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Colorado’s extended producer responsibility program will begin next year, requiring large businesses to fund the recycling or disposal of their packaging.
Large companies like Molson Coors won’t have to track down each and every cardboard box encircling a case of beer, or every can and bottle, but the company will pay a fee intended to strengthen recycling in the state by bolstering infrastructure and residential recycling in Colorado.
The intent is to incentivize companies to make more recyclable packaging, so higher fees will be levied for hard plastics while fees for paper, which is recycled more easily, will be lower.
Producer responsibility programs have existed for decades in Canada, and California, Maine, Minnesota, Maryland and Oregon also have programs or are in the process of rolling them out. However, some Colorado businesses have concerns related to the costs and legality of the program, and attempts to overturn the program could be in the works.
State lawmakers created the program in 2022, setting up a system where producers pay a third-party, nonprofit organization to manage funds generated by fees and oversee business participation; Circular Action Alliance (CAA) was eventually selected by the Colorado Department of Public Health and Environment to administer the funds.
CAA submitted a draft plan in February after consulting an advisory board made of local government officials, Colorado recycling companies, the Colorado Retail Council and recycling advocates. The plan is under review by the state’s producer responsibility advisory board until early April 2025, with most elements of the plan expected to kick in April 2026.
The plan maps out the first five years of the producer responsibility program in Colorado, including preparations that will occur in 2025. Here’s what we know so far:
How the Producer Responsibility Program Would Work
According to CAA’s draft, the goal is to increase Colorado’s recycling rate from an estimated 25 percent to 41 percent by 2030, and to “improve processing of compostable covered materials, and ensure continuous improvement related to reuse and refill.”
Unlike other existing producer responsibility plans that require companies to calculate their exact amount of business to see if they are mandated to pay the fees, Colorado’s proposed plan has a flat line: Any company that does more than $5.6 million in business total and sells products in Colorado must participate.
Dues will be recalibrated each year, taking into account the costs of materials and program management as well as commodity revenues.
“The producer dues are based on the net recycling services costs for each covered material in the state and vary by the type of covered material and if it is readily recyclable,” the plan explains.
The materials covered by the program include paper, rigid plastics, metal and glass. Dues depend on the specific material but range from an estimated 2 cents per pound for paper to 90 cents per pound for rigid plastic.
The estimated budget needed for the program is $215 to $267 million in 2026, the first planned ear of the program. By 2030, the number could rise to anywhere from $300.7 to $397.2 million.
Between $121.7 million and $160 million will be dedicated to residential recycling reimbursements in the first year of the program; up to $197.3 million could go toward residential reimbursements by 2030. The first phase of implementation will focus on residential recycling and slowly build to include small businesses and small commercial properties, which won’t have to pay dues but could have their recycling costs reimbursed. A large part of the projected budget growth between 2026 is due to increasing funds for recycling expansion.
Around $10 million of the annual budget is for operating and program management costs, including staffing.
Part of the budget is for a statewide education program, with a $14 million projected budget for education and outreach in 2024. But by 2030, the projected education budget is $20.5 million.
Each year, any leftover money from dues will go back into the fund for program improvement or to make dues lower the next year.
The CAA plan proposes eventually adding a concept called ecomodulation, which phases out materials that are hard to recycle or regularly contaminate compost, but that would be further down the line. The plan also considers adding jobs both in recycling and trash pickup and in industries that turn raw materials into new products to create a circular economy in Colorado.
Possible Benefits of the Program
Program funds will be given to local governments to reimburse recycling costs. In Denver, for example, the city recently switched to charging for trash while providing recycling and composting under the trash fee to every household smaller than eight dwelling units. Residents’ payments still don’t cover the entire program, however, with an estimated $15.7 million gap that must be paid with money from the city’s general fund in 2025.
A needs assessment conducted as part of the producer responsibility plan proposal found Denver could save $14.2 million annually by 2030 thanks to the program. Cities that contract out to third-party waste removal services or those where people choose their own waste pickup could also recover recycling costs as the program would cover expenses to set up a citywide program.
“Nothing about CAA or this legislation requires communities to run waste in a certain way,” says Rachel Zerowin, communications manager for CAA. “Communities will continue to operate their own waste programs in the way that works for them, and then CAA reimburses.”
