Or. Admin. Code § 340-090-0670

Current through Register Vol. 63, No. 12, December 1, 2024

Section 340-090-0670 - Responsible End Markets

(1) Definition of end market. For purposes of ORS 459A.869(7) and ORS 459A.896(2)(a), end markets are defined by material as follows:

(a) For glass the end market is the entity that first uses the glass in lieu of a virgin material downstream of the beneficiation plant, if any, where bottles are crushed, for example a bottle manufacturer, fiberglass manufacturer or pozzolan (used to make cement and concrete) producer.

(b) For metal the end market is the entity that smelts the recycled material and produces ingots, sheet, coil, or other materials that are subsequently refabricated into packaging or product.

(c) For paper the end market is the entity that re-pulps the recycled material either into a pulp product that is sold to paper manufacturers or used to produce paper or paperboard products. If paper is recycled in a manner that does not involve repulping (for example, used to produce a wallboard product), the end market is the entity that uses the waste paper to produce a product that is sold without further transformation or manufacturing.

(d) For plastic, except for plastic that is recycled to produce packaging for food or beverage applications or for production of children's products, the end market is the entity that last processes flake, pellet, or other resin material containing recycled plastic prior to sale or transfer to another person that creates a new product either by placing it into a mold or through extrusion or thermoforming. This definition applies to both mechanical and non-mechanical recycling pathways.

(e) For plastic that is recycled to produce packaging for food and beverage applications or for production of children's products, the end market is the entity that places it into a mold for the manufacturer of such packaging or product. This definition applies to both mechanical and non-mechanical recycling pathways.

(f) For any recycling pathway without an end market provided by (a) through (e), the department may designate an end market on a case by case basis.

(2) Standard for responsible end markets

(a) For an end market to be a responsible end market, all entities that receive material collected for recycling in Oregon downstream of the commingled recycling processing facility or producer responsibility organization collection point (or post-collection in a supply chain without either facility) must meet the responsible standard, including:

(A) The end market(s).

(B) All entities in the supply chain leading to the end market, including brokers and shipping companies that take legal or physical possession of materials.

(C) Other locations where material disposition occurs (including landfills and incineration facilities).

(D) All entities along pathways leading to locations where material disposition occurs (including reload facilities).

(E) Entities that produce and use co-products of non-mechanical recycling (including fuels and waxes).

(b) The entities named in section (2)(a)(A)-(E) of this rule must meet the following standards:

(A) Compliant. Meaning the entity follows its own local, state, and national laws (including relevant environmental, labor, and public health laws) and treaty obligations, and is registered and permitted as required by local, state, and national authorities.

(B) Transparent. Meaning the entity is willing to be named and audited, provides chain of custody documentation tracking materials (originating in Oregon) to disposition, maintains record keeping relevant to chain of custody and material disposition in accordance with ORS 459A.962(7), and promptly documents within the chain of custody any penalties, violations or regulatory orders received.

(C) Environmentally-sound. Meaning the entity is willing to be audited and monitored for outdoor air, water and land emissions and disposal; stores and manages waste and recyclables in a way that avoids release into the environment; and manages inputs sustainably. This includes demonstrating adequate emergency response and environmental health, safety, and management plans; and

(D) Achieving adequate recycling yields. Meaning the recycling supply chain recycles or causes to be recycled at least 60 percent of each material listed in the recycling acceptance lists if applicable, consisting of the uniform statewide collection list developed pursuant to OAR 340-090-0630(4) and ORS 459A.914(4)(b), the producer responsibility organization recycling acceptance list as described in OAR 340-090-0630(3), and the list of specifically identified materials as promulgated and maintained by DEQ pursuant to ORS 459A.917 even if multiple materials are mixed together, with the remaining material managed in a responsible manner and in alignment with Oregon's hierarchy of materials management pursuant to ORS 459.015.

(E) For shredded paper processed into high-grade office paper and cartons processed into tissue, achieving adequate recycling yields means the recycling supply chain recycles or causes to be recycled at least 50 percent of each material.

(c) Recycling yield, as stated in Section 2(b)(D) of this rule, will be determined as follows:

(A) For all materials except for composite cans made of paper and steel, the recycling yield is the amount of the material that was successfully processed and recycled by the end market divided by the amount of the material that entered the first entity of the recycling supply chain downstream of the commingled recycling processing facility or producer responsibility organization collection point (or post-collection in a supply chain without either facility).

(B) For composite cans made of paper and steel, the recycling yield is the amount of the metal fraction or paper fraction of the material that was successfully processed by the end market, divided by the amount of that fraction that entered the recycling supply chain initially. If the yield of either the metal fraction or of the paper fraction exceeds 60 percent, the composite material is achieving adequate yields.

