Trump’s tariffs endanger California-Mexico clean energy deal

California Gov. Gavin Newsom thought he’d delivered a clean technology manufacturing boon to his state with a new four-year memorandum of understanding (MOU) with Alfonso Durazo Montaño, governor of Sonora, Mexico.

Then President Donald Trump announced rounds of tariffs.

To say the story is still developing is an understatement, but how it does will matter a great deal to a great many people and businesses on both sides of the border.

Here’s what we know so far.

That was then

Signed March 18, the agreement is an attempt to provide supply chain and clean energy stability for California, Mexico and their private sectors. It contains provisions that encourage collaboration on:

  • Renewable energy efficiency
  • Electric system reliability and markets
  • Electric mobility
  • Clean and renewable hydrogen
  • Supply chain development, and
  • Supporting research and development.

“The memorandum shows potential exists,” said Richard Kiy, president and CEO of Institute of the Americas. “Sonora’s goal is to be able to finance up to 4 gigawatts of renewable energy production.” Portions of those 4 gigawatts would be sent to California in an effort to shore up its electrical grid, which is more vulnerable than ever. (Mexico announced the construction of an electrical transmission line between Sonora and the Baja California Peninsula in July.)

The San Diego Chamber of Commerce described the agreement as a “collaboration to promote the energy sector and increase business and economic ties to facilitate a transition towards clean energy.”

But memoranda aren’t treaties, and thus not binding. More to the point, they are vulnerable to contravening action at the federal level. Which brings us to:

Almost two weeks after the signing of the memorandum, Trump imposed 25 percent tariffs on all imported automobiles and auto components, which is taking effect at midnight Thursday. This action follows the implementation of separate 25 percent tariffs on all steel and aluminum (including auto parts) imported to the U.S., regardless of country of origin. Further complicating matters: a 25 percent tariff on all imports from Mexico.

So, in theory, an imported auto part with steel components could potentially rack up 75 percent tariffs if coming into the U.S. from Mexico, from where California imported $14.7 billion in transportation equipment in 2023. (Sonora, for example, is home to a pair of Ford manufacturing facilities.)

But “in theory” is the operative phrase.

This is now (maybe)

This level of tariffs is unprecedented, leaving industry experts scrambling to understand the new business-as-usual.

Trade experts aren’t at all sure whether tariffs can or would be stacked. But if they are, what was once sound economic strategy for Ford — importing cars from Mexican facilities — suddenly becomes a financial problem.

More important, businesses of all sizes rely on regulatory consistency to make informed decisions today and to plan for tomorrow. And while Ford, ultimately, has the resources to navigate these uncertainties, most companies do not. Such firms should not prioritize the MOU, according to Kathleen Claussen, a professor of international economic and trade law at Georgetown University Law School.

“A company with limited resources should be focused on what’s happening at the federal level,” said Claussen. “Everyone should be focused on the White House.”

In other words, a once promising MOU may turn out to be DOA.

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3 ways Europe’s sustainability reset will affect corporate planning and policy

As the Trump Administration initiates a massive offensive against public health and environmental precedents and priorities, Europe is also undergoing a sustainability reset. Though not as radical as the U.S. version, it too has major implications for business planning, government policy and stakeholder priorities.

Three questions are paramount: What’s driving the reset in Europe? What changes are likely to emerge? And how should businesses adapt?

Greater representation of conservative and fascist parties in individual national legislatures and the European Parliament are playing a large factor, as noted in a Trellis piece last month. Beyond politics, though, is the fact that many sustainability proposals aren’t well understood by the public or have catalyzed significant opposition from business. These include an alphabet soup of newer reporting initiatives, climate-related tax adjustments, or regulatory requirements intended to decarbonize European economies in future decades.

At the same time, a number of bedrock European industries—auto manufacturing, chemicals, Germany’s Mittelstand-sized companies—face higher business costs from regulatory compliance, changing consumer demands, trade competition (electric vehicle exports from China, for example) and new technologies such as artificial intelligence (a sector where European business has no major global assets).

Of course, the Trump administration’s attempts to pull back environmental policy commitments and investments has also slowed down important momentum across sustainability policies important to Europe. 

Three likely changes

Given these factors, what does the European sustainability reset actually look like? It’s important to note that revised sustainability requirements will not fall equally upon private businesses. As of now, three major changes seem likely:

  • Significant reduction in the number of companies required to report their negative impacts upon the environment and society under the Corporate Sustainability Reporting Directive (CSRD). This outcome reflects exemptions for small and medium-sized enterprises and increased minimums in enterprise revenue and number of employees that, together, could reduce the number of reporting firms by 80%.
  • Scaled-back due diligence requirements to calculate human and environmental risk for all direct value chain participants through the Corporate Sustainability Due Diligence Directive (CSDDD).  
  • Major revisions in the Carbon Border Adjustment Mechanism (CBAM) that will avoid added costs for material shipments between customers and suppliers across European borders.

