How is legislation affecting the flexible packaging industry? How is the Biden Administration involved? Tune in to hear what Alison Keane, President and CEO of the Flexible Packaging Association (FPA) has to say.
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Transcript
00:00:00 Sara Januszewski
I wanted to welcome everyone and thank everyone for joining us for the second episode of the Flexible Packaging Round Table. If you are new here, this series is an educational tool to provide insight on flexible packaging. Today we will be speaking with Alison Keane, President and CEO of the Flexible Packaging Association (FPA) about legislation that is affecting the flexible packaging industry and the work that she is doing with the Biden administration. And I am your host, Sara Januszewski.
00:00:52 Sara Januszewski
Can you just give our viewers an overview of everything that is happening or what is new as it pertains to legislation at the federal level?
00:01:03 Alison Keane
Sure, so probably nothing new, but definitely some more opportunities with this new administration and with the new Congress, so different makeup both on the House and the Senate side. Certainly different makeup from the agency side under the new Biden administration, just a complete change up from agency heads to all committee members, but are our two biggest issues at the federal level will continue to be trade and with more specificity, aluminum foil and the tariffs on aluminum foil, and the Midwest premium on aluminum foil so we continue to work on that, and I think we’re going to see a shift from sort of the tariff policy to a more trade agreement policy. I mean, there’s a reason why we have these tariffs, and we have this ongoing negotiation with folks like China. We do want to protect investment and U.S. jobs. We also want to be able to get the substrates that we need to do our you know our jobs with regard to pasture, so we’ll see a little shift there, but I figured since it’s Earth Day, let’s focus on sustainability because I think circularity for packaging is also a really big important issue that we’ve always worked on but we have much better opportunity under the Biden administration, I think in this new Congress to actually move the ball there.
00:02:29 Alison Keane
So, there’s a couple different pieces of legislation that we’re looking at, two or three of which are sort of repeats of the last Congress that have either been introduced again, or we’re waiting for them to be introduced and once the Recover Act, that has been introduced again in the House, and that has to do with grants and tax incentives for recycling infrastructure basically saying look we need new infrastructure in the United States for packaging. We used to collect it and ship it all off to China and China is not taking it anymore and, in most cases, even what they did take some would leak into the environment and none of us want to see that, right? We want to capture it. We want to reclaim it. We want advanced recycling so that we can reprocess it and reuse it, and they’re looking at a lot of plastics, but we know in the packaging industry that it’s not just plastic pollution, it’s you know all solid waste pollution and litter is bad. We want to reclaim it. We want to reuse it.
00:03:35 Alison Keane
The other pieces of legislation that haven’t been reintroduced is the Recycle Act, which is almost the Senate Companion of the Recover Act, which has been reintroduced, pretty much exactly the same way as it was last year. We helped to draft that legislation with some of our counterparts at the American Chemistry Council and the Plastics Association. So, the Recycle Act goes again to that like new infrastructure. How do we invest in consumer education so that they know what can go in, what can’t go in so that we’re not terminating the current recycling streams. So, they go hand in hand, investment in new infrastructure and then investment in education and outreach to make sure that infrastructure is utilized in the right way?
00:04:23 Alison Keane
A couple other pieces of legislation, Save our Seas ACT 2.0 that really goes to marine debris and investment from the United States in overseas issues where there still is leakage, like in China. Most of the plastic pollution we know comes from about 9 different rivers in Asia, Euro-Asia, India and so, how can we help as the more developed country try to help stem that tide and try to clean up some of what was our mistake as we exported a lot of this material. We may see a Save our Seas 3.0 and we think we can do you know some further investment in infrastructure and move the ball regarding collection and clean up. So moving forward, cleaning up what the mess that’s already there and making sure that we don’t create new mess with our packaging.
