California’s Battery and E-Waste EPR Programs are Getting an Upgrade
Two bills were recently signed into law in the state of California:
Senate Bill 1215 (SB 1215) and Assembly Bill 2440 (AB 2440). Here's what you need to know.
E-waste typically suggests unwanted keyboards, TVs, headphones — all carelessly chucked into a dumpster. But hidden in this pile of electronic trash is a bigger problem: batteries. These commodities power our devices, and have become ubiquitous in modern life. But they can be dangerous and difficult to dispose of.
Battery-caused fires at recycling plants are becoming a more common occurrence, particularly for lithium ion batteries, which are inherently flammable when exposed to high temperatures, damaged, or mishandled. One source suggests that we could be looking at 300 to 400 fires in a year in Canada and the US. The Environmental Protection Agency has flagged the issue, as an area of concern, not surprising given Americans buy approximately 3 billion batteries every year.
Why does this matter to retailers, manufacturers and waste handlers?
To reduce the number of incidents with improperly handled batteries, two bills were recently signed into law in the state of California: Senate Bill 1215 (SB 1215) and Assembly Bill 2440 (AB 2440). Both bills define the responsibilities for manufacturers and retailers going forward, and work to replace existing battery extended producer responsibility (EPR) laws in the state with a comprehensive, singular battery EPR program. This will ensure more efficient collection, handling, and disposal of used batteries. And hopefully, fewer fires.
Although action from retailers won’t be required until 2026 and state regulators will begin their work in 2025, these are significant changes for responsibly-minded entities and all who are covered under the new laws. And companies should start understanding and planning how to manage their obligations 2023 onward. Forward looking retailers should start to make detailed plans for these practices now. Data and technology solutions that streamline this process will be important. Reporting to demonstrate compliance with the new regulations will also be valuable to show that implementation of new processes is working and the ROI of following the new regulations is measurable.
Retailers especially will want to take precautions to avoid noncompliance, which can incur fines of up to $10,000 per day. Further down the supply chain, consumers will be asked to pay a fee to cover recycling costs on certain new and refurbished items, starting January 2026.
Breaking down the new California assembly and senate bills
Here’s a brief breakdown of each bill, and tips on how retailers can stay ahead of the game to ensure compliance.
CA AB2440: Responsible Battery Recycling Act of 2022
KEY TAKEAWAYS:
- The bill phases out the Cell Phone Recycling Act of 2004 and the Rechargeable Battery Act of 2006, and enacts the Responsible Battery Recycling Act of 2022 in their place.
- These new guidelines are applicable to “covered batteries,” which are defined as: batteries sold separately from a product; batteries that can be easily removed; and batteries packaged with or in products (but not necessarily embedded in a product).
- It puts the responsibility on producers (think manufacturers and brands) to ensure that “covered batteries” are being recycled. This can be done by either creating their own stewardship program to collect batteries, or join an existing one. Programs need to be in effect by April 1, 2027.
- Producers also have to keep track of batteries sold: producers will need to report to CalRecycle all batteries and brands that are sold, distributed, or imported for sale. This must be done by March 15, 2023.
- In fact, any retailer or online marketplace selling a covered battery must be “in compliance.” A retailer or distributor, therefore, cannot sell, distribute, offer for sale, or import a covered battery in or into the state unless the producer of that covered battery is listed as “in compliance.”
TIPS FOR RETAILERS:
- Adapt to new battery collection requirements: Retailers of covered batteries with five or more locations in the state need to make all locations serve as permanent collection sites for covered batteries as part of an approved stewardship program.
- Only sell covered batteries from “compliant” producers:
- Know which covered battery producers are listed on the Calrecycle “compliant” list, and refrain from selling items from non-compliant producers.
- Penalties of $10k per day can be levied against retailers caught selling products from noncompliant producers.
CA SB1215
KEY TAKEAWAYS:
- The bill amends the Electronic Waste Recycling Act of 2003 (EWRA).
- It expands the definition of “covered electronic device (CED)” in California to include battery embedded products (i.e. products containing batteries that are not easily removed within common household tools). These would typically be smartphones, tablets, smartwatches, video game hardware, and some laptops.
