Amy Westervelt | Vox

Oil companies sold the public on a fake climate solution — and swindled taxpayers out of billions

2024-07-30T12:43:35-04:00

A protester from the Extinction Rebellion climate action group wears an ExxonMobil mask outside the Africa Energies Summit in May 2024 in London.

This story was published in partnership with Drilled, a global multimedia reporting project focused on climate accountability, and was supported by the Pulitzer Center.

This spring, Democrats wrapped up a nearly three-year investigation into the fossil fuel industry’s role in climate disinformation, and asked the Department of Justice to pick up where they left off. In House and Senate Democrats’ final report and hearing, investigators concluded that major oil companies had not only misled the public on climate change for decades, but also were continuing to misinform them about the industry’s preferred climate “solutions”— particularly biofuels and carbon capture.

Sen. Sheldon Whitehouse (D-RI) and Rep. Jamie Raskin (D-MD), who spearheaded the investigation, also accused oil companies of “obstructing” the investigation, submitting few documents, and redacting much of what they did send. One ExxonMobil employee who spoke with Drilled and Vox under condition of anonymity for fear of retaliation described what the company sent as “a truly random assortment of unimportant documents.”

But there was at least one notable exception in the form of a report detailing the company’s projections for the future of carbon capture technology.

If you’ve read the New York Times recently, or seen this ad on Politico’s website or heard it on one of its podcasts, or listened to the Planet Money podcast, you may have noticed the industry’s relentlessly positive marketing of carbon capture, which aims to collect and store CO2 emissions from power plants and industrial and fossil fuel extraction facilities, so they don’t add to global warming. The Intergovernmental Panel on Climate Change (IPCC) has said carbon capture might be necessary to reduce the emissions of certain “hard to abate” sectors like steel, concrete, and some chemical manufacturing, but noted that in the best-case scenario, with carbon capture technology working flawlessly and deployed at large scale, it could only account for a little over 2 percent of global carbon emissions reductions by 2030.

That hasn’t stopped major oil companies from claiming that carbon capture and storage “will be essential for helping society achieve net-zero emissions,” that they are delivering “carbon capture for American industry,” working on reducing emissions in their own businesses (also referred to as “carbon intensity”), and delivering “heavy industry with low emissions.” But internal documents obtained during the federal investigation, as well as information that industry whistleblowers shared with Drilled and Vox, reveal an industry that is decidedly more realistic about the emissions-reduction potential of carbon capture and storage technology, or CCS, than it presents publicly.

Companies touted the potential of CCS publicly, as they downplayed the technology internally

In 2018, the oil and gas company Shell released an updated energy scenario, a forecast that served as a standard for the rest of the oil industry, in which it laid out what the Washington Post called a “radical” new approach on climate. Beginning in 1965, Shell pioneered the now-common practice of “scenario planning” for oil companies: mapping out what the industry and the world are likely to look like in the future; other oil companies will still often compare their scenarios to Shell’s.

Exxon’s own internal 2018 scenario comparison was included in the most recent batch of documents handed over to Senate and House investigators. In it, ExxonMobil compared its future projections with Shell’s rosiest forecast for the energy transition. Buried in a chart in that projection is ExxonMobil’s belief about the global potential for CCS.

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Even without the massive stamp on this page marking it as part of a set of documents obtained by congressional subpoena, these graphs would be difficult to read. The one above compares the projected number of CCS units in Shell’s scenario versus the number projected by ExxonMobil, while the graph on the right compares the two companies’ forecasts for future CO2 emissions.

While Shell’s optimistic projection envisions 10,000 large-scale CCS facilities operational by 2070, with more than 2,500 facilities by 2050, Exxon predicts somewhere between 250 and 500 facilities by 2050. Elsewhere in the scenario, Exxon also envisions that “global scale is limited” for CCS and hydrogen tech by 2050.

Exxon’s past projections were much more in line with what critics of CCS have been saying for years. The IPCC, for example, has said that even if realized at its full announced potential, CCS would only account for about 2.4 percent of the world’s carbon mitigation by 2030. In its fact sheet on CCS, the Institute for Energy Economics and Financial Analysis (IEEFA), a nonprofit, nonpartisan think tank in Ohio that produces market-based research on the energy transition, states: “It’s worth noting that not one single CCS project has ever reached its target CO2 capture rate.”