00:05:19 Alison Keane
Then there’s a couple bills that we don’t agree with, right? So, there’s the climate action bill that’s just huge and has a lot of moving parts, but one of the parts is also a stand-alone bill, that’s called Break Free from Plastic Pollution. Sounds great. I vote for that right? Nobody wants that. But the devil’s in the details. These are big, big, lofty bills. I don’t think any of them will move in the shape that they are, and there’s pieces that we could take, and we can learn from. So, for example, the moratorium on new resin production in the United States. We’re not going to support that right? I mean, why would you want the United States companies to have to buy outside the United States instead of you know, internally or globally shift that market, right? So that’s not helpful, but it spurs conversation. That’s why it’s in there, but there’s another portion of it that talks about extended producer responsibility that might work, again, devil’s in the details, how it gets implemented, but that would be a packaging fee that could move parallel to infrastructure investment tax credits, you know, anything that helps spur investment in innovation and advanced recycling could move hand in hand with the packaging fee that goes to help subsidized, stabilize the current infrastructure because again, if you’re an operator or you have an advanced recycling, you know a facility right now you need to scale it up. Are you going to sit on that? Investment has to be just yours or can there be a real public private partnership to do that? And that’s really what we’re looking at, so you know good moving parts to it.
00:06:58 Alison Keane
And we have a lot of policy drivers too that aren’t in legislation yet that we’ve been talking to both the Senate and the House on. One of it is the Recycling Leadership Council’s blueprint for recycling in the United States and talks about easy low hanging fruit, like we don’t have a harmonized definition of recycling even across federal agencies, let alone at the state or local level, which is generally how you know our recycling gets done. So, let’s start with some things like that, and then we can go further. We can talk about financing. We could talk about extended producer responsibility and that fee or tax on packaging to help support infrastructure. But you know what we also need to do an assessment, what does that look like? You know we could raise a ton of money tomorrow with a fee on packaging that consumers would never know, right? It’s going to be so minuscule but if we’re raising all that money, shouldn’t we be doing some upfront assessment on where the money should go and what the most efficient system looks? EPA could easily, the Environmental Protection Agency, could easily be a force for solutions. They’ve done it for tires in the past. They’ve done it for used oil. The past guidance, you know, sort of harmonization as we go forward, and then the recycling partnership. If you’re not familiar with the recycling partnership. That’s a supply chain, everyone from resin producers, paper producers who are converters to waste haulers to recyclers, and of course, the consumer brands that use our products and they have a great, it’s called a circular economy accelerator and they have a great position white paper on just these type of policy drivers and what it could look like in every segment.
00:08:45 Alison Keane
So, these are the type of conversations we’re having with the Biden administration and in Congress and again, I think there’s just a tremendous amount of opportunity now with the new Congress Administration to really move some of these solutions to our packaging. The need for packaging, circularity, and the need to not have it become waste at its end.
00:09:09 Sara Januszewski
It’s really exciting. All the stuff that you guys are doing and I love hearing how passionate you are about all that.
00:09:18 Alison Keane
Yeah, it’s so important, right? Because we all. I think if COVID-19 has shown us anything it’s the importance of the right package for the right product for protecting that product for sterility, health, and hygiene. I get on my soapbox because it’s, you know, the time to strike is now as people understand the importance of packaging and want that packaging. We’re not talking about bands anymore, despite the moratorium on new resin production in that in that one bill, but we’re not really talking about dancing work we’re talking about investments that ensure that once that package is done, for the first time in its life, it gets a second life.
00:09:57 Sara Januszewski
Got it, awesome. Love to hear it, but you had mentioned at the end there, talking more about the circular economy. Can you explain how the administration and Congress are further working together to develop a true circular life for our products and why the circular economy is so important for flexible packaging?
00:10:21 Alison Keane
Sure, so two different things. I’ll start with why it’s so important for flexible packaging. So, we’re having a lot of conversation, circular economy is not just recycling and end of life management. Circular economy really is looking at the holistic from the beginning of the package to the end and making sure that package comes back into commerce, gets used again. We’ve solved the circularity problem all the way up until that very last step, right? And work better for the environment, where lighter weight, we can protect the product with the least amount of packaging. I mean, currently even with no recycling, we’re putting less in the landfill than cans and boxes and glass that are fully recyclable. Less greenhouse gas emissions, less water uses, less energy use, so there’s a reason why brands have moved to this packaging type, and we can’t lose sight of that, but we also need to solve for that last little piece, and I think this Congress and the Biden Administration they look at it from a couple different lenses. One is it creates jobs. If we create jobs in the United States for recycling, for reprocessing, for reuse, that’s a whole infrastructure in and of itself, and we didn’t talk about the infrastructure package, but we will probably have an infrastructure package by this summer, and we’d like to see some recycling investment in that because of it. It’s a commerce issue, it creates really good jobs. It also creates another product. It creates another commodity. You know our folks are looking at recycled content. They’re looking at compostable structures. They’re looking at a whole host of innovative, sustainable packaging, but if you can’t get that material to have post-consumer recycled (PCR) content, then it doesn’t do anybody any good. So, it’s really looking at that from an investment angle too, from a new commodity, and wouldn’t it be great if the United States was the game changer. I talk to our resident supplier companies they always say don’t you want to sell your product twice because that’s what we’re talking about. You know we’re never going to completely, in order to have post-consumer recycled (PCR) content, you still need virgin production. You just need them to work hand-in-hand and then you need to protect the product and make sure you have the right packaging for the product and you don’t have the unintended consequences of oh, I can use post-consumer recycled (PCR) content, but I’m going to have to use, you know, 50% more virgin pulp to make it right. So, we have to make sure that it’s reasonable and it’s a feasible approach.
