Closed Loop Center for the Circular Economy Launches Comprehensive Framework for Including Compostable Packaging in Extended Producer Responsibility Programs

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The Closed Loop Center responds to composters’ increasing appetite to participate in EPR by providing detailed guidance on how to integrate compostable packaging into EPR programs.

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December 9, 2025, New York, NY – As Extended Producer Responsibility (EPR) programs roll out across seven U.S. states and several more conduct needs assessments, the Closed Loop Center for the Circular Economy, through its Composting Consortium, has released a new report highlighting a major opportunity to strengthen EPR in the U.S.: the inclusion of compostable packaging and composting.  

The framework is published on the heels of recently released findings on the recoverability of compostable packaging. The Composting Consortium’s extensive in-field testing with U.S. composters in 2024 demonstrated high disintegration levels for certified compostable packaging at composting facilities that meet reasonable operational parameters in the U.S., highlighting the role this packaging type plays in diverting food from landfills.

The new report introduces a framework for integrating compostable materials into EPR programs, ensuring composters are incentivized and reimbursed—a critical step toward a truly circular economy. This framework serves as a practical tool for Producer Responsibility Organizations (PROs), regulators and policymakers to incorporate compostable packaging into EPR policies and guide investment strategies that expand U.S. composting infrastructure.

Today, EPR has been positioned as a tailwind for recycling, but compostable packaging—essential for diverting food scraps and reducing greenhouse gas emissions in landfills—is not considered in many EPR programs around the world.

“There’s growing interest in compostable packaging, but more clarity on how to include these materials in EPR programs is critical to advancing circularity for organics,” said Kate Daly, Managing Partner and CEO of the Center for the Circular Economy at Closed Loop Partners. “This framework helps close that gap, creating a clear path forward for producers and composters alike.”  

Given that U.S. food waste composting infrastructure has operational considerations different from those of conventional recycling––including varying operational costs and contamination challenges from non-compostable materials—the Consortium’s analysis shares practical ways to incentivize participation and recover compostable packaging that reflect the true economics of composting. The proposed framework ties reimbursement to the volume of compostable packaging processed at a facility, incentivizing early adopters and driving critical infrastructure growth. Key features of this new EPR reimbursement framework for compostable packaging include:

• Volume-Precision Formula: Rewards composters based on the share of compostable packaging processed in their respective EPR state.

• Eligibility Criteria: Incentivizes facilities to responsibly process certified compostable packaging and produce high-quality finished compost.

• Strategic Fund Allocation: Prioritizes operational reimbursement, infrastructure upgrades, education and waste characterization studies.

“Composters who process compostable packaging want to be part of EPR. As EPR scales in the U.S., it is important that the system is designed with composters and compostable materials in mind,” said Justen Garrity of Veteran Compost (Maryland). “This new framework brings us into the discussion and spells out the benefits for composters who diversify their feedstocks and accept compostable packaging.”

As U.S. policy and regulations related to waste reduction and circularity evolve, the Closed Loop Center will continue its work to help brands and key stakeholders navigate these shifts, alongside its broader work on material innovation, reuse systems and recycling improvement to advance the circular economy.  

Download the full report here.

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About Closed Loop Partners’ Center for the Circular Economy

The Closed Loop Center for the Circular Economy is an innovation firm that helps global brands, retailers and manufacturers solve their most pressing material challenges. Driven by the commercial and environmental imperative to reduce waste, the Closed Loop Center works across four focus areas: material innovation, reuse systems, recycling improvement and policy readiness.  

It is part of Closed Loop Partners, a company that also includes one of the largest privately held recycling companies in the U.S. and a leading global circular economy capital management group.  

Learn more about the Closed Loop Center’s work to advance the transition from a linear, “take, make and waste” economy to a circular economy at www.closedloopcenter.com.

About the Composting Consortium

The Composting Consortium is an initiative of Closed Loop Partners’ Center for the Circular Economy. The Consortium brings together leading voices across the composting and compostable packaging ecosystem––from the world’s leading brands to best-in-class composters running the operations on the ground. Through in-market tests, deep research and industry-wide collaboration, the Consortium lays the groundwork for a more robust, resilient composting system that can keep organics and compostable packaging in circulation. To learn more, please visit closedlooppartners.com/composting-consortium/