Producer Responsibility Bill Polarizes Business Community
DENVER — Inside a sprawling warehouse just off I-70 in Denver, there’s a one-of-a-kind company at work. Direct Polymers is the only company in Colorado that focuses solely on recycling plastics.
Since its beginnings in 2014, the company has grown rapidly, processing millions of pounds of plastic with its 20 employees every week.
The company is also expanding – co-owner Adam Hill is set to install his seventh production line focused on post-consumer plastics. It also plans to double the number of employees by next year, with even more on the way.
There’s only one problem: Colorado has one of the lowest recycling rates in the country. An annual study found that only 15% of state waste is recycled.
“Sometimes it can travel out of state, but most of the time the materials are really light and loose and they don’t weigh much,” Hill said. “With freight rates as high as they are, it’s costing a lot of money for these companies to try to ship lightweight materials out of state. So really, it’s us or the dump.”
Several million pounds of materials that Hill’s company could recycle for financial and environmental gain never make it to its facility. As a result, Direct Polymers must ship recycling from other states for processing. The practice may be more economical and environmentally friendly than recycling goods within the state, since trucks must transport the materials.
“The reason we’re doing this right now is we have a lot of capacity here and we’re using a lot of equipment,” Hill said. “Equipment has to stay powered, that’s how we make money.”
In an effort to increase Colorado’s recycling rates, a bipartisan group of lawmakers introduced a bill to create a new statewide recycling program.
Internal Bill 22-1355 would create a producer responsibility program in the state. This would require businesses that sell products in the state to contribute to the program for the amount of goods they sell in the state and the waste they contribute. The money would then be used for a statewide recycling program that would establish a clear and uniform list of what is recyclable and educate the public about it.
Hill supports the bill, saying it could keep more recyclable materials out of Colorado’s landfills and provide it with the raw materials it needs to fill its recycling center.
“I totally support the intent of the bill, which is to increase recycling rates in the city,” Hill said. “I think that’s a good thing. I just think the more we can recycle, the better.”
However, other companies are concerned about what the bill would mean for them.
A 15-minute drive from the landfill, the co-owners of Woods Boss Brewing Company are keeping a close eye on the legislation.
Chad Moore and his business partner launched the brewery in 2017, with 90% of their sales coming from their main drinking room. 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 pull through in 2020, but Moore says they were largely left on their own after that. Today, around 40% of the brewery’s business comes from cans. However, starting a canning process from scratch hasn’t been easy, and inflation isn’t helping.
“Logistics, shipping, delivery, things like the cost of raw materials are skyrocketing,” Moore said.
He worries what a possible producer responsibility levy for the statewide recycling program will mean for businesses.
“We could force an even tougher situation for a lot of people and small businesses who are currently trying to get out of a hole over the past two years,” Moore said.
The bill provides an exemption for businesses that report less than $5 million in total gross revenue. However, Moore points out that total gross revenue includes everything his brewery sells internally, not just canned beer.
He is also confident that small businesses will be affected by the bill despite the exclusion.
“As written, it doesn’t have the parameters of the guidelines that would really value small businesses or show small businesses that they’re going to be relieved of it,” Moore said.
He estimates it could cost his brewery tens of thousands of dollars a year, as it is currently written. He also thinks it is unfair to target only part of the supply chain with producers instead of also considering the role manufacturers play in the process of creating waste. He would like to see the cost of setting up the statewide recycling program spread more evenly.
Moore also says the bill assumes that many companies have more buying power than they actually have to influence manufacturers.
“We don’t have the clout to be able to make demands or push manufacturers to really help either use more recycled materials or develop new ways to reduce the costs of new materials,” he said. declared.
To be clear though, Moore says he supports recycling and conservation efforts and wants to find a way to contribute to the solution. He is simply not convinced that the current wording of this bill will accomplish this without hurting local businesses.
Moore hopes 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 many others have declared their opposition to the bill.
He faced his first test in committee on Thursday.