Top: Graphic courtesy Closed Loop Partners

As Extended Producer Responsibility (EPR) legislation continues to grow across the United States, composters are increasingly asking a practical question: how will these programs recognize, and reimburse, the real costs associated with processing compostable packaging? A new report from the Composting Consortium offers a clear, data-informed answer.

Released by the Center for the Circular Economy at Closed Loop Partners, the report — Incentivizing Compostable Packaging Recovery Through EPR Programs: A Framework for Composter Reimbursement — outlines a proposed reimbursement approach designed specifically for composters. Its goal is to ensure that EPR programs meaningfully support composting infrastructure while incentivizing the recovery of certified, food-contact compostable packaging.

Composters participating in the Composting Consortium’s Composter Innovator Program played a central role in shaping the framework. Their real-world experience, field testing, and collaboration with the Consortium informed the development of a model that reflects how composting facilities actually operate and manage compostable packaging in practice. “This framework stands out because it was built in collaboration with composters — critical voices in EPR — while considering the needs of the entire value chain, making it both realistic and replicable,” explains Caroline Barry, Senior Program Manager at the Center. “It’s not just a policy resource; it’s a roadmap for composters to engage in EPR systems and a guide for Producer Responsibility Organizations (PROs) and regulators as they shape policies that support the future of compostable packaging recovery, and unlock incentives for composter participation.”

The report argues that compostable packaging should be treated as part of a broader circular economy strategy, and that composters who accept these materials provide value beyond traditional tipping fees. Facilities often take on additional operational complexity, including contamination management, education and outreach, and in some cases, equipment upgrades or process changes. These realities are rarely accounted for in recycling-based reimbursement models.

By centering the framework on sustained input from composters, the Consortium emphasizes the importance of aligning EPR program design with on-the-ground operations. The report reflects the view that composters possess critical operational expertise in recovering compostable packaging successfully, and that this knowledge should directly inform how reimbursement structures are designed.

This approach represents a shift away from EPR models that have historically focused on material recovery facilities and conventional recyclables, toward a more inclusive vision that recognizes organics and compostable packaging as essential components of a functioning circular system. Key components of the shift are:

• “Volume-precision” reimbursement framework: Rather than reimbursing composters based on weight or reported costs — common approaches in EPR recycling systems — the framework allocates EPR funds based on the relative volume of compostable packaging processed at each facility. This distinction is important when accounting for materials such as lightweight compostable films, which can create operational challenges but contribute little weight.
• Proportional distribution of funds: EPR funds would be distributed proportionally among eligible composters based on verified volumes of compostable packaging processed. These volumes would be supported by regular waste characterization studies to ensure consistency and accountability. Facilities already accepting compostable packaging would be rewarded as early adopters, while new facilities would have a clear incentive to participate.
• Investment across the broader composting system: The proposed framework recommends allocating funds to operational reimbursements, permitting and facility upgrades, education and outreach, and third-party waste characterization studies.

For composters and haulers, this reflects day-to-day realities. Contamination remains one of the biggest challenges to accepting compostable packaging, and investments in labeling, customer education, and collection quality are essential to maintaining clean organics streams. For composters already accepting compostable packaging, the message is clear: participation matters, data matters, and reimbursement is achievable. For those considering acceptance, the framework signals that EPR could become a meaningful tool to offset costs and support infrastructure growth, if programs are designed with composting realities in mind

The report also highlights the importance of strong end markets for finished compost. Most composters surveyed indicated that accepting compostable packaging does not meaningfully limit their ability to sell compost, particularly outside organic agriculture, provided quality standards are met.