New, stricter regulations on the use of certain chemicals in the packaging industry are emerging rapidly: restrictions on bisphenol A (BPA) in the European Union and perfluoroalkyl and polyfluoroalkyl substances (PFAS) in the United States being two of the most notable. With the recent release of the European Commission’s 2030 “Restrictions roadmap under the chemicals strategy for sustainability,” and state-wide petitioning for federal bans on other chemicals of concern (such as phthalates) ongoing in the United States, further regulation is looming on the horizon. Chemical-substance regulations pose significant operational challenges for industry players: uncertainty around the detail of the regulatory changes and implementation timelines can hinder an organization’s agility to address these challenges—as can limited experience within the industry on the specific chemical substances. Industry leaders are well advised to develop a proactive approach that emphasizes cross-functional collaboration underpinned by a well-developed master plan in order to confidently navigate this uncertain landscape.
Beyond environmental-packaging regulations
This article is a collaborative effort by Martijn De Meyer, David Feber, Felix Grünewald, Oskar Lingqvist, Daniel Nordigaarden, and Emily Roeper, representing views from McKinsey’s Paper, Forest Products & Packaging Practice.
Of late, the packaging industry has experienced a flood of environmental regulations targeting the impact of packaging leakage. However, this is not the only agenda item for regulators: a new wave of regulations is on the horizon, which will likely usher in stricter rules around the chemical substances used in packaging. To understand more about potential upcoming changes, we have analyzed the evolving regulatory environment in the context of three chemicals: BPA, PFAS, and phthalates—all of which impact different substrates in the packaging industry. With the regulatory scope and adoption timelines still unclear, and the expected impact of such regulations rapidly evolving, packaging companies will soon be facing several logistical challenges across their operations, if they are not doing so already. In this article, we explore the upcoming changes in chemical-substance regulations, draw implications for players across all packaging substrates, and suggest a framework for industry leaders to proactively manage the uncertainty.
Significant regulatory changes on the horizon for various chemicals used in packaging
On the immediate horizon are new regulations on the usage of BPA in the European Union and the phase-out of PFAS in the United States. Moreover, there is potential for additional regulation—for instance, on phthalates—just around the corner.
BPA: New regulation expected during the second half of 2022
BPA is mainly used in combination with other chemicals to manufacture plastics and resins: notably, the transparent plastic used to make food containers, reusable beverage bottles, tableware, and storage containers can contain BPA. The chemical is also used to produce epoxy resins, which are typically employed in the packaging industry to form protective coatings and liners for metal food and beverage containers. 1 1. “Bisphenol A,” European Food Safety Authority (EFSA).
Regulations for BPA use in packaging across the world (illustrative, not exhaustive)
Worldwide regulation for the use of bisphenol A (BPA) in packaging and food-contact products is increasing.
2010: BPA is added to list of “chemicals of concern” by US Environmental Protection Agency.
2016: In California, BPA is added to Proposition 65 list, requiring businesses to provide warnings on products with significant BPA exposure risk.
2020: As of 2020, 14 US states have restricted the use of BPA, mostly in food-contact materials for children under three years old.
European Food Safety Authority (EFSA)
2015: New data uncovered by EFSA’s comprehensive reevaluation of BPA leads agency to considerably reduce BPA limit.
2021–22: A draft proposal is introduced to reduce BPA limit further by 100,000 times (2021). Public consultation period ended in February 2022. Regulation is expected by the industry during the third or fourth quarter of 2022.
European Chemicals Agency
2017: BPA is added to Registration, Evaluation, Authorization, and Restriction of Chemicals list of “substances of very high concern.”
2013: BPA is banned from all baby-food containers.
2015: BPA is banned from all food-contact materials.
2011: BPA is banned in specific cases, for example, in baby bottles and food-contact materials for children under three years old.
2016: Epoxy linings containing BPA are banned from use in drinking-water pipes.
Late 1990s: Japanese canning industry sets migration limits of ten parts per billion (food cans) and five parts per billion (drink cans).
Regulation around BPA is not new, but globally, regulation around the use of BPA in packaging and food-contact products has increased in recent years (see sidebar “Regulations for BPA use in packaging across the world (illustrative, not exhaustive)”). Despite a lack of regulatory infrastructure around BPA in the United States beyond specific children’s products, widespread consumer and institutional pressure has already led many companies to ban BPA from their packaging products. In the European Union, regulation of BPA has been slower. Sweden, however, banned the use of BPA for baby bottles and food-contact materials for children under three years old during 2011–16, while France prohibited it from being used in baby-food containers in 2013 and from all “food-contact materials” in 2015.