(C) Calculation of recycling yield shall exclude moisture, if practical to do so, and any contaminants that are included in the bale of received material, as well as incidental materials that are adhered to the received material but are not targeted for recovery, such as tape and staples on corrugated boxes, or inks and labels on most types of packages. In the event that DEQ sets limits for acceptable contamination and moisture in outbound bales through the commingled recycling processing facility permit program per ORS 459A.955(3), reductions to the yield calculation denominator to account for contamination and/or moisture cannot exceed either limit.

(D) For the purpose of determining whether at least 60 percent of each material is recycled, yield for individual materials that are recycled separately from other materials must be evaluated on the basis of those individual materials. For materials that are mixed together (such as a bale of mixed paper or mixed plastic) and are being used by the commingled recycling processing facility to achieve capture rates pursuant to OAR 340-096-0300(3)(a)(B), yield must be evaluated as follows:

(i) Yield for items listed in OAR 340-090-0630(2)(d) must be evaluated separately from other materials.

(ii) Yield for composite cans made of paper and steel must be evaluated separately from other materials if this material is added to the Uniform Statewide Collection List and recycled at a paper mill.

(iii) Yield for items listed in OAR 340-090-0630(2)(j) must be evaluated separately for materials identified in each subparagraph of paragraphs (A) through (D).

(iv) Yield for items listed in OAR 340-090-0630(3)(a) through (d), (f), (g) and (j) must be evaluated separately from other materials.

(v) Yield must be evaluated separately f or any materials proposed by a producer responsibility organization for addition to the uniform statewide collection list pursuant to ORS 459A.914(4)(b) or counted toward the statewide plastic recycling goal in a producer responsibility program plan or plan amendment and approved by DEQ under ORS 459A.878, if required by DEQ.

(vi) Yield for other materials that are marketed mixed together may be evaluated in total.

(E) Yield, including separate yields for materials mixed together and indicated in subparagraphs (i) through (iv) of paragraph (D) may be estimated and self-attested to by entities in the recycling supply chain, with methodological justification provided.

(3) Implementation of the responsibility standard by a producer responsibility organization.

(a) A producer responsibility organization must ensure that materials collected for recycling go to responsible end markets as detailed in ORS 459A.896(2) and this rule by completing the following two steps successively:

(A) First, a producer responsibility organization must, using a screening assessment form provided by DEQ, receive and corroborate written verification from each end market and other downstream entity that it meets the standards set forth in Section 2 of this rule.

(B) Next a producer responsibility organization must conduct a more detailed assessment of whether each end market and other downstream entity meets the responsible standard provided by section 2 of this rule, either through a verification by the producer responsibility organization as provided by subsection (g) of this rule or through third-party certification from an Environmental Quality Commission-approved program.

(b) For materials described under ORS 459A.869(7)(a) and any other materials collected by a producer responsibility organization (including collected through contract with a producer responsibility organization), a producer responsibility organization must complete the step provided by paragraph (a)(A) by the start date of the program (as defined in OAR 340-090-0720), or prior to sending materials to markets added after the start date of the program. For materials delivered to end markets for recycling on or before June 30, 2026, the step required under paragraph (a)(B) must be completed by July 1, 2027. For materials delivered to end markets for recycling after June 30, 2026, a producer responsibility organization must complete the step provided by paragraph (a)(B) within 12 months of first delivery to the end market.

(c) For materials described under ORS 459A.869(7)(b) and any other materials not collected by the producer responsibility organization, a producer responsibility organization must complete the step provided by paragraph (a)(A) within six months of the program start date (as defined in OAR 340-090-0720), or prior to sending materials to markets added after the start date of the program. For materials delivered to end markets for recycling on or before June 30, 2026, the step provided by paragraph (a)(B) must be completed by July 1, 2027. For materials delivered to end markets for recycling after June 30, 2026, a producer responsibility organization must complete the step provided by paragraph (a)(B) within 12 months of first delivery to the end market.

(d) If a producer responsibility organization completes the step provided by paragraph (a)(B) prior to and within the timeline of the step provided by paragraph (a)(A), the producer responsibility organization is not required to perform the step provided by paragraph (a)(A).

(e) Each end market and other downstream entity that receives material collected for recycling in Oregon requires only one screening assessment and an annually-audited verification by a producer responsibility organization or third-party certification from an Environmental Quality Commission-approved program. Commingled recycling processing facilities and producer responsibility organizations that send materials to the same end markets or other downstream entities may coordinate their market assessment efforts to avoid duplication of effort.

(f) DEQ may approve temporary variance to the timelines required by sections (3)(b) and (3)(c) in a producer responsibility program plan.