Positive environmental impacts are also expected. According to Zerowin, the program is estimated to divert an additional 410,000 tons of paper packaging materials from the landfill and expand recycling access to 700,000 households in the state by 2035. That waste diversion could prevent 1.2 million metric tons of carbon dioxide from entering the atmosphere, CAA adds.
“Once it’s in place, this program represents an entire shift in our state’s recycling systems, and it’s all going to drive less waste, more efficiency and reduced costs for the governments and the residents who are currently covering the recycling bills for the covered items,” Zerowin says.
GreenLatinos, an advocacy nonprofit that supported the bill in 2022 and has a seat on the advisory board, has traveled statewide for feedback, finding that many Coloradans in rural areas wish they could recycle but can’t, according to Ean Tafoya, vice president of state programs for the organization.
“Not only is the community asking for it in the sense that they want to be able to do the right thing with their trash, it’s really about making polluters pay,” Tafoya says. “These are the corporations who are generating the waste, and they’re pushing the social costs onto the community. …These corporations are the ones putting a box in a bag, in a bag, in a box – and you’re left to hold the bag.”
The companies that will have to pay dues into the program aren’t thrilled, to say the least. The Colorado Competitive Council, which represents major employers in the state and is an affiliate of the Colorado Chamber of Commerce, says producers have been telling state officials about their major concerns in three areas: cost, effectiveness and legality.
Concerns, Challenges Facing Implementation
Colorado Competitive Council executive director Rachel Beck says that while the companies in the council support increasing recycling in the state, they don’t believe a producer responsibility program will work, citing the over 300 waste management districts in the state that all operate differently as an example.
“To try and put something in place for the entire state when the conditions are so different in different parts of our state, it’s a big challenge to tackle,” she argues. “One member suggested that the implementation needed to be a lot more pragmatic and that it might be a good idea to pause and maybe just focus on the front range, or even just Denver, as a start; learn some lessons from that, and then decide what to do about the rest of the state.”
According to Beck, the cost of the program will likely be passed down to people at the grocery store.
“When we were talking about this in 2022, one of the examples that we were using was an estimate from the Colorado Brewers Guild that a single, medium-sized brewery will pay $50,000 or more a year to the producer responsibility organization,” Beck says. “Large retailers and manufacturers will pay tens of millions of dollars. Those estimates were largely based on programs in Canada.”
Beck says a study on New York and Quebec found the cost of a basket of goods increased by 4 to 6 percent after producer responsibility programs were implimented. On the other hand, Zerowin cites a report from Oregon that found no correlation between rising grocery prices in Canada and producer responsibility programs. Additionally, Colorado’s law restricts producers from charging a point-of-sale fee to consumers to cover costs of the program.
“This bill was passed several years ago and corporations and industry are part of the conversations,” Tafoya says. “Some will say this is too hard to do or costs too much, but not having microplastics in our water is worth it.”
Regardless of any impact on consumer costs, producers believe the concept may be illegal. According to a legal analysis by law and lobbying firm Brownstein Hyatt Farber Schreck, the bill could be out of compliance with state law for several reasons, mainly because CAA will be given “legislative and agency functions,” according to Brownstein.
Colorado law prohibits the state legislature from delegating its authority to private companies. Though CAA isn’t part of the government, the company will be administering revenue, including setting dues, for a government program, which lawyers argue should be done by the legislature or a state agency in house.
Colorado residents didn’t vote directly on the bill, either causing the lawyers to question where the regulation is Taxpayer’s Bill of Rights (TABOR) compliant.
TABOR requires any increase in taxes in Colorado to be voted on by the population rather than passed by the legislature. The upcoming producer program is based on fees, not taxes, but the opposition’s legal analysis argues that program dues constitute a tax, and therefore the program should have been put up for a ballot measure.
“Our concerns are the same now as they were two or three years ago when we were contemplating this program,” Beck says. “That the costs were underestimated, they will be passed along to consumers, we won’t get a significant return on our investment and that the thing is going to end up in court, anyway, because it was structured inappropriately.”
Once the advisory board turns in its comments, CAA will have sixty days to respond before the Colorado Department of Public Health and Environment approves or rejects the plan. The CDPHE currently expects to open the plan to public comment from early September through early December 2025.