With rising concern around the health risks of significant exposure to BPA, the European Union is now accelerating regulation. In December 2021, the European Food Safety Authority (EFSA) published a revised risk assessment of BPA and then, in January 2022, a draft scientific opinion which reevaluates the tolerable daily intake (TDI) of BPA. The reevaluation proposes a significant reduction in TDI that is some 100,000 times lower than the amount previously stated by EFSA in 2015. 2 2. “Bisphenol A: EFSA draft opinion proposes lowering the tolerable daily intake,” EFSA, December 15, 2021. With public consultation on the opinion closed in February 2022, the final regulatory verdict and adoption is expected by December 2022. 3 3. “Stakeholder meeting on the draft scientific opinion on re-evaluation of bisphenol A (BPA),” EFSA, January 24, 2022. If approved, this new regulation essentially means that BPA used in all food-contact products would need to be replaced by BPA-free alternatives across all EU member countries.
PFAS: Phase out of usage in the United States by the end of 2022, and in the European Union by 2030
PFAS are a group of chemicals used to make fluoropolymer coatings that can be heat-, oil-, grease-, and water-resistant. Within packaging, PFAS are typically used to treat paper products that serve and package greasy food, such as bakery bags and fast-food sandwich wrappers. Nicknamed the “forever chemicals,” PFAS do not break down in the environment and can migrate into food or water sources. 4 4. “Per- and polyfluorinated substances (PFAS) factsheet,” Centers for Disease Control and Prevention (CDC), reviewed May 2, 2022.
Notable regulations in the United States regarding the use of PFAS in packaging date back to 2016, when the Food and Drug Administration (FDA) eliminated two long-chain perfluorinated compounds from use in food packaging. 5 5. “FDA removes approval for the use of PFCs in food packaging based on the abandonment,” US Food and Drug Administration (FDA), November 21, 2016. In 2018, the state of Washington implemented the first ban on the “intentional addition” of PFAS in food packaging in cases where safer alternatives to PFAS were available. 6 6. Beth Kemler, “Washington becomes first state to ban non-stick chemicals in food packaging,” Safer Chemicals, Healthy Families, March 21, 2018. However, it was not until February 2021 that Washington’s Department of Ecology published its report identifying safer alternatives. 7 7. Safer alternatives to PFAS in food packaging: Report to the Legislature pursuant to RCW 70A.222.070, Washington State Department of Ecology, February 2021.
Following recent availability of safer options, US regulations regarding the use of PFAS in packaging has expanded rapidly, with an increasing number of regulatory bodies implementing bans on all PFAS. As of January 2022, seven states (California, Connecticut, Maine, Minnesota, New York, Vermont, and Washington) have restricted PFAS in food packaging containers and materials—most notably, the law in New York State will be the first to take effect in December 2022. 8 8. Thomas Lee et al., “PFAS update: State regulation of PFAS in food packaging,” Bryan Cave Leighton Paisner LLP, December 21, 2021. Ten additional states have also proposed legislation banning the intentional addition of PFAS in food packaging.
In Europe, the European Commission recently launched its Restrictions Roadmap, which outlines a plan for outlawing many broad groups of harmful chemicals, including PFAS, from use in packaging by 2030. 9 9. “Restrictions roadmap under the chemicals strategy for sustainability,” European Commission, Commission staff working document, April 25, 2022. As part of this road map, the governments of Denmark, Germany, the Netherlands, Norway, and Sweden will formally propose a restriction on PFAS within the European Union to the European Chemicals Agency (ECHA), to be reviewed in 2023. 10 10. “Registry of restriction intentions until outcome,” European Chemicals Agency (ECHA), updated July 14, 2022.
Phthalates: On the horizon?
Phthalates, often called plasticizers, are chemicals used to make plastics such as polyvinyl chloride (PVC) more durable. 11 11. “Phthalates factsheet,” CDC, last reviewed April 5, 2021. They can be used in food packaging—for instance, in the lining of the lid of a jar or bottle cap—as well as in food-processing materials. In the United States, phthalates regulation has historically been limited to its use in toys and other childcare products; its use in food packaging and other food-contact products has not been a focus until recently. However, in December 2021, Maine announced a new law prohibiting the use of all phthalates in food and beverage packaging within the state. 12 12. “Maine toxics in food packaging program,” Maine Department of Environmental Protection. Enforced by the Department of Environmental Protection, this law is one of the first in the United States that would ban all phthalates in food and beverage packaging. However, while the enactment date was set for January 1, 2022, 13 13. Melanie Loyzim, “Notice of enforcement discretion regarding Maine’s prohibition on the use of phthalates in food packaging,” State of Maine Department of Environmental Protection, December 10, 2021. enforcement of the law has since been delayed until June 2022. Importantly, though, this law has gained the attention of other concerned parties, which are now calling on the FDA to frame wider, more impactful regulations to ban phthalates in food packaging and processing materials in the near future.