These and other proposals will be voted upon later this year through the Omnibus Simplification Package. Untouched in this evolving compromise is the provision for enterprises to conduct double materiality assessments of their financial and environmental impacts. In early March, the EU reaffirmed its commitment to require zero emission automobiles by 2035. This, too, will likely be the subject of a future debate as the newly-elected German government formalizes its agenda. Arrayed against these salient business drivers, the sustainability reset will likely evolve in multiple phases across several decades.

The path forward

Given the multiple phases of rollouts, larger companies with operations in Europe will need to remain prepared to submit currently-required reports even if they become less voluminous.

More specific business responses could consist of the following:

  • Reassessing staffing and budgeting requirements for current and revised reporting mandates. This becomes especially important as the EU and individual European governments and many American states will choose differentiated, yet overlapping reporting frameworks. 
  • Preparing for expected deadlines even if they are delayed through the Omnibus process. Executives of several Fortune 100 companies told me they plan to continue their present planning expectations in Europe and maintain the stability and efficiencies of a globally-integrated approach across their businesses.
  • Following through on announced commitments. This includes Scope 1, 2 and 3 climate reporting, stakeholder collaborations and European DEI programs (whether called by that name or using other terminology).
  • Continuing to work closely with suppliers to navigate changing tax, environmental reporting and other disclosure requirements as well as advancing progress in the sustainability of supplier operations.
  • Deciding whether to move forward on business strategy decisions and investments including renewables, electrifying facilities and zero-emission vehicles.

Enterprises have no choice but to manage multiple uncertainties today.  An insightful perspective for navigating the currently rough waters is provided by my U.K. colleague Mike Barry, a former Marks & Spencer senior executive, who noted: “Companies always overestimate short-term risk and underestimate long-term change. Mistakenly seeing risk through the lens of one-off events and not as a ‘system’ of overlapping interconnected events.”  

Sustainability professionals must stay mindful of an essential role—to strengthen businesses’ ability to improve current living standards while delivering sustainability benefits for the present and future through democratic political systems—regardless of the reset in Europe. 

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For Google, Intuit, REI and others, size isn’t everything in clean energy deals

Google, Intuit, Microsoft, Patagonia, Rivian and REI are among a growing number of companies for which the capacity of a renewable electricity project isn’t the most important decision-making metric for signing a contract.

All six companies are negotiating deals aimed at bringing affordable energy to places where renewable electricity is scarce and other factors, including high poverty levels, have made it difficult for consumers to invest in energy efficiency measures such as home weatherization or updated HVAC systems.

For example, Microsoft disclosed a multi-year deal Feb. 25 to bring 100 megawatts of solar electricity to 20 communities over the next four years with an initial focus on Louisiana and Arkansas. This is the tech giant’s second transaction with Clearloop, a Nashville, Tennessee, company expanding solar power in underserved locations where projects have a higher impact on grid decarbonization and also provide a positive economic impact.

Clearloop uses a project financing approach that lets corporations purchase the environmental attribute certificates of utility-connected projects in regions where renewables penetration is low, said Clearloop Co-founder and CEO Laura Zapata. 

“If the government is not going to make these types of investments, maybe the private sector will,” she said, describing the company’s origin story. One of Clearloop’s co-founders and angel investors is former Tennessee governor Phil Bredesen, who also co-founded Silicon Ranch, the solar developer that acquired Clearloop in October 2021.

Central theme: community resilience 

Clearloop prioritizes smaller projects — typically about 5 megawatts, or enough to power 1,000 homes. A key selling point in rural communities is the ability of distributed solar systems to keep communities online during broader grid outages, Zapata said. That helps get projects approved and typically producing power in under one year. “Deploy, deploy, deploy is the name of the game right now,” she said.

Another developer winning deals with high-profile corporations is Sol Systems, an independent power producer in Washington, D.C., that manages 7 gigawatts of clean energy projects in 38 states. It has publicly disclosed deals with Google, Microsoft, Patagonia and Rivian, to name a few. 

Both Clearloop and Sol prioritize low-income communities with high irradiance. Investments often come with employment opportunities, investments in local schools and other activities deemed important by local residents. 

“You can still use these projects to implement your goals, but it’s not just about simply extracting the benefits,” said Adaora Ifebigh, senior director of community impact at Sol Systems. “If you want to be there and show that you’re going to be there, you need to think about things differently.”

Consider Sol’s relationship with Google, which in mid-March pledged another $1.6 million (doubling a previous investment). That money funds grants at rural electric cooperatives in North Carolina and South Carolina for energy efficiency upgrades and other improvements that reduce energy demand and costs.

Solar panels under a blue sky with clouds.
The White Pines solar project in Tennessee was funded with investments from Intuit and REI Cooperative.
Source: Clearloop

Demonstrable impact for low-income consumers

“[The relationship] directly reduces the energy burden on our members — particularly during extreme weather months — without the red tape that often comes with other funding sources,” said Kevin Myers, manager of marketing for the Santee Electric Cooperative in Kingstree, South Carolina. “It’s not about policy; it’s about people.”