Stanford University researcher Mark Jacobson said that because it also requires energy and materials to function, CCS attached to a fossil-fueled power plant is still worse for the climate than replacing fossil energy with renewables. “They actually increase carbon dioxide emissions by doing this, in addition to increasing air pollution,” he said, referencing a study he conducted in 2019 quantifying the lifecycle CO2 emissions of various carbon capture scenarios. Even when CCS is powered by wind, Jacobson said it’s not worth doing, from a climate perspective. “If you just used wind to replace coal in the first place, you’d get a higher reduction in CO2 emissions,” he said.

And oil giants themselves have been hedging on the technology for years, despite marketing its potential. When the Environmental Protection Agency proposed requiring that power plants install CCS in its rules for power plants, for example, both fossil fuel companies and utilities expressed far less faith in the technology in their public comments on the rule than they have in their ads about carbon capture. In Exxon’s public comment, the company encouraged the agency to reduce its requirements around capture efficiency from 95 percent to 75 percent, which is more in line with the actual performance of existing CCS projects.

“Last year, when the first EPA power plant rule was released, it was going to mandate either using CCS on a power plant in order to reduce greenhouse gas emissions or to take some action that would be equivalent to adding CCS, and the response from industry was ‘Hey, the tech is really not proven,’” said David Schlissel, director of resource planning analysis for IEEFA. “Many, many comments from oil companies and utilities, in response to both the initial EPA rule and the current one, were saying this tech really doesn’t work.”

Exxon’s low internal projections for CCS back in 2018 map to the company’s own experience with the technology, too. To date, the only “successful” carbon capture project Exxon points to in its materials is its LaBarge Shute Creek gas facility in Wyoming. The Shute Creek facility is often referenced by the industry in general as a successful large and longstanding CCS project. On paper, LaBarge is responsible for around 40 percent of the total carbon emissions ever captured in the world. But the details tell a different story.

According to Exxon’s own disclosures and an analysis conducted by IEEFA in 2022, only around 3 percent of the carbon captured there (roughly 6 million tonnes) has been permanently sequestered underground. Of the rest of the 240 million tonnes of carbon emitted over the facility’s first 35 years in operation, half has been sold to various oilfield operators for enhanced oil recovery, or EOR — a process by which oil companies inject carbon underground to get more oil out — and approximately 120 million tonnes has been vented into the atmosphere.

When asked to comment for this story about its 2018 scenario plan and overall record on CCS, ExxonMobil sent the following statement by email: “False narratives that downplay our CCS efforts deliberately fail to recognize the strides we’re making in our Low Carbon Solutions business. Referencing one possible scenario from over six years ago does not represent our business outlook. We continuously evaluate our business plan based on market conditions.”

Exxon pointed to its public-facing 2023 Global Outlook as its most current thinking on the potential of carbon capture. That report states: “Carbon capture and storage is a proven and safe technology that reduces emissions from manufacturing and power generation.”

But in commenting on its scenario plan, Exxon’s spokesperson spoke only to “market conditions” and its shifting “business outlook,” not to the technology itself. The business outlook and market conditions for CCS have changed because of an increased tax credit for CCS that oil companies, including Exxon, lobbied for — and, according to the documents subpoenaed by federal investigators, heavily influenced — and that Sen. Joe Manchin (D-WV) introduced in 2021 as part of the negotiations that saw the Biden administration’s proposed “Build Back Better” legislation morph into the Inflation Reduction Act. That’s thanks to major changes to the CCS tax credit known as 45Q, which started out in 2008 paying $10 for every metric ton of carbon sequestered and now pays as much as $85 per metric ton, and up to $60 per ton stored and then used for EOR. Suddenly, EOR is CCS and CCS is profitable.

“There is no cap on 45Q and stored emissions are entirely self-reported,” Carolyn Raffensperger, executive director of the Science and Environmental Health Network, said.

The credit nominally requires companies to verify their claims, but aside from some specific requirements to ensure condensed CO2 doesn’t wind up in groundwater, the EPA is not verifying how much carbon is actually sequestered by these projects.

