Consumer products companies and retailers are redesigning packaging as state regulations in California, Colorado, Maine, Minnesota and Oregon take aim at single-use plastic in the form of fees on brands and retailers.

It’s a big potential liability: 225,000 tons of single-use packaging is used per day for everything from food and beverages to laundry detergent to shampoo, according to estimates by the U.S. Environmental Protection Agency. 

That has inspired dozens of reusable packaging trials such as the citywide test of reusable cups in Petaluma, California; Chilean startup Algramo’s refillable container program; and TerraCycle’s Loop program, discontinued in the U.S. but still available in France and Japan.

Regulations make reusable containers more feasible

“The hottest reason for companies to do this is complying with regulation,” said Carolina Lobel, senior director of the Center for the Circular Economy with investment firm Closed Loop Partners. “They will prioritize where they have to do it because of a mandate.”

The rationale is straightforward: Sustainability teams will find it easier to justify upfront investments when finance teams consider them against the expense of non-compliance.

Moving to reusable containers or packaging also requires investments in manufacturing changes, reverse logistics and container wash systems, among other things, according to an analysis of the reuse model by the Center for the Circular Economy and the U.S. Plastics Pact, a trade group also studying the issue.

Brands and retailers should assess these factors when considering reusable packaging: 

• Environmental benefits, including durability, weight and how many times the packaging can be used before it must be recycled. Dispensing candy in a steel container, for example, doesn’t make as much sense as switching a laundry detergent bottle. 
• Consumer acceptance, including the frequency with which an item is purchased and how the redesign might affect other dynamics, such as product safety.
• Operational alignment, such as whether a category uses standardized formats and how existing back-of-house infrastructure can be used to support it. 

“It makes sense to activate around markets where reuse already happens,” said Anita Schwartz, founder and principal of Circularity Consulting. Many grocery stores, for example, have washing facilities to support preparation for hot food or salad bars. The same goes for the catering operations on corporate campuses, Schwartz said.

Source: DeliverZero

Where reuse makes sense in the near term

With that in mind, the Closed Loop Partners and U.S. Plastics Pact analysis identifies five consumer product categories where reusable packaging is best suited for near-term adoption. All are sold in grocery retailers or convenience stores, which often have active, ongoing relationships with specific customers.

“The first mover should be at the retailer level,” said Schwartz. “You’re going to have frequency of return happening.” 

Prepared foods

Environmental benefits: A reusable salad bowl used at least two times has less of an impact than the single-used edition.

Consumer acceptance: Items are consumed quickly, and purchases in salad bars and delicatessens are frequent.

Operational alignment: Packaged on site — often by consumers at a salad or hot food bar — which reduces logistical overhead; repeat customers are more likely to return containers.

Example: DeliverZero, which offers reusable containers to restaurants, is piloting this model at Whole Foods stores in Denver and throughout Colorado. 

Fresh produce

Environmental benefits: Unclear, although reusable containers that preserve cut vegetables longer than thin-plastic film could help reduce food spoilage and waste.

Consumer acceptance: Vegetables are bought frequently because of their shelf life, making it more likely for consumers to bring back packaging. Reusable packaging could also be important at the distribution level.

Operational alignment: Processes tend to be local and manual, making it simpler to optimize materials without significant adjustments.   

Example: Fresh Del Monte uses reusable plastic containers to transport bananas. 

Beverages (including milk, juice and alcohol)

Environmental benefits: Reusable bottles made of polyethylene terephthalate plastic are heavier than the single-use alternative, so it takes at least two return cycles for them to have a lower impact.

Consumer acceptance: Many consumers are familiar with bottle return schemes and refill models, such as those for local dairies.

Operational alignment: It may be possible to use existing collection points that offer small fees for returning cans or bottles. Existing dairy wash and refill infrastructure offer potential for other beverages, including fresh juice, beverage concentrates or wine.   

Example: Startup Olyns, installing reverse vending machines in California, uses artificial intelligence to sort many types of containers for recycling; they could be used for reusable bottles or cups in the future.

Home care items (especially detergents)

Environmental benefits: Some bottles, such as the ones for laundry detergent, are already reusable. Redesigning for durability would increase weight, but reusing the container at least four times would translate into a 50 percent emissions reduction.