- It also expands the reporting and recordkeeping requirements for manufacturers.
- It introduces a consumer fee at the point of sale for all battery-embedded products sold within the state.
TIPS FOR RETAILERS:
- Understand the new recycling fee requirements for battery-embedded devices:
- Be prepared to start collecting fees on January 1st, 2026.
- Retailers may retain 3% of the collected fee as reimbursement for the costs of collecting the fee.
- Retailers may pay the fee in lieu of the customer and must explicitly note if they have done so on any receipt provided.
- Understand which devices are battery embedded by the definition, or video display device.
- Manufacturers must submit an annual notice to retailers identifying the device by brand and model number and informing the retailer as to whether the product is subject to the new recycling fee.
How should retailers, manufacturers, suppliers and brands tackle these changes?
Smarter Sorting’s Product Intelligence Platform can help retailers and brands make sense of these new regulations by simplifying and streamlining the data, and thus staying in compliance.
- Easy access to data on compliant brands:
- With the PIP, Smarter Sorting has access to the state list of compliant brands, and can instantly check this list for retailers. Retailers can avoid costly fines and be in compliance.
- Identify battery embedded devices to levy the proper consumer fees:
- Because our proprietary, ingredient-level database knows exactly what is in every device (including whether the device has embedded batteries), we can instantly identify items that consumer fees must be applied to, ensuring retailers are collecting sufficient fees for the EPR programs.
- Eliminate confusion with laws and ensure compliance
- These laws can be complicated to understand with little insight at the product and brand level. But with PIP, we have all the data tied to product identifiers, so retailers don’t need to hunt around for information or guess. It’s a time-saving, and therefore, money-saving tools.
If you have questions, please reach out to the Smarter Sorting team. You can request a demo here.
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The Latest in CPG Regulations: August 2023
Recent regulatory changes, specifically the Resource Conservation and Recovery Act (RCRA) guidance for hand sanitizers and the new hazardous waste regulations in California, are sparking changes across the industry. Here are a few key takeaways and guidance on how to chart these regulatory waters.
It's important to stay vigilant in understanding and complying with these regulatory changes. But remember -- we're here to chart these waters with you and for you. Reach out to our team at any time with questions at regulations@smarterx.com
Understanding RCRA and Hand Sanitizers
The U.S. Environmental Protection Agency (EPA) has revised its stance on the RCRA industrial ethyl alcohol exemption as it relates to alcohol-based hand sanitizers. The previous interpretation treated unused alcohol-based hand sanitizer as regulated hazardous waste but this is now likely to change, with the EPA allowing generators of unused alcohol-based hand sanitizer to consider energy recovery as a disposal path.
- In the wake of possible changes, retailers should confirm their disposal practices comply with TTB and EPA regulations. The Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations apply to recycling of industrial ethyl alcohol. Therefore, retailers should make sure their disposal partners abide by these rules. If unused alcohol-based hand sanitizer is being recycled then the generator must comply with the RCRA legitimacy factors in 40 CFR 260.43.
- For suppliers, make sure to evaluate your disposal process. Unless you are managing unused alcohol-based hand sanitizer as RCRA regulated hazardous waste, the material must be treated as a valuable commodity when it is under your control. Additionally, you should ensure that your waste hauler understands whether the material is hazardous waste or intended for reclamation. The latest EPA interpretation, published May 5 2023, allows generators of unused alcohol-based hand sanitizer to consider energy recovery. Reclaimed ethanol can be used as a fuel or fuel additive and can be burned for energy recovery within the U.S., as long as all applicable TTB regulations and RCRA legitimacy factors are complied with throughout the reclamation process.
Navigating California’s New Hazardous Waste Regulations
In response to California Senate Bill 158, the Department of Toxic Substances Control (DTSC) will now be developing new Hazardous Waste Management Reports and Plans every three years. The bill's primary goals are to establish a baseline understanding of hazardous waste management, identify data gaps, and make plans to fill these gaps.
- With this process change in mind, retailers should take the time to engage with it. You have the opportunity to provide input during the planning process, which may be a valuable chance to express any concerns or potential impacts to business operations. Also, stay updated! Keep abreast of legislative updates, especially regarding potential changes in waste management hierarchy, as it could affect the strategies to reduce hazardous waste generation.