When asked about verification of carbon stored under the 45Q tax credit, the EPA told Drilled and Vox that it “does not implement the Section 45Q tax credit program and is not privy to taxpayer data,” and that questions about how tax claims are verified should be directed to the IRS. The IRS confirmed that it ensures companies claiming the credit have filed paperwork outlining their claims, including a lifecycle analysis, but that it does not have the scientific or technical expertise to verify that the amount of carbon claimed is actually being permanently sequestered.

“What the IPCC actually said in its mitigation report was that carbon capture might be necessary for hard-to-abate industries, but that it’s one of the most expensive options and it only equates to small emissions reductions,” said Paul Blackburn, an environmental lawyer and advisor to the Bold Alliance, a nonprofit network of frontline communities focused on protecting land and water. “So we’re doing the most expensive, least applicable thing first rather than cheapest, easiest things first, at great expense to taxpayers and with no analysis of net climate benefit.”

But even before the creation of a remarkably generous tax credit, and despite their own internal projections or challenges with the technology, major oil companies painted a rosy picture of CCS. Emails obtained by federal investigators show that Shell pulled together an “Alliance of Champions” to promote CCS, and BP worked with the Oil and Gas Climate Initiative to develop what it called “CCS enabling narratives,” while Exxon began promoting itself as a leader in carbon capture.

In the last five years, Exxon has produced multiple pro-CCS brochures and ads, comparing the carbon capture potential at industrial plants to the carbon sequestration of actual plants and trees. An NPR sponsorship from 2018, for example, describes ExxonMobil as “the company that believes that carbon capture technologies are critical for lowering global CO2 emissions.”

The company even worked on a series of kids’ videos touting CCS. In one subpoenaed email, Exxon executives asked the creative team working on the kids’ series to steer away from the idea that carbon is bad or that carbon capture is difficult. “De-emphasize concept that catching carbon is difficult or hard,” the feedback reads.

Yet that is precisely the company’s experience with CCS, according to several current and former Exxon staffers who agreed to speak with Drilled and Vox on condition of anonymity for fear of retaliation. Some of them were involved in the early days of researching CCS as a potential climate solution at Exxon, which they said only began in earnest in 2018, the same year that the 45Q tax credit first increased (from $10 for every metric ton of sequestered carbon to about $50 per metric ton).

The company’s experience before then, the sources said, was entirely focused on enhanced oil recovery — the process of injecting CO2 into a separate well to increase enough pressure in a reservoir to push additional oil out of a production well. While enhanced oil recovery, or EOR, does sequester carbon — some of it stays underground after it’s been injected — experts say the process could release 40 percent of the CO2 back into the air, and the oil it helps to get out of the ground also generates CO2 emissions when it’s burned.

Exxon is not the only one that embraced EOR for years before repositioning it as a climate solution. The industry has known for decades that compressed carbon works really well to vacuum up any remaining oil from porous rock, but it’s expensive to store and transport carbon. The industry’s embrace of natural gas helped drive down costs a bit, because while the finished product might be “low carbon,” gas often comes out of the ground bringing quite a bit of CO2 with it. That CO2 needs to be stripped out to make natural gas, a process called “gas sweetening,” leaving companies with excess CO2.

Still, the process of storing and transporting it remained expensive, so it didn’t always make financial sense to do EOR. Now, with investor-owned oil companies like Exxon, Chevron, BP, and Shell hurtling toward an inevitable decline in production rates — an inflection point referred to as “peak oil” — they need EOR more than ever. By rebranding it as a climate solution and tying it to a tax credit, they’ve not just made the process cheaper, they’ve created a new revenue stream — called Low Carbon Solutions at Exxon and Shell, Gas & Low Carbon Energy at BP, and Lower Carbon at Chevron.

The 45Q tax credit revenue will also make it feasible for these new business units to supply carbon capture where it might genuinely be needed, on facilities with hard-to-abate emissions, like concrete, steel, and ammonia plants. But the vast majority of carbon that US taxpayers are paying oil companies to capture will either be going toward generating more oil, or would have greater emissions reductions benefits had the companies opted not to drill for gas in the first place.

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The above emails, showing ExxonMobil employees’ conversations about marketing carbon capture and storage to an audience of children and Gen Z consumers, were originally obtained by congressional subpoena to a House committee and have been reproduced here by Drilled and Vox.