Consumer acceptance: Consumers and businesses are less concerned about safety protocols compared with containers for food and beverage categories.  

Operational alignment: Items such as detergents or spray cleansers come in fairly standard shapes, which is important for scale.

Example: U.K. grocer Ocado uses a durable plastic, refillable container for delivering detergent. 

Personal care products (especially shampoo, lotions and soaps)

Environmental benefits: Items are purchased frequently as containers are emptied, and many are already made of durable glass or plastic.

Consumer acceptance: Perfume or hand soap are often displayed on containers; consumers are more open to attractive designs that are durable and refillable.

Operational alignment: Packages already designed to handle multiple uses; they would fit easily into existing collection and wash systems.

Example: Kiehl’s and Body Shop are two brands that offer refillable bottles for their products.

[Gain insights to move beyond incremental action and accelerate the shift to a circular economy at Circularity, April 29-May 1, Denver, CO.]

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Are some materials fundamentally unsustainable? In the past, most companies working with challenging or hard-to-recycle materials would’ve said yes, believing their material would overcome known obstacles eventually.

Today, the tides are turning. Notable materials like plastic are meeting a “no more chances” attitude from design professionals. As part of the Sustainable Packaging Coalition’s second-annual Trends Report, which launches next month, we’re seeing a clear trend in which the design and sustainable packaging industries are abandoning their past neutrality on materials.  

How certain materials fell out of favor

When companies began to work on sustainability projects in earnest several decades ago, most took a “material agnostic” approach. They focused on the “job” that packaging needed to do and tried to select a material that balanced sustainability with efficiency and cost. This led to a system that prioritized functional, aesthetic, and performance requirements over material sustainability.  

In 2025, this is a decidedly less popular strategy. While fossil-fuel plastic might seem like the only material facing this pushback, take a closer look and you’ll see this trend playing out for certain fibers and bioplastics, too. 

Let’s start with plastic. Public perception paired with U.S. and international packaging policies, global plastic treaty discussions, and innovations in alternative materials have permanently changed the plastics conversation. Although the global plastics treaty stalled and is awaiting future negotiations as of August, last year a coalition of nations took notable positions on plastics. This included members of the EU, South Korea, Canada, Rwanda, Peru, and — fleetingly but meaningfully — the U.S, where the federal government is now advancing markedly pro-plastic policies. These countries pushed for international caps on plastic production and the elimination of certain harmful chemicals used in plastic manufacturing — all decidedly “non-agnostic” positions. 

What about paper? Although we’re seeing a boom in paper-based packaging innovation (in 2024, one trend we saw was the “paperization of everything”), the “tree-free” movement is also noteworthy. A number of smaller brands, often makers of products like toilet paper, paper towels and disposable food serviceware, have started to lean on alternative fibers like bamboo to tell a story about how their products help save trees and prevent deforestation. This messaging plays into certain assumptions — often misconceptions — about the sustainability of alternative fibers, yet it also signals a vocal move away from one material towards others. 

Companies set material-specific goals

Fed up with threats of microplastics, deforestation or the ongoing challenges with recycling, companies are setting material-specific goals and touting their work to moving away from certain materials. Some recent examples include:

• Google’s goal to eliminate plastic packaging for new consumer electronics products by 2025. Last year, the tech behemoth made news by open-sourcing its plastic-free guide and sharing its learnings and products with peer companies. The company is already 99 percent of the way to its goal, and the redesigns have catalyzed other sustainability wins — packaging weight and volume have been reduced by at least 50 percent. 
• Amazon removed 95 percent of its plastic air pillows as part of its multi-year effort to remove plastic delivery packaging from North American fulfillment centers, replacing them with paper filler made from 100 percent recycled content. This amounted to the company’s largest plastic packaging reduction effort in North America and will avoid nearly 15 billion plastic air pillows annually. 
• Japanese multinational pharmaceutical company Takeda set and exceeded a 50 percent sustainable paper packaging goal, asking their suppliers to pursue Forest Stewardship Council (FSC) certification while also exploring how to reduce paper inserts by transitioning to digital product information leaflets. 
• Unilever has shared its efforts to “transition from hard-to-recycle plastics into paper with a compostable barrier” and replace plastics “with an alternative material in the future.” 

