Maryland’s latest environmental mandate is no longer just a legislative concept. It is becoming an operating program.

In 2025, Maryland enacted Senate Bill 901, establishing an Extended Producer Responsibility (EPR) framework for packaging and paper products. Governor Wes Moore signed the legislation on May 13, 2025.

Now the Maryland Department of the Environment is moving from legislation to implementation. The first regulations under COMAR 26.04.14 became effective May 25, 2026, establishing definitions, registration requirements, covered materials, reporting obligations, producer requirements and an implementation timetable.

For commercial real estate owners, however, the most important question is not whether recycling is a good idea. It is much more practical: Who is responsible and who ultimately pays?

What Is Extended Producer Responsibility?

EPR shifts some of the cost of managing products after their useful life from local governments and taxpayers to companies that put those products into the marketplace.

Maryland’s program covers packaging and paper products, with the stated objective of improving recycling, reuse and waste reduction. The theory is straightforward: if producers have to pay for end-of-life management, they have an economic incentive to use less material and design packaging that is easier to recycle.

That is the theory.

The practical question is whether those incentives actually produce better environmental outcomes, or simply move costs and create another layer of regulation and administration.

Maryland has designated Circular Action Alliance as the approved Producer Responsibility Organization. Producers can participate through CAA or, subject to MDE approval, establish an individual producer responsibility plan. The regulations impose registration and reporting requirements and provide enforcement mechanisms for noncompliance.

This Is Broader Than “Recycling”

The statutory and regulatory definitions matter.

Covered packaging can include primary, secondary and tertiary packaging intended for the consumer market, service packaging such as carryout bags and takeout food packaging, beverage containers and labels. Covered paper products can extend into residential, industrial, commercial and institutional sectors.

But there are significant exemptions and exclusions.

And this is where commercial real estate owners should pay attention.

A building owner is not automatically a “producer” simply because a building generates cardboard, paper or other recyclable material. The regulatory definition generally follows the manufacturer, brand owner, importer or first distributor responsible for putting covered materials into commerce. De minimis producers, those introducing less than one ton of covered material into Maryland or having global gross revenues below $2 million, are excluded.

A shopping center owner, apartment owner or office landlord therefore should not assume that EPR makes the property owner responsible for every package passing through the property.

But the real estate industry is not entirely outside the program.

Maryland’s definition of a “covered entity” includes multifamily residences and certain commercial, industrial and institutional buildings that source separate paper products for recycling. Covered services include collecting, transferring, transporting, sorting, processing and otherwise managing covered materials for recycling, reuse or composting.

In other words, the building can be part of the system even when the building owner is not the producer.

That distinction matters in leases, operating agreements, property management contracts and waste hauling arrangements.

The Rulebook Is Still Being Written

The May regulations are not the end of the story.

MDE describes them as establishing the framework for implementation, while additional rulemaking remains necessary. Issues still include definitions, covered materials, collection systems, fee structures and potentially “ecomodulation,” adjusting producer fees based on the environmental characteristics of particular materials.

That makes the Packaging and Paper Products Advisory Council worth watching.

MDE has scheduled Advisory Council meetings for September 10, October 8 and December 8, 2026. Stakeholders may have an opportunity to influence how the statutory mandate actually operates.

And seemingly technical definitions such as “Majority Component,” “Service Packaging” and the “Minimum Compostable or Recyclable List” can have very real economic consequences.

What Should Real Estate Owners Do?

For most commercial property owners, this is not a reason to create an EPR compliance department.

It is a reason to understand the allocation of responsibility.

First, identify the producer. For products and packaging associated with the property’s operations, the producer may be a manufacturer, brand owner, distributor or retailer, not the property owner.

Second, review waste and recycling contracts. Who pays for collection? Who owns recyclable materials? Who bears increases in hauling or processing costs? Does the contract provide enough flexibility to accommodate changes in Maryland’s recycling requirements?

Third, review leases. Retailers, restaurants, industrial tenants and multifamily residents can generate substantial volumes of covered packaging and paper products. Lease provisions addressing operating expenses, trash and recycling services should be reviewed before EPR begins generating material costs.

Fourth, watch the fees. The economic consequences of EPR will depend less on the label “producer responsibility” than on how fees are calculated and how those costs ultimately move through the supply chain.

That is the part of the program worth watching!

A Mandate With a Market Test

There is an arguable environmental justification for EPR. Municipalities have historically borne substantial waste management costs while manufacturers and consumers make many of the decisions determining how much packaging enters the waste stream.

There is also a legitimate economic concern: transferring costs does not eliminate them. It changes who pays them.

If EPR produces better packaging, more efficient recycling markets and less material entering landfills, Maryland may lead the way, demonstrating that regulation can change market behavior in productive ways.

But if the program produces layers of reporting, fees and administrative complexity without materially improving recovery rates, Maryland residents will reasonably question the increased dollar costs.

Maryland has made its policy choice. It is different than the past and different from nearly all places in the country, if not the world. It is not clear at all how this will work when most producers are out of the state of Maryland? The market will now test it.

For commercial real estate, the prudent approach is neither to ignore EPR nor to overreact to it.

Know where your property sits in the chain. Know who bears the increasing cost. Monitor and lobby the rulemaking.

The law has been passed. The more interesting part, the implementation, is just beginning.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Exposomics – The New Environmental Challenge And Opportunity You Have Not Heard About,” on Tues, October 13 15 at 9 am. The webinar is complimentary, but you must register here.