Clouded in carbon complexity

According to the International Energy Agency, using “naturally occurring” carbon — the CO2 that comes up with methane as part of natural gas, for example — for EOR as opposed to “anthropogenic CO2,” the emissions captured from a facility like a power plant or factory, “clearly provides no benefit in terms of emissions intensity.” That’s because absent the drilling in the first place, there would be no CO2 or methane emissions in those cases.

In the United States, more than 70 percent of the CO2 injected underground as part of the EOR process is from natural sources. That’s true of Exxon’s showcase facility — the Shute Creek facility in LaBarge, Wyoming — as well. The CO2 source there is the gas that’s being drilled. ExxonMobil calls this “anthropogenic CO2,” but when pressed, a spokesperson told Drilled it’s generated by the separation process, or gas sweetening. In other words, absent the gas drilling, there would be no CO2 emissions at the site in the first place.

Despite that, when ExxonMobil talks about itself as the “global leader” in CCS, pointing to its “more than 30 years capturing and storing carbon dioxide,” and the fact that it has captured more CO2 than any other company in the world, it is referring to LaBarge, which has been in operation since 1986.

According to a case study from MIT, where Exxon has long funded research on CCS and other industry-friendly “climate solutions,” from 1986 to 2008, LaBarge reinjected about 400,000 tonnes of CO2 a year back into the reservoir from which it came, and vented 180 million cubic feet of CO2 per day from the facility’s smokestacks. In 2008, it was ordered by Wyoming’s Oil and Gas Conservation Commission to reduce its vented CO2 emissions, which it did by building out a carbon capture system that redirected CO2 into pipelines for enhanced oil recovery.

In 2022, a study from IEEFA found that LaBarge was selling half of its captured carbon for enhanced oil recovery and venting the rest. This means that millions of tonnes of carbon the company claimed to have “captured” were ultimately emitted.

Climate scientists say CCS connected to fossil fuel use or production delivers little benefit when it comes to tackling climate change, period.

“It doesn’t make sense to use CCS to prolong our use of fossil fuels, especially to produce electricity,” said David Ho, professor at University of Hawaii and senior researcher at Columbia University. “The argument in favor of enhanced oil recovery is often that if they weren’t using this captured CO2, they’d be using some other CO2, but I don’t think you can call anything where you’re getting more oil out of the ground to burn a climate solution.”

Yet, so far, major oil companies have struggled to deploy CCS technology in any other capacity. “When we talk about the failure of CCS, we generally talk about capturing, not storage, but when you look at capacity and how much has actually been sequestered, it’s very little,” Ho said.

When CO2 is actually sequestered underground, there’s no guarantee it stays there. “CO2 has a way of moving through the air, of leaking through pipelines, and because we have no cradle-to-grave tracking, we have no way of actually knowing how much is leaking, how much is really being collected, how much is hitting the wellhead, and how much is really staying underground,” Raffensperger said.

That’s not just concerning from a climate perspective, but from a public health perspective as well. Raffensperger notes that the pipelines built to transport condensed carbon from oil fields to storage facilities, or to other oil fields for EOR, are surrounded by “kill zones.”

“These are not your grandmother’s pipelines,” Raffensperger said. “They could be lethal. We talk about the kill zone or a fatality zone around a CO2 pipeline. We don’t talk about that with oil and gas pipelines. These are uniquely dangerous and underregulated.”

Following a 2020 CO2 leak and explosion in Satartia, Mississippi, that abruptly stopped cars on roadways, caused widespread dizziness and nausea, and sent several residents to the hospital, the federal Pipeline and Hazardous Materials Safety Administration began looking into rules for CO2 pipelines. They were set to finalize that rule this summer, pending review by the Office of Management and Budget and the Office of Information and Regulatory Affairs, but that deadline has been extended to fall 2024. The lack of finalized safety regulations has not stopped the permitting of CO2 pipelines, though. The Summit pipeline, a massive project that would carry carbon across five states, just got the go-ahead in June for the first step of its construction process in Iowa: seizing land through eminent domain to make way for the pipeline.

Carbon capture and storage is a fantasy — and taxpayers are footing the bill

According to current and former Exxon employees, the company’s efforts to explore the “S” part of the CCS equation — storage, or sequestration — only began when it pulled together a team of technical experts to look for weaknesses in a 2018 US Geological Survey assessment that showed enormous potential for CCS.