(g) The producer responsibility verification required by paragraph (a)(B) of this section must contain the following:

(A) A description of how a producer responsibility organization determined that the indicated entity or entities (if final disposition occurred at multiple sites) was the end market;

(B) A list of local, state and national laws and international treaties applicable to the entity as required by section 2(a)(A) of this rule;

(C) Documentation that the end market and all other downstream entities meet all requirements of section 2 of this rule, with the following exceptions;

(i) entities that take only legal and not physical possession of materials do not need to be verified for yield or environmental soundness;

(ii) entities that take physical possession of materials but do not cause the materials in a bale to undergo separation or processing do not need to be verified for yield; and

(iii) landfills and incinerators do not need to be verified for yield; tonnages received by these entities should rather be treated as yield loss at end markets.

(D) Documentation of any noncompliance with the requirements section 2 of this rule.

(E) Documentation of the qualification of the auditor required by section 4 of this rule; and

(F) Certification and signature from the auditor required by section 4 of this rule that the end market meets the requirements of section 2 of this rule.

(h) The detailed verifications required by paragraph (a)(B) of this rule and certification audits required by section 4 of this rule must occur on an annual basis, with the first renewal verification or certification audits occurring within a year of initial certification.

(i) DEQ may approve temporary variance to the required components of the detailed verifications required by paragraph (a)(B) of this rule.

(4) Auditing. To demonstrate compliance with the requirement that materials collected for recycling go to responsible end markets as required by ORS 459A.896(2) and this rule, a producer responsibility organization must conduct auditing and provide audit results in annual reporting to DEQ. These audits must include results of random bale tracking to verify chain of custody and must demonstrate and certify that end markets meet the requirements of section 2 and 3 of this rule. For the purposes of enforcement, DEQ may conduct its own random bale tracking. If it is infeasible to conduct random bale tracking safely and without violation of other applicable regulations, a producer responsibility organization may submit a claim in its program plan or a plan amendment that it is infeasible to fulfill the obligation to conduct random bale tracking. The department will review and evaluate the producer responsibility organization's claim, and if it accepts the claim, will grant variance to the producer responsibility organization with respect to the random bale tracking requirement.

(5) Definition of practicable. For purposes of ORS 459A.869(7) and ORS 459A.896(2), practicable actions that may be undertaken by a producer responsibility organization must be determined in accordance with this rule.

(a) Practicable actions may include, but are not limited to, the following:

(A) Providing financial support to help an existing end market that does not meet the standard for responsible under section 2 of this rule or an existing market that is not in alignment with the hierarchy of materials management options under ORS 459A.015(2), to upgrade or change operations to become responsible or aligned with the hierarchy of materials management.

(B) Providing financial support to divert materials to a different end market that is responsible under section 2 of this rule or in alignment with the hierarchy of materials management.

(C) Directing materials to an alternative end market if materials are directly under producer responsibility organization control.

(D) Offering to buy or take ownership of materials to directly control their flow if materials are not already directly under the control of the producer responsibility organization.

(E) Developing a new market for a material.

(b) If the results of a verification, certification. or audit under sections 3 and 4 of this rule show that an end market does not meet the responsible end market standards in section 2 of this rule, the producer responsibility organization must carry out practicable actions to meet the responsible end market standards in section 2 of this rule.

(c) A producer responsibility organization may not claim that an action is not practicable simply because it results in higher costs for the producer responsibility organization. A claim that an action is not practicable must demonstrate costs that are not justified given the resulting societal benefits. A producer responsibility organization must choose one of the following two methods for showing that costs are not justified given resulting societal benefits:

(A) Evaluate the per-ton transactional costs of all possible solutions against the benchmark for average societal benefit of recycling. The benchmark for average societal benefit of recycling is $2,017 per ton expressed in 2021 dollars, and will be adjusted for inflation no more frequently than once per year. Any adjustment shall be limited to an adjustment using the CPI - U as published by the Bureau of Labor Statistics, using calendar year 2021 as the base year which corresponds to the benchmark value. A per-ton cost lower than the societal benefit benchmark is cost effective and potentially practicable. A per-ton cost higher than the per-ton societal benefit value is not practicable.

(B) Perform an analysis of financial costs and societal benefits customized to the particular materials and practices at hand. A customized approach could be warranted under several circumstances, such as if the material in question has a societal benefit well below the system-wide average.

(d) The department will review and evaluate a producer responsibility organization claim that an action is not practicable due to costs. If the department agrees with the claim, the department will then review the material in question and its inclusion in a recycling acceptance list. If the department's review determines that an action is practicable, then the producer responsibility organization must immediately undertake that action.

(e) DEQ will consult with the Oregon Recycling System Advisory Council prior to deciding if an action is practicable.

(6) Reporting. For all end markets and other downstream entities that receive materials for which it is responsible, per ORS 459A.887(6) producer responsibility organizations must report disposition to DEQ as follows:

(a) Disposition reports shall consist of disposition data provided in a manner proscribed by DEQ, as well as all screening assessments, verification reports, and certification reports conducted in a given quarter.