Approaching materials with a new mindset

Companies — and people — are approaching materials in a new way, setting boundaries around what kind of materials they want to work or interact with. Every material comes with sustainability and performance trade-offs. Some companies — often inspired by consumer pressure — are now saying, “I prefer a material with these trade-offs, not those.”

This shift is similar to other kinds of environmentally conscious mindset shifts, like people opting to eat less meat in favor of plant-based alternatives. When people choose fake meat, for example, they’re opting into current trade-offs such as synthetic ingredients or higher costs, and opting out of higher carbon footprints or ethical issues with animal products. 

In packaging, this shift is prompting more companies to draw a line in the sand for their portfolio. Instead of attempting to resolve long-standing challenges and never-ending trade-offs for a wide range of materials, companies can lean into a smaller set of issues for a handful of materials they prefer. 

So maybe the future of sustainable packaging boils down to narrowing your focus on material choices that help you determine which sustainability battles are worth fighting for.

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Corporate energy buyers bought 21.7 gigawatts of renewable energy in 2024, an annual record that boosted additions to the U.S. electric grid from such transactions to 100 gigawatts since 2014. That’s according to the Clean Energy Buyers Association’s 2024 Deal Tracker.

For context, 1 gigawatt of electricity can support 750,000 U.S. households for one year. 

Just shy of three percent of all renewable generation on the U.S. grid is attributable to some sort of corporate transaction, according to CEBA. The analysis considers publicly reported deals that are at least 20 megawatts in capacity; at least 235 companies have announced deals since 2014. 

Companies negotiate voluntary power purchase agreements and other sorts of contracts with utilities for clean energy so they can use them to reach renewable energy goals and claim greenhouse gas emissions reductions. This practice has become more popular over the past five years.

Key takeaways from CEBA’s latest analysis:

• The Sun rules: Solar power accounted for the vast majority of the 2024 purchases — 73 percent — despite ongoing permitting and grid interconnection delays.
• Nuclear surprises: Companies procured 1.5 gigawatts from nuclear facilities, about 6.7 percent of total (compared with 7.7 percent for wind). Nuclear energy wasn’t even mentioned in the 2023 Deal Tracker summary. Both Microsoft and Amazon have signed high-profile deals in the past 12 months.
• Batteries bloom: There was a 300 percent increase in capacity during 2024, accounting for 7.7 percent of capacity added.
• Geothermal firsts: Google’s 115-megawatt contract with Fervo in Nevada made the list. It uses a new type of tariff to insulate other customers from the cost of investing in an emerging technology.
• Interest continues to grow: 20 new companies finalized a deal in 2024, fewer than the 28 in 2023 but still notable growth.
• Half the contracted capacity is operational: 54 gigawatts have been switched on.

What’s ahead

While the Trump administration’s policies favor fossil fuels over renewable generation, clean electricity capacity continues to grow rapidly along with overall global energy demand. The world’s energy appetite surged 2.2 percent in 2024, faster than the average demand growth of 1.3 percent between 2013 and 2023.

Low-emissions generation sources covered most of the capacity increases last year, according to the International Energy Agency. Total worldwide capacity is now around 700 gigawatts. Nuclear power capacity reached its fifth highest level in the past five decades, IEA reported.

Tech companies building out massive data centers for artificial intelligence are at the center of this controversial growth. While CEBA’s report doesn’t disclose or discuss specific companies, Amazon was the single-biggest corporate buyer in 2024 — for the fifth year in a row. 

The tech company has invested in 600 projects to date, including ones in states like Louisiana and Mississippi that have proportions of high-emitting fossil fuels as generation sources. In the latter state, projects backed by Amazon account for 24 percent of solar electricity on the grid.

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A new United Nations mechanism for validating high-quality carbon credits has announced its first approval, but carbon experts aren’t celebrating. The inaugural project is seen by many as flawed, and its inclusion highlights a challenge to the mechanism’s integrity goals.

Plans for the Paris Agreement Crediting Mechanism (PACM) were finalized last November at the COP negotiations in Azerbaijan, allowing project developers to begin applying for PACM approval. A quality label backed by the UN could be a welcome addition to the carbon market, where many buyers lack the resources to undertake the due diligence necessary to identify high-quality credits. In some cases, companies have been publicly named as purchasers of “junk” credits that generate little or no climate benefit. 