“They thought the USGS was overly optimistic [about the potential of CCS] and they wanted us to basically bring industry technical expertise in to tell them their projections were overblown,” one Exxon staffer said. The team brought together to study CCS was then tasked with running an experiment to see if it was even possible to permanently store captured carbon. When the study showed that it was indeed possible, current and former Exxon staffers told Vox and Drilled the company’s executives were “surprised.”

To truly sell CCS as a climate solution, Exxon had to show that storage at scale was feasible. Former employees told us that at the end of the last decade, executives came up with a prioritized list of the company’s export and import terminals and refineries where it might be relatively easy to attach CCS. As of this year, none of those projects have been built (though the company did publicly announce in late 2023 that it was working on a fuel-cell-powered carbon capture and hydrogen project at its Rotterdam refinery, one of the options on that list).

While it hasn’t managed to build commercial-scale carbon storage itself, Exxon did acquire enhanced oil recovery company Denbury in 2023, which brought 1,300 miles of CO2 pipelines and 15 onshore carbon storage sites under Exxon’s control. Again, this system is focused on enhanced oil recovery.

“CCS is a proven and safe technology that experts agree is pivotal to achieving net zero,” an ExxonMobil spokesperson said in response to a request for comment for this story. “We’re making progress in our Low Carbon Solutions business, with current plans to capture and permanently store more CO2 than any other company.”

Fatih Birol, executive director of the International Energy Agency, has called the industry’s plan to offset its emissions with carbon capture “fantasy.”

But the US government is all in on that fantasy now.

“[The carbon capture tax credit] 45Q is not based on net climate benefit or net CO2 reductions, it’s based on gross CO2 capture,” Blackburn, the environmental lawyer, said. “Why would you think making carbon a commodity would reduce CO2 emissions? It’s like the opposite of carbon tax, we’re actually paying them to produce more of it.”

Ugochi Anyaka-Oluigbo, Royce Kurmelovs, and Molly Taft also contributed reporting to this story.

Is it time to rethink recycling?

2024-07-28T20:19:41-04:00

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Originally published on Ensia.

Criticize recycling and you may as well be using a fume-spewing chainsaw to chop down ancient redwoods, as far as most environmentalists are concerned. But recent research into the environmental costs and benefits and some tough-to-ignore market realities have even the most ardent of recycling fans questioning the current system.

No one is saying that using old things to make new things is intrinsically a bad idea, but consensus is building around the idea that the system used today in the United States, on balance, benefits neither the economy nor the environment.

In general, local governments take responsibility for recycling. The practice can deliver profits to city and county budgets when commodity prices are high for recycled goods, but it turns recycling into an unwanted cost when commodity markets dip. And recycling is not cheap. According to Bucknell University economist Thomas Kinnaman, the energy, labor, and machinery necessary to recycle materials is roughly double the amount needed to simply landfill those materials.

Right now, that equation is being further thrown off by fluctuations in the commodity market. For example, the prices for recycled plastic have dropped dramatically, which has some governments, many of which have been selling their plastic recyclables for the past several years, rethinking their policies around the material now that they may have to pay for it to be recycled. It’s a decision being driven not by waste management goals or environmental concerns, but by economic reasons that could feasibly change in the next couple of years.

Not only that, but in some cases recycling isn’t even what’s best for the environment.

The solution, according to economists, activists, and many in the design community, is to get smarter about both the design and disposal of materials and shift responsibility away from local governments and into the hands of manufacturers.

Material world

Because most people dispose of used aluminum, paper, plastic, and glass in the same way — throw them into a bin and forget about them — it’s easy to think that all recycled materials are created equal. But this couldn’t be further from the truth. Each material has a unique value, determined by the rarity of the virgin resource and the price the recycled material fetches on the commodity market. The recycling process for each also requires a different amount of water and energy and comes with a unique (and sometimes hefty) carbon footprint.

All of this suggests it makes more sense to recycle some materials than others from an economic and environmental standpoint.

A recent study by Kinnaman provides research to back up that assertion. Using Japan as his test case — because the country makes available all of its municipal cost data for recycling — Kinnaman evaluated the cost of recycling each material, the energy and emissions involved in recycling, and various benefits (including simply feeling good about doing something believed to have an environmental or social benefit). He came to the controversial conclusion that an optimal recycling rate in most countries would probably be around 10 percent of goods.

