EPR funding emerges as e-commerce packaging pressures strain US recycling systems

The Recycling Partnership’s latest report reveals that, as the US e-commerce industry continues to expand, companies are making packaging lighter to save on shipping costs. However, the increase in lighter, flexible packaging formats is creating challenges for residential recycling systems in many parts of the country. 

The US-based nonprofit’s 2026 State of Recycling Report, titled The Evolving Ton: Residential Generation Data, highlights that many US states are advancing packaging EPR laws, introducing a new source of funding to support recycling systems.

Cody Marshall, chief programs officer at The Recycling Partnership, tells Packaging Insights: “Demand is becoming more urgent as non-bottle PET, PP, as well as film and flexibles grow in the residential stream. These shifts reinforce the need for targeted investment in collection, processing capacity, sorting technology, and end markets.”

“EPR represents a significant shift in how residential recycling is funded and how packaging decisions connect to the recycling system. Historically, communities have relied largely on municipal and county budgets and decision-making to fund residential recycling programs. EPR introduces an additional source of funding through fees paid by obligated producers.”

Operational pressures

The report underscores that packaging innovation and investment have outpaced the advancement in household recovery systems. 

“Tonnage and other operational metrics need to be embedded in how we measure performance,” says Marshall. “Together, these indicators give communities and facilities a clearer picture of what is happening across the system and help guide improvements to collection and processing. We cannot design recycling programs and facilities around a static view of the material stream.” 

Cody Marshall, chief programs officer at The Recycling Partnership.He explains that the rise of e-commerce has led to an increased number of small-sized boxes in waste streams as brands seek to cut supply chain waste. This requires material recovery facilities (MRF) to upgrade systems to ensure that the smaller cardboard makes it to the right commodity stream. 

“Haulers and recycling facilities need to account for these volume-related pressures when planning routes, staffing, equipment, processing capacity, and overall operations.”

Requiring upgraded equipment

The report argues that while a lighter package can have positive GHG implications, it can still add burden to the recycling system if it has low capture rates, sorting challenges, weak end-market value, or raises contamination risk.

“At the facility level, some lightweight three-dimensional packaging can flatten more easily and begin to behave more like paper on sorting equipment, making accurate separation more difficult,” says Marshall. “New package formats, sizes, colors, resins, and material combinations can also add complexity if existing equipment is not designed to identify and separate them effectively.” 

“The larger point is that packaging is becoming lighter, more varied, and more operationally complex to manage. As that mix evolves, MRF capital costs are likely to rise as more advanced sorting equipment is needed to capture materials at high rates.”

He notes that as e-commerce packaging continues to evolve, recycling must be considered. “Recovery systems will need investment so new packaging can be successfully collected, identified, processed, and remanufactured into new material to feed domestic supply chains.”

System-wide effort

Marshall emphasizes that improving recovery rates requires the whole system to advance together. Packaging design, access and community recycling program acceptance, engagement, processing, along with end markets are all interconnected.

“Strong end-market demand is especially important. Increasing the supply of recovered material only works if there are reliable buyers ready to use it. Communities, haulers, MRFs, reclaimers, and other actors across the recycling supply chain can solve many operational and technical challenges when there is reliable demand for recovered material,” he adds.

Marshall also notes that recycling engagement aimed at sustained, frequent, and accurate public participation is needed once end markets are developed. 

“Access alone is not enough. Residents also need clear tools, convenient systems, and consistent guidance that reduce the effort required to recycle correctly. That means investing in cohesive, attention-grabbing education and outreach that resonates with people and motivates the right behavior at the bin.”

“The Recycling Partnership is addressing these needs through the Recycling Participation Fund and its material-focused coalitions,” he shares.

“The fund helps communities test and scale education and outreach strategies that improve household participation and capture. The Partnership’s Polypropylene, PET, and Film & Flexibles Recycling Coalitions are investing in material-specific solutions across education, acceptance, processing, and end markets.”