Following a meeting of the PACM supervisory body last month in Bhutan, we know now the first project to receive the mechanism’s approval: A Myanmar-based scheme that distributes fuel-efficient stoves to communities that cook using wood fires. Switching to improved stoves reduces the quantity of wood the recipients use, reducing deforestation and emissions.

What’s considered sustainable?

The general principle behind cookstove projects is generally considered sound, but the specific project that the PACM approved is not. Calyx Global, an independent rater of carbon credits, last week ranked the project in Tier 3, the lowest of its categories. 

One of the problems with the methodology the project follows is what’s called “non-renewable biomass,” explained Calyx Co-Founder Donna Lee. When estimating climate benefits, project developers must account for wood that will grow back and so should be considered sustainable. Under the methodology used in Myanmar, this estimate was left up to project developers, who had an incentive to downplay the amount of sustainable harvesting in order to maximize the purported impact of the stoves.

The methodology, which was developed by the non-profit Gold Standard, was also rejected this month by the Integrity Council for the Voluntary Carbon Market, another important arbiter of carbon market quality.

This inauspicious start stems from a compromise made as countries haggled over plans for the PACM. China, India and other nations successfully lobbied for credits generated under a previous UN-based scheme, known as the Clean Development Mechanism (CDM), be allowed to apply for PACM approval. The transition window closes at the end of this year, when new and much more stringent rules will be introduced, said Lambert Schneider, a climate policy expert at the Oeko-Institut in Germany and a member of the group crafting the rules. “I’m very confident that such a project wouldn’t pass the new rules,” he added, referring to the Myanmar cookstove credits.

Better baselines

Schneider hopes that the PACM will insist on tough rules governing baselines, for example. To estimate the quality of emissions that a project avoids or remove, developers develop a baseline to compare it to. Many standard-setters allow a “business as usual” approach, in which the impact of the project is compared to the status quo. Schneider is pushing for PACM to insist on a “downward adjustment,” which factors in ongoing changes in the region where the project is based, such as the decarbonization of the grid. He’s also advocating for project developers to be required to apply for credits before they start work, rather than retroactively identifying projects that might qualify for credits.

Yet large quantities of low-quality credits may gain PACM approval before those rules get implemented. More than 1,000 CDM projects have applied for PACM status. Large-scale renewable energy projects dominate the list, according to a 2025 analysis by the NewClimate Institute in Germany. Many of these projects would have been completed without carbon credit funding, meaning they lack what’s known in carbon markets as “additionality.” 

Schneider estimates that low-integrity credits representing hundreds of millions of tons of carbon dioxide could eventually be approved in this way. If they do, he added, buyers should scrutinize the label on PACM credits to determine whether the project was a transfer from the CDM or approved under the new rules.

That kind of due diligence is always worthwhile due to the wide variability in carbon credit quality. Almost all cookstove projects rated by Calyx fall into Tier 2 and 3, for example, but Lee noted that the concept as a whole is not flawed. Indeed, if the problems with the non-renewable biomass estimate were addressed, the majority would shift into Tier 1 and 2. “They can be good projects that have really wonderful sustainable development benefits to women and children and human health,” she said.

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The new draft of the Science Based Targets initiative (SBTi) corporate net zero standard acknowledges the critical role of companies in mobilizing climate finance and proposes a larger role for market-based climate action tools, such as carbon credits, to accelerate progress. But the proposed updates fall short of what’s needed to meet the scale and timeline of the climate emergency. 

Carbon credits appear in two sections of the draft. First, the draft proposes new near-term carbon removal targets for residual emissions, but only for Scope 1. Second, it proposes stronger incentives for companies to mitigate ongoing emissions on the road to net zero, but leaves this mechanism both optional and vague. 

The draft is not final. SBTi has opened a public consultation period through June 1, 2025.

Removal targets now included 

The draft proposes new interim targets for carbon removal to neutralize residual Scope 1 emissions. Residual emissions are those left at the net zero year, after companies implement all possible emission reduction measures. In most cases, they’ll make up 10 percent or less of baseline emissions. 

To achieve net zero status, companies need to purchase and retire carbon removal credits annually beginning in their net zero year, to neutralize their residual emissions. 

