How Politics And Litigation Impede Innovation In Plastics Recycling

Plastics are an indispensable, ubiquitous part of modern society. Due to their unique qualities, incredibly light weight, and ability to be formed into any shape or size, plastics provide essential components in hundreds of products we use every day of our lives. Unfortunately, the processes of making, recycling, and disposing of plastics are not well understood by policymakers or the public and are often subject to demonization and litigation by the industry’s opponents.

Makers of plastics could face another high-profile court case on a new front in the coming weeks deploying a novel theory of climate-related damages. California Attorney General Rob Bonta, whose ambitions for higher office are not a closely held secret, told Reuters in late April his office is close to wrapping up an investigation based on a legal theory that would seek damages related to the impacts of plastics waste from manufacturers, targeting ExxonMobil as the first test case.

“We are soon going to be ready to get to a decision based on all of our investigations in the coming weeks,” Reuters quotes Bonta saying. “The lies and deceit Exxon used to cover up the truth about the non-recyclability of plastic is well documented.”

Bonta launched his investigation in 2022 at about the time the California legislature was enacting SB 54, a law that places a set of new demands on manufacturers related to plastics recycling and disposal. At that time, ExxonMobil called the claims “meritless,” but has remained silent on the matter since. Even if merit does exist, wouldn’t Bonta also be obligated to pursue similar claims against the large numbers of counties, cities, and towns whose local governments have overstated the percentage of plastics in programs they’ve implemented over the last quarter century?

Both industry and governments everywhere have long struggled with the best means of either recycling or disposal of used plastics. Some governments, like the state government in California led by Gov. Gavin Newsom, have attempted to attack the problem by invoking a seemingly endless stream of laws and regulations, always assuring the public the costs will be borne by manufacturing and other corporations who make and use the products. But such costs will inevitably be passed on to consumers in the form of higher prices for those products.

SB 54 is a good example of what has been happening in the Golden State in recent decades. Passed in 2022, SB 54 places a series of demands on manufacturers that many in the industry believe will be impossible to fill. Among other requirements, the law requires companies to meet the following targets by 2032:

• Sell 25% less single-use plastic packaging and food ware in the state.
• Make all single-use packaging and plastic food ware recyclable or compostable.
• Recycle 65% of single-use plastic packaging and food ware.

Because of concerns that fit-for-purpose alternatives to plastic packaging and food ware do not currently exist in any scalable way, and that only about 9% of plastics are currently recycled, manufacturers in the state opposed the bill and are concerned about their ability to comply with its demands.

“The challenge is that the legislature keeps adding on to things in the spirit of increasing recycling, and SB 54 is a great example of that,” Lance Hastings, President & CEO at the California Manufacturers & Technology Association (CMTA) told me on a recent interview. “Unfortunately, we were in opposition to the legislation. Some of our opposition was related to the mechanics of the legislative process, but also because our members are making significant investments in recycling infrastructure and SB 54 tilted at that landscape.”

Hastings says a big part of the problem with legislation like this is that it attempts to force all the state’s urban, suburban, and rural areas into a one-size-fits-all approach. “There is no universal solution, and the public is being left out of the discussion,” Hastings says. “Because they [policymakers] always look at a macro solution when they’re passing a state law, it affects everybody.” He adds that the key is working cooperatively to change individual behaviors by implementing solutions tailored to the needs of local communities.

The Bottom Line

ExxonMobil is one of the country’s leading makers of plastics and is investing billions in development and implementation of an advanced recycling process that would dramatically increase the percentage of plastics that can be recycled and reused by manufacturers and consumers. The company is already finishing out an advanced recycling unit at its Baytown Refinery plant that can then be expanded to a number of locations across the country and internationally.

Mounting yet another lawfare-style campaign of litigation targeting a segment of the industry that is already investing billions in new solutions to what everyone acknowledges is a significant problem will only serve to rob companies of legal certainty, stall innovation, and make it harder to reach major future investment decisions. It all seems so counterproductive, yet here we are.