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Producer responsibility bill could boost some businesses but cost numerous others

Posted at 6:37 PM, Apr 07, 2022
and last updated 2022-04-08 11:54:07-04

DENVER — Inside a sprawling warehouse just off of I-70 in Denver, there’s a one-of-a-kind business at work. Direct Polymers is the only company in Colorado that is solely focused on recycling plastics.

Since starting in 2014, the business has grown rapidly, processing millions of pounds of plastic with its 20 employees each week.

The company is also expanding — co-owner Adam Hill is getting ready to install his seventh production line that’s focused on post-consumer plastics. He’s also planning on doubling the number of employees by next year, with even more on the way.

There’s just one problem — Colorado has one of the lowest recycling rates in the nation. An annual study found that only 15 percent of the state’s waste is recycled.

“Sometimes it can travel out of state, but a lot of the times, the materials are really light and loose and they don't weigh a lot," Hill said. "With freight rates as high as they are, it costs a lot of money for these companies to try to ship lightweight materials out of state. So really, it's us or landfill."

Many millions of pounds of materials that Hill’s company could recycle for a financial and environmental profit never make it to his facility. As a result, Direct Polymers is having to ship recycling in from other states to process. The practice can be more economically and environmentally unfriendly than recycling goods from within the state since trucks have to drive the materials in.

“The reason we're doing that right now is because we have a lot of capacity here and we're running a lot of equipment," Hill said. "The equipment's got to stay fed, that's how we make money."

In an effort to boost Colorado’s recycling rates, a bipartisan group of lawmakers has introduced a bill to create a new statewide recycling program.

House Bill 22-1355 would create a producer responsibility program in the state. It would require companies that sell products in the state to pay into the program for the amount of goods they sell in the state and the waste they contribute. The money would then be used towards a statewide recycling program that would establish a clear, uniform list of what’s recyclable and educate the public on it.

Hill supports the bill, saying it could keep more recyclable materials out of Colorado landfills and provide him with the feedstock he needs to keep his recycling center busy.

“I'm totally in favor of the purpose of the bill, which is to increase the recycling rates around town," Hill said. "I think it's a good thing. I just think the more recycling we can do, the better."

However, other businesses worry about what the bill would mean for them.

A 15-minute drive away from the recycling center, the co-owners of Woods Boss Brewing Company are keeping a close eye on the legislation.

Chad Moore and his business partner started the brewery in 2017 with 90 percent of their sales coming from their main taproom. When the COVID-19 pandemic hit in 2020, the brewery quickly pivoted to start canning and selling its beer to generate revenue.

Federal PPP loans helped the brewery get by in 2020, but Moore says they were largely left to fend for themselves after that. These days, about 40 percent of the brewery’s business comes from cans. However, starting up a canning process from scratch has not been easy, and inflation isn’t helping.

“Logistics, shipping, delivery, things like cost of raw materials is all skyrocketing,” Moore said.

He’s worried about what a potential, eventual producer responsibility fee for the statewide recycling program will mean for businesses.

“We could be forcing an even more difficult situation for a lot of folks and small businesses that are currently trying to dig out of a hole over the last two years,” Moore said.

The bill does have an exemption for companies that report less than $5 million in total gross revenue. However, Moore points out that total gross revenue includes everything his brewery sells in house, not just the canned beer.

He’s also convinced that small businesses will be affected by the bill despite the carveout.

“As written, it does not have the parameters of the guidelines that would really kind of value the small business or show the small businesses that they're going to be alleviated from it,” Moore said.

He estimates it could cost his brewery tens of thousands of dollars annually as it’s currently written. He also believes it’s unfair to only target one part of the supply chain with producers instead of considering the role manufacturers play in the waste creation process as well. He would like to see the cost of standing up the statewide recycling program spread out more evenly.

Moore also says the bill assumes that many businesses have larger buying power than they actually do to influence manufacturers.

“We don't have the influence to be able to make demands or push the manufacturers to really help either use more recycled material or develop new ways to reduce the costs of new materials,” he said.

To be clear though, Moore says he supports recycling and conservation efforts and wants to find a way to contribute to the solution. He’s just not convinced this bill’s current language will accomplish that without hurting local businesses.

Moore is hoping lawmakers will take a closer look at the legislation to consider potential unintended impacts.

The Colorado Farm Bureau, Colorado Beer Distributors Association, Colorado Chamber of Commerce, Colorado Beverage Association, Colorado Brewers Guild, Molson Coors, Albertsons and numerous others have declared their opposition to the bill.

It faced its first committee test Thursday.