• Colorado is the third state to approve taxing bottles, food wrappers, and other packaging.
  • The tax revenue will be used to help boost the state's below-average recycling rate of 15%.
  • From Walmart to the World Wildlife Fund, the new law has drawn a broad mix of supporters.

This article is part of Insider's weekly newsletter on sustainability, written by Catherine Boudreau, senior sustainability reporter. 

It's not every day that big business backs a new tax, especially on their own products.

But that's what happened in Colorado, which on Friday became the third state to enact a law that will slap fees on bottles, food wrappers, and other packaging to help fund recycling programs and keep waste out of landfills. Colorado — a state that prides itself on protecting the environment — has an abysmal recycling rate of 15%, less than half the national average of 32%.  

The law, known as extended producer responsibility, got rare public endorsements from food and beverage brands, including Coca-Cola, PepsiCo, and their trade group, American Beverage. Walmart and the software giant Salesforce also got on board, marking the first time each company engaged in the policy for packaging. They joined forces with environmental groups like Recycle Colorado, World Wildlife Fund, and Sierra Club. 

For brands and retailers, boosting US recycling rates is key to meeting sustainability targets to use more recycled materials and less virgin plastic. For Salesforce, whose eponymous headquarters building soars over the San Francisco Bay, backing the Colorado law was part of a new policy push announced Wednesday to protect oceans' role in fighting climate change. 

Plastic pollution is a major threat to the world's oceans, which have absorbed more than 90 percent of the excess heat trapped on the planet because of carbon dioxide and other greenhouse-gas emissions in the atmosphere. Rising water temperatures and pollution is harming fish and other marine life, a food source for billions of people. 

Only 9% of plastic ever gets recycled, while an estimated 11 million tons of it ends up in the ocean each year — or more than a garbage truckload every minute, according to the United Nations.

"We can't just deploy climate solutions on land and destroy the oceans," Whitney Johnston, Salesforce's director of oceans sustainability, told Insider. "Plastics is also a petroleum-based product, so we need to be strategic about how much we're producing and keep it in circulation."

The broad coalition of industry and environmental groups backing Colorado's program set it apart from similar laws enacted in Maine and Oregon last year, which didn't attract much support from big business. 

The difference is in the design. In Maine, lawmakers and environmental groups were worried that giving industry too much control over a recycling program would maintain the status quo. The state's law gave regulators the authority to set packaging fees and manage the money, with input from brands.

In Colorado, these responsibilities will fall entirely to the industry, which will develop a plan with approval from an advisory board and a state agency.

"The reason we had so many industry partners is because of the structure," Liz Chapman, the executive director of Recycle Colorado, said. "They know what it takes to get materials back into their systems and see this as an opportunity to innovate."

That doesn't mean there wasn't opposition in Colorado. Ameripen, a trade group that represents plastic and packaging makers, as well as brewer Molson Coors and some state business groups, lobbied against the law. Molson Coors brews its namesake Coors in Golden, Colorado.

Dan Felton, the executive director of Ameripen, told Insider that the group objected to the law requiring companies to fund 100% of the recycling system without any controls on the potential costs. Ameripen supports a shared-responsibility model, where taxpayers pick up some of the tab.  

"We worry it will be a blank check," Felton said. 

Colorado will know the price tag of expanding recycling to more residents after a needs assessment is finished by January 2024 at the latest.

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