Lubricants, Wholesaler Groups Talk EPR Lawsuits

Why It Matters

If successful, the lawsuits could curb costly EPR fees that threaten profit margins and market access for smaller producers, while establishing legal precedents that shape nationwide packaging policy.

Key Takeaways

• ILMA sues Colorado over 56¢/gallon EPR fee.
• Laws threaten margins of small lubricant manufacturers.
• Oregon lawsuit led by NAW may set national precedent.
• EPR fees create costly compliance patchwork across states.
• Industry groups coordinate legal strategy against packaging regulations.

Pulse Analysis

Extended producer responsibility (EPR) programs have become a favored tool for states seeking to fund recycling without raising taxes. Colorado’s recent law, the second of its kind after Oregon, levies a flat 56‑cent fee per gallon on every packaged lubricant sold, regardless of container type. While the intent is to internalize disposal costs, critics argue the blanket fee ignores the varied economics of different product lines and creates a de‑facto barrier for smaller firms lacking the scale to absorb additional expenses.

The lubricant industry’s pushback is coordinated and strategic. ILMA’s lawsuit targets not only the fee amount but also procedural aspects such as the role of the Circular Action Alliance and the opacity surrounding recycling cost disclosures. Parallel litigation in Oregon, spearheaded by NAW, underscores a broader coalition of manufacturers, distributors, and paper‑product groups who view the expansive scope of EPR statutes as a threat to market diversity. For small and mid‑size manufacturers, compliance costs extend beyond the headline fee, encompassing reporting, tracking, and administrative burdens that can erode thin profit margins and deter market entry.

The outcome of these cases could reverberate across the United States. A favorable ruling for the industry may force states to redesign EPR frameworks, possibly shifting toward tiered fees or voluntary programs that consider product volume and recyclability. Conversely, upholding the current statutes could accelerate a nationwide shift toward stricter packaging accountability, prompting businesses to invest in alternative packaging solutions or relocate production to more favorable jurisdictions. Companies should monitor court developments, engage in policy dialogues, and evaluate the financial impact of potential fee structures on their supply chains.