But not just any 10 percent, Kinnaman cautions. To get the most benefit with the least cost, we should be recycling more of some items and less — or even none — of others. “Although the optimal overall recycling rate may be only 10%, the composition of that 10% should contain primarily aluminum, other metals and some forms of paper, notably cardboard and other source[s] of fiber,” he wrote in a follow-up piece in the Conversation. “Optimal recycling rates for these materials may be near 100% while optimal rates of recycling plastic and glass might be zero.”

Kinnaman’s assertions about plastic and glass have to do with the cost and resources required to recycle those materials versus the cost and availability of virgin materials. But he’s not without his critics, particularly on the plastics front, given that he describes the environmental impact of making virgin plastic as “minimal,” a conclusion based more on the emissions and energy required to recycle plastic than the fact that the stuff persists in the environment forever. Still, Kinnaman’s point — that we need to be choosier about what we recycle — has resonated with environmentalists and waste management experts alike.

The commodities conundrum

Cardboard is among the materials for which recycling is most economically and environmentally beneficial.

We may also need to find a way to decouple recycling from the commodities market. What’s happening with plastics right now is a good example of why. In the eastern US, to cite just one example, prices for recycled PET plastic fell from 20 cents a pound in 2014 to less than 10 cents a pound earlier this year, while recycled HDPE prices dipped from just under 40 cents a pound in 2014 to just over 30 cents per pound today.

That’s thanks to a confluence of factors: Oil prices have dropped from US$120 in 2008 to less than US$35 a barrel today; growth in the Chinese recycled goods market dropped from its typical steady, double-digit annual growth to 7 percent in 2015; and the dollar is strong, which makes American recycled materials more expensive than their European or Canadian counterparts.

“The price drop has come at a time when a lot of cities have severe budget constraints anyway, so some communities are beginning to look more skeptically at recycling,” says Jerry Powell, a 46-year veteran of the recycling industry and longtime editor of the recycling industry trade publication Resource Recycling. “But three years ago, when we had record-high prices, they were expanding their recycling efforts.”

Powell adds that changing technologies can also play a role in determining what does or does not make sense from a recycling standpoint. Recycled plastic, for example, was largely used in carpeting 15 years ago, but these days more of it is making its way back into beverage bottles.

“Nestlé has really led the way on this — they knew they needed more recycled material and so they have invested in processing infrastructure and agreed to pay slightly more for recycled plastic,” Powell says. “Fifteen years ago there was zero recycled plastic going toward making new bottles. Now more is going into bottles because the technology has improved, we’re collecting more plastic, and consumers are more aware and are asking for more recycled content.”

If not recycling, then what?

Although recycling may not be an optimal fate for plastics, neither is landfilling. As a result, governments and businesses are looking into options such as reducing use and returning used materials to the source.

That type of “closed loop” thinking is where solutions to today’s recycling woes tend to be focused. Extended producer responsibility, or EPR, laws for packaging would require manufacturers to take back the plastic, cardboard, and form-fitting foam their products come in, ideally with the purpose of recycling and reusing it in future packaging. Such policies essentially assign manufacturers the task of collecting and processing the recyclable packaging materials they produce.

Companies can set up any sort of recycling system they want — they can continue to fund curbside pickup and pay a recycler to process the material, or they can switch to some sort of drop-off method and opt to do the recycling in house — the only stipulation being that they have some sort of a take-back and recycling program in place.

EPR not only lets local governments off the hook for paying for recycling but also effectively divorces recyclable materials from the commodities market: Companies could opt to sell the recycled material they collect and generate, but they would also have another use for the materials (producing more packaging for their own stuff) should the commodities market crash.

Currently, several European countries — including Belgium, Germany, the United Kingdom, and Ireland — have EPR laws, as do Australia and Japan. In Canada, the province of British Columbia has province-wide EPR laws, while Ontario EPR laws cover about 50 percent of disposable goods.

Germany’s EPR laws for packaging have been in place the longest (since 1991) and offer the clearest picture of the impact these laws have on waste management. According to an in-depth case study of Germany’s EPR system conducted by the Organisation for Economic Co-operation and Development, the country’s EPR laws were credited with reducing the total volume of packaging produced in the country by more than 1 million metric tons (1.1 million tons) from 1992 to 1998 alone, representing a per capita reduction of 15 kilograms (33 pounds).