- For suppliers, take the time to align your operations. The new regulations emphasize waste reduction, recycling, and treatment before disposal. Suppliers must ensure their operations align with this hierarchy. Also, participate in and prioritize data collection. As the DTSC seeks to fill data gaps, suppliers may have the opportunity to contribute meaningful data and potentially influence the direction of future waste management strategies in California. And finally, plan for stricter standards. With less than 19 percent of hazardous waste tracked in California classified as hazardous under federal criteria, expect California's regulations to be stricter. Suppliers should be prepared for more stringent rules and broader scopes of hazardous waste identification.
Boosting Collaboration: Supplier Insights for Retailers
In the dynamic retail landscape, a symbiotic relationship between retailers and suppliers is crucial for success. We surveyed suppliers across the country to better understand their key concerns, pain points, and aspirations when it comes to this collaboration. Let's delve into the findings and discover how retailers can better understand and support their supplier and vendor partners (in their regulatory compliance process and beyond):
1. Phthalates and SLS: A Focal Point
Suppliers are expressing mild concerns about the impact of ingredients like phthalates and SLS (Sodium Lauryl Sulfate) on their ability to sell products through retailers. These ingredient types can limit their market access due to regulatory requirements and consumer preferences that inform things like Restricted Substances Lists. Retailers should be aware of these concerns and work collaboratively with suppliers to proactively communicate about any restrictions around these ingredients, and help them navigate them while maintaining product quality and standards.
2. Transparency on Demand Drives Retailer-Supplier Relations
While ease of collaboration with third-party platforms remains important, transparency around demand emerges as a paramount concern for suppliers in their relationships with retailers. Retailers who can provide clearer and ongoing insights into demand trends and forecasts will create an environment of trust and alignment. This understanding enhances decision-making and streamlines the supply chain.
3. The Complexity of the Classification Process
Suppliers expressed their wish for retailers to better comprehend the complexities of the product classification process. The time and effort spent on uploading data to multiple platforms, coupled with the challenge of dealing with one-dimensional data, contribute to inefficiencies and increased costs for suppliers across the board. Retailers can make a significant impact by working closely with their classification partners to streamline data sharing, optimize lead times, and provide easier guidelines and steps for getting through the classification process.
4. Cost (Particularly in Shipping) is a Major Supply Chain Concern
Suppliers highlighted increasing costs, particularly in shipping, as a top supply chain concern. New regulations affecting shipping and general inflation have led to rising expenses. The unpredictability of these changes amplifies suppliers' worries. Furthermore, the anticipation of regulatory changes and retailers' proactive adaptation to these changes is a key point of anxiety for suppliers. Retailers can provide reassurance by fostering a stable environment, adapting to regulatory shifts, and working collaboratively to manage costs.
Quality, for us, means providing the best – ingredients, formulation, and performance – in each and every one of our products
5. Recognizing Suppliers' Expertise and Standards
A prevailing sentiment among suppliers is the desire for retailers to understand their high-quality standards, in-depth product knowledge, and expertise in navigating regulations. Suppliers invest substantial time and effort in formulating their products and complying with industry guidelines. Acknowledging this expertise not only strengthens the retailer-supplier relationship but also promotes a shared commitment to delivering exceptional products to consumers.
By addressing concerns such as ingredient limitations, transparency, data complexities, supply chain costs, and recognizing supplier expertise, retailers can pave the way for more collaborative, efficient, and mutually beneficial partnerships. As the retail landscape continues to evolve, nurturing these relationships becomes a cornerstone of success for all stakeholders involved. For a more detailed look into the survey findings, reach out to us at marketing@smartex.com
The Latest in CPG Regulations: June 2023
Let’s face it – CPG regulations can be convoluted. They are often (necessarily) filled with complexity and nuance that don’t make it easy to decipher how exactly they may affect you and the products you sell.
We know how important it is for you to stay up-to-date with anything that could impact your business. That's why we're here to fill you in on some interesting updates that we're keeping a close eye on. These recent updates cover four main areas: DOT PHMSA International Harmonization (HM-215Q), Vermont HB 67, and Washington SB 5144, and MOCRA. So, let's dive in.