Impact is broad and scalable across substrates and players
A timeline of elimination of BPA, PFAS, and phthalates from company portfolios
Over the past two years, many large brands have eliminated or committed to eliminating bisphenol A (BPA), perfluoroalkyl and polyfluoroalkyl substances (PFAS), and phthalates from their portfolios, which will impact their packaging suppliers at scale.
A global fast-food chain announces that it will remove PFAS, phthalates, and BPA from all “consumer-facing packaging materials” by 2025.
A leading fast-casual restaurant announces it will phase PFAS out of its molded-fiber burrito bowls by the end of 2021, and further, from its molded-fiber kids’ trays by the end of 2021.
A large e-retailer publishes a restricted substance list, which bans BPA, PFAS, and phthalates from being used in its kitchen-brand products.
After removing BPA and phthalates from all guest packaging in 2013 and 2015, respectively, a fast-food company announced its goal to eliminate all added PFAS from guest packaging globally by 2025.
A large supermarket adopts a restricted substance list for “all food service and exclusive brand packaging” that prohibits intentionally added PFAs, phthalates, and BPA.
A large food retailer commits to removing PFAS from all own-brand paper and board food packaging by the end of 2021.
A large fast-food chain announces that it will eliminate PFAS in consumer-facing packaging in the United States and Canada by the end of 2021.
A large fast-food restaurant announces a global ban of all PFAS from its guest-facing packaging materials by 2025 or sooner.
A large beverage chain announces it will eliminate PFAS from all packaging in the United States by the end of 2022 and globally in 2023.
Chemical coatings are used in conjunction with almost every packaging substrate: BPA with rigid plastic containers and metal cans, PFAS with flexible paper, and phthalates with soft plastics. Consequently, participants across the packaging value chain, from raw-materials producers to converters and end users, are affected by chemical-substance regulations. Several packaging end users have taken swift action to phase out, or commit to phasing out, BPA, PFAS, and phthalates, as well as other chemicals from their packaging. For example, over the past two years, many well-known retailers have implemented global chemical bans across their packaging portfolios—moves that will have a major impact on their packaging suppliers (see sidebar “A timeline of elimination of BPA, PFAS, and phthalates from company portfolios”).
Managing uncertainty from upcoming regulatory changes
While new regulations are being drafted and implemented, there can be considerable uncertainty about their precise ramifications, with clarity needed around three main questions:
This uncertainty, combined with sometimes limited experience within the industry around substitution of specific chemicals, can hinder adoption speed. By analyzing the regulatory responses of packaging companies, we have been able to explore different approaches to managing this uncertainty. One option is to be reactive: that is, await regulatory guidance to assess the full scope and requirements set out by the regulatory authorities. However, this approach also comes with elevated risk, with organizations operating in an ambiguous environment as they await or respond to regulatory guidance. Tight deadlines for qualification of new materials or hesitancy to make portfolio substitutions could lead to loss of customers that have already implemented their own phase-outs or the advancement of rival suppliers that have been quicker to market with substance alternatives, as well as the risk of not complying with regulations if substitutions prove challenging.
Instead, we suggest that industry leaders take a more proactive approach to develop a pre-regulatory viewpoint that determines how to start substituting chemicals linked to upcoming regulation. This could be done in two ways:
To get started on this journey, packaging players are well advised to rapidly implement a master plan that includes the following building blocks as a minimum:
Given that substituting substances touches upon multiple functions within the organization, developing a master plan will require a cross-functional team to develop and coordinate it. As part of this activity, it will be critical to implement clear performance-management parameters (such as KPIs and milestones) because tracking will be key.
Any regulatory changes will have very significant implications for a packaging company’s product portfolio. Taking a reactive “wait and see” approach can put large volumes at risk. Conversely, being proactive by developing an early position and taking action based on a clear master plan and cross-functional collaboration can help packaging players navigate the complexities of the evolving regulatory landscape.
This content was originally published here.