00:12:56 Alison Keane
The third lens that the Biden administration is looking at that really goes to that other portion of the Recycling Leadership Council’s blueprint is environmental equity. You may live in a very well to do neighborhood or an established city that has great recycling opportunities and like I live in the suburbs of DC, I have composting, and I get to put my protein out every week, in addition to my recycling, in addition to my yard waste, I mean we’re living the dream, right? And then you talk to some folks in the same in Maryland. In the same exact state. All of their recycling, they don’t get composting. They have to self-haul it to the recycling center. So, access to recycling access to that infrastructure, making sure that everybody can partake. Again, if we build it, you’re going to have to want the consumer to use it, but if they don’t have access to it or you make it so hard that you have to throw it in your car and drive it down the road, people are not going to do it so they’re looking at it there.
00:14:04 Alison Keane
But the other issue they’re looking at is where are you citing recycling plants, reprocessing plants so they’re looking at environmental justice issues. We don’t need an advanced recycling facility in every single state, and we don’t need to cite it in the poorest lowest socioeconomic area just because that might be where the cheapest land is, right? We can help move that and subsidize that so that it’s in the appropriate industrial area and it has the appropriate, you know, we hear a lot about advanced recycling. Is that just a fancy word for incineration? Absolutely not. We’re talking about getting this material, whether it’s gasification or pyrolysis, getting this material back down into a monomer that you can make another resin out of, getting the aluminum foil out of that multilayer structure, getting that ingot, and putting it back into aluminum production. So, we really are talking about true recycling, and we want to make sure that folks know if we’re citing these facilities, they’re going to have the appropriate pollution control and they’re going to fulfill environmental regulations just like any other solid waste or mechanical recycling facility would do. So, they’re looking at it, you know, sort of in those three different lenses, and the conversation has even the staffers that we’ve talked to and the representatives and senators we talked to are really engaged. They know the issue, and they’re really looking for solutions.
00:15:33 Sara Januszewski
Great, and then just to build off another thing that you had talked about earlier, with the aluminum and can you elaborate more on the existing trade policies that are in place and how they have negatively impacted our industry and what we’re doing to change that?
00:15:58 Alison Keane
Sure, so you know, it’s important for folks to know there’s a really good reason why we use the packaging that we do. It protects the brand owners product. It gets it to you safely. It gets it to you sterile, it extends shelf life, and make sure that it’s fresh even at your home longer once you buy it. We’re big into medical device packaging as well. People don’t think about that, but you think about you when you open the package for sutures, or you go, and you get a knee replace because my mom got a knee replacement in the middle of the pandemic. When they open that package that’s got your new knee in it. It better be sterile, right?
00:16:37 Sara Januszewski
Definitely, yes.
00:16:37 Alison Keane
So, a lot of aluminum foil is used when you open your chip bag, that’s why it’s there. It’s great barrier protection for any odors, for gases, bacteria, you name it. We don’t make the thin gauge aluminum foil in the United States in the capacity that we need it to use for food packaging, medical device packaging, pharmaceuticals. It just doesn’t exist and the reason it doesn’t exist is there’s very few aluminum plants left in the United States and what they make is the higher gauge stuff that we use at home? The aluminum foil we use at home or the pans that you use your Turkey, you know, put your Turkey in for Thanksgiving. You can make a lot more money and it’s a lot easier to make, so we have often had to go outside the United States to import it. They long story. This could be a whole episode on its own. They put some aluminum tariffs in place under not very well used security statute that basically is usually preserved for wartime, right? Like oh, we need aluminum production here because we need to make B52’s because we got to go to war and we don’t have the capacity here and that puts us in a really bad situation from a security standpoint. Ok, but none of us, I mean, I think Coors Light and Hershey Kisses are absolutely necessary for, you know, security of the United States, but nobody thought it would extend down to this aluminum foil that we use, and it did, and it really impacted the cost because now not only did you still have to go outside for a lot of that and import it, you are paying additional fees on that. In addition, they shut down, for the most part, any imports from China by putting even more additional fees on that like to the tune of 140%. That’s a huge increase and then everybody had to switch, and you had to find new suppliers.
