Industry leaders fly in to Washington to talk plastics recycling policy

Washington — More than 100 plastics industry executives took to Capitol Hill March 19 to lobby messages around recycling and plastics environmental issues, as well as push Congress to revamp a research and development tax credit they say is hurting their bottom lines.

Companies from both the Plastics Industry Association and the American Chemistry Council fanned out to more than 100 Congressional offices as part of their annual fly-in, with leaders of the effort saying they want to talk both policy and the value of plastics.

"Because Congress hasn't moved a whole lot of legislation, priorities are still first and foremost to make clear that plastic is essential," said Matt Seaholm, president and CEO of the plastics association.

"If we can recognize the essential nature of plastic, then we can really get to the next step, which is talking about potential policy solutions.

"We fully recognize that there is a plastic waste issue, and we need to keep more plastic in the economy and out of the environment," Seaholm said. "And a lot of that comes down to establishing the value of that plastic waste. And a lot of that comes back to recycling."

Plastics issues have been getting active debates in Washington, even if the chances of major legislation getting through Congress is small.

Just in the two weeks before the fly-in, for example, a Senate committee held the latest in a series of hearings on packaging waste, examining extended producer responsibility policies. And ACC leaders sent a letter to President Joe Biden requesting a meeting to discuss U.S. policy in the plastics treaty talks.

Ross Eisenberg, the head of the ACC unit America's Plastics Makers, said its companies want to move constructive solutions forward.

"From the Global Plastics Agreement to domestic regulatory initiatives, to the latest science on bio-based plastics, a wide variety of issues are important to America's Plastic Makers and we want to be constructive partners in advancing effective and responsible solutions," he said.

"ACC requested a meeting last week with President Biden and this week we're walking door to door on Capitol Hill," Eisenberg said. "Our industry wants constructive dialogue, we want to make sustainable change, and we want effective policies in place at local, federal and international levels to accelerate change."

Outside of the industry, environmental groups have made plastics a focus of their own Washington work.

The World Wildlife Fund, for example, dedicated its annual Congressional lobby day March 7 to plastics as its grass roots members traveled to D.C. to meet with lawmakers and discuss reuse, recycling and reduction policies.

For the plastics association, Seaholm said policy points include support for two relatively technical, recycling-related bills that unanimously passed the Senate March 12: the Recycling and Composting Accountability Act and the Recycling Infrastructure and Accessibility Act.

The bills, which have bipartisan support but must now pass the House, would direct the Environmental Protection Agency to collect more data on recycling and composting, and create a pilot program for better funding of recycling in rural and underserved communities.

Those two bills have garnered support across the spectrum of groups, with WWF and the Consumer Brands Association also endorsing them.

As well, Seaholm said the plastics industry aims to build support on Capitol Hill for chemical recycling.

"One of the things that policymakers should always keep in mind is don't stifle innovation," Seaholm said. "One area where we've seen some dramatic innovation improvement over the years is with recycling technologies, specifically advanced recycling. We're going to make the case that it should be encouraged by Congress and not stopped."

The fly-in comes on the heels of another plastics group, the PET Resin Association, joining an unusual lobbying coalition that came to Washington in late February to push a national bottle bill.

That coalition, which met with lawmakers and their staffs, said the 10 states with container deposits have a 65 percent recycling rate for their beverage containers, including PET bottles, while the other 40 states average 24 percent.

They argued that businesses hungry for recycled PET should support expanding bottle bills.

Seaholm publicly backed bottle bills in Senate testimony in 2022. In an interview before the fly-in, he said the plastics association supports that idea but suggested they may not be "taking the lead on it."

"Conceptually, we're supportive, it works. There's no doubt a bottle deposit can be successful," Seaholm said. "It doesn't necessarily work for every plastic item. The necessary technology and infrastructure are there for bottles.

"I think our association will be supportive of something like that but not taking the lead on that," he said. "We've got a lot of other things that we're talking about."

He said the association's member companies will oppose broader plastics legislation in Washington in their fly-in meetings, including the Break Free from Plastic Pollution Act and the Reduce Act, which would put a fee on virgin plastic production to incentivize recycling.

The plastics industry, however, does not have a similarly broad piece of legislation as an alternative that it backs in Congress.

ACC leaders noted in February, for example, that their effort to build support in Congress for such an alternative framework bill to Break Free was proving to be a more difficult climb than anticipated.

Still, ACC has general principles it has endorsed for federal legislation, including recycled-content mandates for plastic packaging, EPR, recognition of chemical recycling, national recycling standards for communities and a federal government study on the impacts of different materials.

Seaholm said, in general, his association also backs those ideas.

"I think we have broad agreement on all of those things," he said. "It's always, you know, the devil's in the details."

Recycled-content mandates are an area where details matter, he said.

"Where there's agreement is that there absolutely should be recycled content requirements as part of policy," Seaholm said. "It always comes down to rates and dates. I think there are some that feel that we need to be very aggressive on the timetable and others who say we are happy to be aggressive so long as there is supply."

Seaholm said that both the small margins of control in Congress, and a feeling from some lawmakers that waste and recycling problems belong more to states are impediments to big legislation.

"Congress has a lot of big things going on, first and foremost is funding the government," he said. "And I think you are still kind of seeing plastics as one of those issues of, 'Yes, we understand.' I still think there's a little bit of delegation to the states on Capitol Hill."

"It doesn't mean they won't act at some point; it doesn't mean they're not receptive to the discussion," he said. "You've got the tightest margins in history in both chambers. That means what gets through is pretty much just the big stuff."

But there was one smaller area where Seaholm raised the possibility of legislation — measures to control plastic pellet leakage from factories.

More than 40 members of Congress introduced a bill earlier in March, the Plastic Pellet Free Waters Act, which would direct EPA to write the first federal regulations specifically limiting discharge of resin pellets from plastics factories.

Seaholm said his association opposes that bill but sees chances for stronger pellet control language in the third iteration of the Save Our Seas legislation, which lawmakers have said they are negotiating after the first two iterations passed in 2018 and 2020.

"We certainly do see an opportunity for some stronger language in Save Our Seas 3.0 … certainly in the process of prevention of pre-production plastic loss in the environment," Seaholm said. "We've had some conversations with members of Congress. I know ACC has as well. We'll be arguing for some language for that."

He said federal regulations could point to the industry's Operation Clean Sweep program, a voluntary effort to control pellet loss.

"We think that's something that can be expanded on and pointed to as a federal guideline," Seaholm said.

Outside of environmental issues, the industry's lobbying foray also took up a tax policy change that was a focus for the same fly-in a year ago — a Trump-era law that changed research and development tax deductions.

A provision in President Donald Trump's 2017 signature tax cut required companies to deduct R&D expenses over five years, rather than deducting 100 percent in the year the money is spent.

The extra revenue collected from that change was designed to offset revenue losses from other tax changes, including cuts in the corporate income tax rate.

But the implementation of that provision was delayed until 2022, when companies started seeing their tax bills rise, in some cases dramatically for smaller manufacturers. That lead to pressure on Capitol Hill.

"The R&D tax credit is a big one," Seaholm said. "We'll keep making a push and hopefully that gets over the finish line sooner rather than later."

Legislation that would restore 100 percent deductions in the year money is spent passed the House in January, where it was paired with an expanded child tax credit. Other plastics groups including tool makers have spoken in favor of restoring the previous R&D tax provisions.

The association estimated that plastics manufacturers spent $18.9 billion on research and development in 2021, which was 4.7 percent of total shipments.

"We would certainly encourage the Senate to get a deal done because the R&D tax credit is very important to our industry," Seaholm said.