(b) Disposition reports must be submitted to DEQ on a quarterly basis, with all reports other than the first report due no later than 45 days after the end of the end of each calendar quarter.

(A) The first disposition report is due December 31, 2025.

(B) No disposition reporting is required for materials described in ORS 459A.869(7)that depart from a commingled recycling processing facility, a limited sort facility, or a producer responsibility organization collection point provided under ORS 459A.896(1) prior to July 1, 2025.

(C) If a producer responsibility organization wishes to send materials to an entity listed in Paragraph (2)(a)(A) to (E) of this rule and for which no signed screening assessment is on file with DEQ, the signed screening assessment for the entity may be submitted to DEQ outside of the reporting schedule.

(c) Disposition data must:

(A) Indicate entities listed in Subsection (2)(a) of this rule that took possession of material, including the business or person name, city, state, region, and country. The entities must be ordered sequentially along the pathway of disposition, with the end market positioned at the end; and

(B) Indicate the amount of material received in tons by each entity during the quarter.

(i) Disposition must be reported using the following reporting categories:

(I) Capture rate material categories in OAR 340-096-0300(3)(a)(B).

(II) Reporting categories that are temporarily designated by DEQ when a material has been added to the uniform statewide collection list by a producer responsibility organization via its program plan per ORS 459A.914(4)(b)).

(III) Aerosol cans

(IV) Aluminum foil and products made of pressed aluminum foil;

(V) Shredded paper

(VI) Polyethylene film

(VII) Block white expanded polystyrene

(VIII) Mixed polyolefins collected pursuant to ORS 459A.896(1).

(IX) Pressurized cylinders

(X) Other categories. A producer responsibility organization may use more reporting categories than those indicated in subparagraph (i)(I)-(IX) of this rule provided that the categories used can be combined into the categories listed in this rule. A producer responsibility organization may also use alternative reporting categories if it proposes to do so in a producer responsibility program plan or plan amendment that is approved by DEQ under ORS 459A.878.

(ii) When reporting disposition for supply chains in which materials described in ORS 459A.869(7) and for which PROs must ensure flow to responsible end markets mix with non-obligated materials, such as material originating from another state, an accounting method that attributes outputs proportionally with inputs must be applied to attribute output volumes to Oregon. Examples of such methods are the controlled blending methodology and the mass balance rolling average percentage methodology as defined in ISO 22095: 2020, CHAIN OF CUSTODY - GENERAL TERMINOLOGY AND MODELS.

(C) Contain comprehensive accounting for all destinations and tonnages described in paragraphs (c)(A) and (c)(B) of this rule. Such accounting may exclude individual destinations as follows:

(i) A single commingled recycling processing facility, single limited sort facility, or the producer responsibility organization shall first calculate the total tons sent onward for subsequent processing, to end markets or other disposition, for each material by reporting category for each calendar quarter. For materials collected by the producer responsibility organization at collection points used to meet convenience standards pursuant to OAR 340-090-0640(2) and (6), the producer responsibility organization shall sum together the tons sent to end markets or other disposition by reporting category for each calendar quarter across all of its collection points.

(ii) If a single commingled recycling processing facility, single limited sort facility, or the producer responsibility organization sends to an individual end market or to an entity in the supply chain leading up to the end market less than one percent of the material in a given reporting category during a given quarter, as calculated in subparagraph (i) above, then reporting of that destination may be excluded, subject to limitations described elsewhere in this rule. This exclusion does not apply to other locations where material disposition occurs (including landfills and incinerators), nor to entities along pathways leading to locations where material disposition occurs.

(iii) A single commingled recycling processing facility, single limited sort facility, or the producer responsibility organization may use the exclusion described in subparagraph (ii) for no more than ten percent of the disposition of materials in any given reporting category for a given quarter, as determined in subparagraph (i) above.

(iv) Any tonnages sent to destinations excluded from reporting must still be reported to DEQ and shall be aggregated together and reported as "materials sent to destinations excluded from disclosure under OAR 340-090-0670(6)(c)(C)."

(7) Application of Oregon's Material Management Hierarchy. In cases of conflict between the elements of Oregon's material management hierarchy under ORS 459.015(2)(c)(C)(i) (preference for recycling pathways that displace more impactful materials) and ORS 459.015(2)(c)(C)(ii) (preference for recycling pathways that best preserve value and molecular structure), DEQ may identify the environmentally preferable option among pathways under consideration.

Or. Admin. Code § 340-090-0670

DEQ 18-2023, adopt filed 11/17/2023, effective 11/17/2023; DEQ 20-2024, amend filed 11/24/2024, effective 11/24/2024

Statutory/Other Authority: ORS 459A.975 & 468.020

Statutes/Other Implemented: ORS 459A.860 - 459A.975