with the tax package deal, revealing how they’ve postponed purchases and expansions due to the rollback or expiration of three business tax deductions introduced in the 2017 tax cuts. Courtney Silver, president of Ketchie Inc., a machine part manufacturer, cited delayed machinery purchases due to reduced deductions, impacting productivity and job creation.

Mark Widmar, CEO of First Solar, emphasized the necessity of full deductions for research and development investments and machinery purchases to sustain jobs and innovation in the U.S.  He highlighted the risk of failing to pass the bill, which could result in job losses and hinder the company’s ability to compete internationally.

During the hearing, Ranking Member Mike Crapo (R-ID) expressed concerns about IRA costs, implementation, and energy incentives, significantly exceeding initial estimates. However, the witnesses praised incentives such as the Section 45X Advanced Manufacturing Production Credit and other IRA tax credits for spurring innovation and investment in the energy, mining, critical minerals, and semiconductor sectors.

Peter Huntsman, the President and Chief Executive Officer of the chemical company Huntsman Corporation, warned that one of the biggest threats to American manufacturing is the belief that the U.S. can choose not to extract its natural resources even if it could transition tomorrow to a fossil fuel-free energy grid. “We cannot transition away from fossil fuels as a feedstock for chemical and manufacturing production. It is a chemical sector that develops the molecules that allow us to lower our emissions if the goal of government and business is to reduce greenhouse gas emissions,” he testified.  “Tax policy should be calibrated to increase production of the very chemicals and materials needed to reduce energy consumption.”