The current net zero standard has no requirement that companies begin funding carbon removal prior to their net zero year — typically around mid-century — nor to estimate what their future removal needs will be. The new draft proposes a more proactive approach, introducing both near- and long-term removal targets that would require companies to ramp up carbon removal purchases on the path to net zero.   

Source: Carbon Gap 2023, Who Can Pay for Carbon Removal?

Scope 1 only

But the draft limits removal targets to Scope 1 emissions only. While near-term targets of any kind are a welcome step, as written they will not not make a major difference in scaling carbon removal, according to Robert Höglund, co-founder of CDR.fyi, a carbon removal market data platform, and a member of SBTi’s technical advisory group. 

That’s because large Scope 1 emitters are less likely to set SBTi targets. Indeed, SBTi will not currently validate targets for companies with direct involvement in fossil fuel extraction. Meanwhile, the bulk of emissions from SBTi-participating companies come from Scope 3 sources. 

Interim removal targets for Scope 1 emissions could create demand for up to 2 million carbon removal credits by 2030 from current SBTi participants, according to an analysis from Isometric, a carbon removal registry. Unfortunately, that’s not nearly enough to bring the planet in line with a net zero pathway by mid-century, a goal that will require gigaton-scale removal. 

What’s more, high Scope 1 emitters typically have the least ability to pay for carbon removal, as they have the thinnest profit margins per ton of emissions. Meanwhile, downstream companies with high profit margins per ton of emissions — such as finance, professional services and technology — have much lower Scope 1 emissions but higher Scope 3. These companies have a unique role to play in helping to scale carbon removal.

SBTi’s reason for not including projected residual Scope 2 or 3 emissions in interim targets is twofold: companies will eliminate all energy generation emissions (Scope 2) by their net zero years, and estimating residual Scope 3 emissions is complex, based as it is on value chain action. But leaving Scope 3 out of interim removal targets means the lion’s share of residual emissions from companies participating in SBTi will remain unaddressed. 

Simplify the calculations  

There’s a simple mechanism to solve the complexity problem. Assuming Scope 3 emissions decrease by 90 percent by mid-century, in line with overall emission reductions, that would leave companies with around 10 percent of their baseline Scope 3 emissions to neutralize at their net zero year. Interim near-term removal targets could start there. 

A simplified calculation like this would avoid placing new, burdensome emissions calculations on participating companies while recognizing the reality of the scope of carbon removal needed to hit climate targets. 

How to address ongoing emissions

Companies will continue to release ongoing emissions on the decades-long path to net zero. They differ from residual emissions, which companies can’t eliminate and will need to neutralize via removals. Both have a large climate impact that will compound year over year for decades. 

The current standard encourages companies to undertake beyond value chain mitigation (BVCM) to minimize the impact of their ongoing emissions, but there’s no requirement nor recognition for doing so. 

Beyond Value Chain Mitigation (BVCM)

Source: SBTi 2024, “Above and Beyond on BVCM”

SBTi’s stated reason for not requiring mitigation of ongoing emissions is that it is aiming to “remain inclusive for companies with varying resources.” This is a surprising explanation. SBTi has never, to my knowledge, mentioned inclusivity as one of its guiding principles. Its publicly stated purpose is to define best practices for science-aligned climate action consistent with limiting warming to 1.5℃ — with no mention of cost. 

The draft says the initiative is seeking new ways to incentivize companies to address ongoing emissions. But this section is among the most vague in the document. Exactly what form this additional recognition will take for companies that choose to mitigate ongoing emissions isn’t defined. 

Similarly, the method by which companies can address their ongoing emissions is also left undefined, but will likely follow one of the options described by SBTi in its report on this topic last year. They are a money-for-ton (or ton-for-ton) approach and using carbon credits to funnel investment into projects that accelerate global climate progress.  

A framework that unleashes climate finance

SBTi is clearly listening. Adding interim carbon removal targets and strengthening recommendations around mitigating ongoing emissions are signs the body is heeding the steady drumbeat of requests from the climate community to open up all mechanisms for global climate action. 

But the draft, as written, hamstrings itself. Including Scope 3 in interim carbon removal targets, and requiring action on ongoing emissions, would transform SBTi’s net zero standard into a mechanism that could unleash one of the most powerful untapped tools for climate action: private finance. 

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