DOT PHMSA International Harmonization (HM-215Q)
Get ready for some positive changes: The Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) has proposed a rule (HM-215Q) that will make your life easier. The new rule was proposed in May, and is likely to be finalized by EOY. Here's what you need to know:
- Button cell batteries: Good news. You'll still need to test button cell batteries installed in equipment, but you won't have to worry about sharing the Test Summary (TS) report anymore. It's a small change, but it means less paperwork and more streamlined compliance for you.
- Lithium battery markings: Say goodbye to the phone number requirement on the lithium battery mark. This simplification will make labeling lithium batteries easier and removes confusion from the supply chain.
- PSN and ID8000 updates: There are a few minor updates to the Proper Shipping Name (PSN) and ID8000. These updates will help you properly identify and ship hazardous materials. It's essential to stay informed about these changes to ensure you're on the right track when it comes to shipping regulations.
Vermont HB 67
Vermont has some interesting legislation in the works, and it's something you'll want to pay attention to. The legislation was delivered on May 12th and comes with 2025 implementation dates. Here's the lowdown:
- Funding the HHW program: The new law would require manufacturers and brands to step up and fund the Household Hazardous Waste (HHW) program in Vermont.
- Increased responsibility on the consumer for haz-waste vs. non haz-waste: This change could mean that the distinction between Haz-waste and Non-haz-waste would be as important to consumers, waste management entities, recyclers, and brands as it is to Retailers.
- Waste handling fees and brand responsibility: The legislation allows for waste handling fees, which will be redistributed to brands, and is typically based on their market share. Orphaned products (products without a brand owner) would be collectively covered by participating brands.
- Exemptions and special considerations: The law includes exemptions for certain products like pesticides, cosmetics, drugs, certain paints, and already covered electronics and batteries. Make sure you're aware of these exemptions to avoid any compliance headaches.
Washington SB 5144
Washington has also got some new regulations coming your way. The legislation was signed on May 11th by the governor, with 2027 implementation dates. Here's the scoop:
- Battery stewardship plan: If you are a “producer”of covered batteries or products containing them, you'll need to participate in a state-approved battery stewardship plan. It's all about responsible management and ensuring proper recycling and disposal.
- Who's a producer? The law broadly defines a producer as battery manufacturers, retail brands, third-party brands, licensees of a brand, importers, or anyone selling the product in the state. It's an inclusive, hierarchical definition to ensure accountability throughout the battery supply chain.
- Battery markings and compliance: although coming into force at a later date, “producers” shall supply, and retailers must collect, a certification that the covered batteries have the required "producer" marking along with the battery chemistry. Lawmakers are placing primary responsibility on the producer, but also require due diligence from retailers.
FDA's Modernization of Cosmetics Regulation Act of 2022
Although published at the end of 2022, there’s significant regulatory change coming that impacts the cosmetics industry:
- FDA regulations for fragrance allergen rules: The FDA is mandated to promulgate regulations for allergen rules within 18 months of December 29, 2023. Keep an eye out for these regulations to ensure your products comply with the new requirements.
- Fragrance allergen ingredient disclosure: Once the list of fragrance allergens is finalized, brands and manufacturers must disclose these allergens on the cosmetic product label . This means you may see changes in product labeling and information provided to customers.
- Does label disclosure equal FDA disclosure? While label disclosure is an important part of complying with FDA regulations, producers of cosmetic products must also register with the FDA and submit a Cosmetic Product Listing, which includes “...a list of ingredients in the cosmetic product, including any fragrances, flavors, or colors, with each ingredient identified by the name, as required under section 701.3 of title 21, Code of Federal Regulations (or any successor regulations), or by the common or usual name of the ingredient”. Will this disclosure of information to the FDA be the same information required on the product label? The answer will impact the logistics of information transparency in the supply chain.
Staying informed about regulatory updates doesn't have to be overwhelming. These updates are here to make your life easier. So stay in the loop, adapt your processes as needed, and reach out to our team of experts with questions at any time, and check back next month for more updates.
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