00:18:43 Alison Keane
Well, we work in food and medical. You can’t just switch suppliers. You got to get FDA approval. You got to go through a process, so that added cost. And then to add insult to injury, the last piece was the Retaliatory Tariffs that China as well as Europe, even Canada and Mexico, put on us for a while to sort of, you know, get back at the administration so it’s a political nightmare. It continues to be, but like I said at the beginning, at the Biden Administration, I think is a little bit more thoughtful. There are reasons why we need to protect United States manufacturers and United States production.
00:19:20 Alison Keane
What we don’t want to do is have that unintended consequences to the downstream users, like flexible packaging, that all of a sudden, you know they’re paying excrementally more for material that they couldn’t get the United States even if they wanted to and believe me, they want to, right? We want to use our US suppliers. I think what the Biden Administration is going to start to look at is how do we correct some of those inequities with some of the our global partners, global communities that we buy from through trade agreements versus these tariffs going back and forth, which are really just sort of shots in the dark and are supposed to move you to an agreement, but really they haven’t over the last four years, so that’s what we’re looking at going forward.
00:20:07 Alison Keane
They’re not going to disappear overnight, but hopefully we’ll have more, what’s a good word to say? We’ll have more intelligent conversations with our global partners in trade, versus just, you know, we don’t like you so we’re going to tax you to death type of thing.
00:20:27 Sara Januszewski
I mean, I can definitely say that I have learned a lot, and this has been super interesting, and I guarantee that the people that are on can say the same.
00:20:36 Sara Januszewski
Is there anything else you want to add to wrap this up?
00:20:41 Alison Keane
Sure, I would just say get involved in the conversation. Feel free to reach out to me. I’m coming to you from Instagram through our Perfect Packaging website, but I’m also accessible just by regular email and love to have conversations about this. And we are having a tremendous amount of conversations with regards to circularity for packaging at the state level as well, so again that can be a whole other episode, but what I’d say is that at some point we don’t want a 50-state approach to this right? So, at some point we actually may be going back to the federal government. States can move much, much faster. We maybe have to go back to the federal government at some point say this is a commerce issue, right? We can’t have different recycling standards and different packaging fees and maybe even different labeling requirements for recycling of our packages in even two or three states, let alone 50, right? And there’s at least 15 states that are working on this right now, so it may be that it morphs not to what can the feds do now, which is what we’re talking about, to what are the feds going to have to do to try to correct this for us if we start to see so many different divergent state systems going on. So, this is a long conversation. This is an absolutely wonderful issue to solve, and we will solve it, but it’s not going to be overnight. And just get involved in the conversation because we need everybody in the supply chain to be involved and to help us with those solutions.
00:22:09 Sara Januszewski
That’s fantastic, yeah, definitely. So, just to conclude here, I just wanted to thank you Allison for joining us.
00:22:19 Sara Januszewski
We got a question from Evan down below says “Would you come back and talk state to state?”
00:22:27 Alison Keane
Yeah, I would absolutely come back and talk about all the different states, yeah, what they’re individually doing, versus having like a live just for Wisconsin, I could do that too, I don’t care. Whatever, pick my brain, whatever you want.
00:22:45 Sara Januszewski
I’m not sure what the weather is like in Maryland, but here today I swear we experienced all four seasons. We had some rain, then we had some snow and now I’m looking outside my window. It is beautiful and sunny out.
00:22:59 Alison Keane
Alright, well if I have to come in person, let’s do it like in July or August.
00:23:03 Sara Januszewski
Ok, yes. Trust me, you would rather come then. Well again, thank you for your time. I really enjoyed this!
00:23:35 Alison Keane
Excellent, thanks Glenroy for this platform!
00:23:41 Sara Januszewski
Thank you so much Alison. Bye now. Take care everyone.