“Significant design changes were made to reduce the amount of material used in packaging,” the report notes. “Container shapes and sizes were altered to reduce volume, and thin-walled films and containers were introduced.”

The overall market showed a noticeable shift away from plastics as well, with a reduction in total volume from 40 to 27 percent. Germany is one of the European Union’s top recyclers, with 62 percent of all packaging being recycled.

Efforts to pass EPR laws for packaging in 2013 in Minnesota, North Carolina, and Rhode Island met with opposition from the consumer packaged goods industry. But according to Matt Prindiville, executive director of the nonprofit Upstream (formerly the Product Policy Institute), which has long led the charge for packaging EPR laws in the US, the current commodities crash in recycling is making EPR more attractive to local governments.

“The conditions for recycling in the US have only gotten worse,” Prindiville says. “Commodity markets have collapsed, and the revenue cities were used to getting to offset the cost of covering recycling have dried up. That’s driving the conditions for EPR.”

The goal with EPR is to balance the needs of all stakeholders, from companies to recyclers to citizens. If implemented correctly, Prindiville says, it should actually benefit companies, not threaten them. “This is not a tax on your products, it’s about figuring out how to get stuff back and do something with it, and you figure out the financing yourself,” he says. “It is a market-based system.”

Burning — and better

Meanwhile, according to a 2012 report from the nonprofit As You Sow foundation, some $11.4 billion worth of valuable PET, aluminum, and other potentially useful packaging materials are being landfilled each year. A more recent report, published this year by the World Economic Forum and Ellen MacArthur Foundation, finds that 95 percent of the value of plastic packaging material alone, worth $80 billion to $120 billion annually, is lost to the economy.

While Kinnaman makes the case that landfilling those materials doesn’t cost as much as once thought, it’s hard not to see those materials as wasted if they’re just sitting in a hole in the ground. Plus, the MacArthur Foundation report points out that plastic packaging generates negative externalities for companies, such as potential reputational and regulatory risks, valued conservatively by the United Nations Environment Programme at $40 billion.

“Given projected growth in consumption, in a business-as-usual scenario, by 2050 oceans are expected to contain more plastics than fish (by weight), and the entire plastics industry will consume 20% of total oil production, and 15% of the annual carbon budget,” the news release accompanying the MacArthur Foundation report states.

That’s precisely why some countries — Sweden, for example — have come back around to the idea of incinerating garbage now that technology has evolved to reduce emissions from incinerators. Thirty-two garbage incinerators in Sweden now produce heat for 810,000 households and electricity for 250,000 homes.

The US plastics industry has been pushing for a similar strategy for dealing with plastic waste — particularly the latest class of thinner, lightweight plastics that don’t fit into existing recycling streams — but critics note that burning plastic still emits toxic chemicals. Instead, Prindiville says he’d like to see the US work toward building a circular economy, as many European countries are trying to do. “Forward-looking CEOs are really drilling down and questioning what is the role of these materials? What’s the role of packaging? And how do we ensure a cradle-to-cradle loop instead of wasting resources?” he says.

Bridgett Luther, founder of the Cradle to Cradle Products Innovation Institute, says that while legislation might help, it’s when companies also see the value in these materials that things will really change.

To that end, some companies have already created their own take-back programs, motivated by innovation and market forces rather than regulation. Luther points to the carpet industry as an example, with companies such as Shaw Floors and Interface routinely taking their carpet back to recycle it into new carpet. In the beverage industry, Coca-Cola made a commitment to use 25 percent recycled plastic in its bottles by 2015, a number it had to downgrade due to high cost and short supply of recycled material. Walmart is in a similar situation, currently struggling to find the supply to meet its goal of using 3 billion pounds (1 billion kilograms) of recycled plastic in packaging by 2020.

“That material is as good as virgin,” Luther says. “There’s a lot of interesting innovation that could happen and could happen very quickly if groups of industry got together and said, ‘We’re going to come up with our own take-back program.’”

The ultimate solution, according to Prindiville, the MacArthur Foundation team, and Luther, is better design of products and packaging further upstream to plan better for end of life and avoid the waste issue altogether. “You can regulate all day long but it’s easier to incentivize,” Luther says. “And much more interesting.”