Santee is one of several organizations that receives funding enabled by the Google deal. The co-op, which will receive $200,000 as a result of the new investment, has funded upgrades at 76 homes over the past two years, including weatherization improvements and installations of heat pumps.

The owners of these homes often don’t qualify for existing programs because they don’t have an adequate credit history or they rent the land where their home is situated — which is a deal-breaker in some locations, Myers said. “These funds can be applied directly to the [customers] who need this the absolute most,” he said.

Consider climate, conservation and community

Electric vehicle maker Rivian reviews community development possibilities as part of all its renewable energy investments. Other factors: how a project can reduce emissions on an otherwise dirty grid and whether the project will cause habitat destruction. (Check out its checklist.)

For example, Rivian teamed up with Patagonia and Sol to back a 50-megawatt project in Stokes County, North Carolina. The funding supported a local robotics program for middle-school students.

Rivian’s renewables strategy aims to offset the impact of its manufacturing and add enough clean energy capacity to the grid to support 7 billion miles of carbon-free driving. 

“We are looking for projects that will result in the greatest potential to negate fossil fuels,” said Andrew Peterman, director of advanced energy solutions at Rivian. “We really think about how we drive grid transformation that is about more than decarbonization.”

For example, Rivian backed Clearloop’s work in Tennessee because solar generation accounts for less than 1 percent of the electricity there. Rivian is working with Clearloop to add enough solar power to serve charging stations across the state, Peterman said. “There are sustainability outcomes, but it’s really about enabling the system,” he said.

Let the community lead

Software firm Intuit also collaborates with Clearloop. Together with REI, it backed a 2.8-megawatt solar installation in White Pine, Tennessee, that will power at least 400 local households and also provide zero-carbon electricity for REI’s nearby distribution center.

“We have never put a limit on projects like this, but it does come down to scope — not only just the clean energy component but also whether it creates co-benefits,” said Debbie Lizt, head of global sustainability at Intuit. “We want to use the resources that we have to have a positive impact.”

Intuit studies economic impact potential as part of its project selection criteria — in accord with its corporate mission statement to “power prosperity around the world.” It prioritizes regions where electricity additions can reduce utility costs, provide exposure to new technologies and potentially create apprenticeship opportunities. 

Unlike some other companies supporting small community solar projects, Intuit doesn’t count the renewable energy certificates they generate towards its emissions reduction goals. Rather, it donates them to the community. “This is important work to do even if it doesn’t serve our direct interests,” Lizt said.

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Mizuho and Sumitomo boost market for carbon removals

Advocates for carbon removal have long warned of a problem: Because a handful of buyers are responsible for the large majority of purchases, the supply side of the market is not growing fast enough to provide the gigatons of removals the Intergovernmental Panel on Climate Change says will be needed by mid-century.

But now comes tentative evidence that major Japanese companies may help fill that gap.

Mizuho, a Japanese bank with $2 trillion in assets, announced this week it will join NextGen CDR, a company that connects large buyers with carbon removal projects. And a partner working with another major Japanese business, the industrial conglomerate Sumitomo, recently told Trellis that the company intends to purchase 500,000 high-durability credits annually — a significant buy for the nascent removals market.

Prioritizing durability

NextGen is a joint project between climate consultancy South Pole and Mitsubishi, another Japanese conglomerate. The company connects buyers with removal technologies that guarantee to store carbon for at least 1,000 years. These include biochar, direct air capture and storage of carbon from sustainably sourced biomass. NextGen targets an average price of $200 per ton, a relatively low figure in a market where credits can run to $1,000 per ton, and counts Boston Consulting Group, Swiss Re and UBS as founding buyers. Mizuho is the first new buyer to join since NextGen’s launch in 2022.

“It’s very exciting for us — and also reassuring,” said Patrick Bürgi, NextGen’s chairperson and a co-founder of South Pole, referencing recent setbacks in corporate action on climate, including the decision by some large companies to water down emission targets. Bürgi did not disclose the amount Mizuho will spend or the quantity of credits the company will acquire. Data from CDR.fyi, a firm that tracks removal purchases, shows that NextGen has purchased 212,000 credits to date.

In Sumitomo’s case, the purchases are being handled by Carbon Direct, a carbon management firm. An annual purchase of half a million tons would mark the arrival of a significant new entrant into the removals market. The leaderboard of cumulative sales compiled by CDR.fyi is topped by Microsoft (8.2 million tons), a buyers’ coalition known as Frontier (1.1 million) and Google (0.5 million). If its plans are executed, a single year of purchases would put Sumitomo in fourth place.

Demand surge

Micah Macfarlane, chief supply officer at Carbon Direct, noted that as well as seeking to offset its own emissions, Sumitomo is also interested in selling removal credits to other companies. The Japanese government is establishing a trading scheme as part of its Green Transformation (GX) initiative, a decade-long effort to decarbonize the country’s economy. Participation in the GX-ETS will transition from voluntary to mandatory next year and the roughly 750 companies covered by the scheme are responsible for more than a half of Japan’s emissions, according to an analysis by CDR.fyi. Companies in the scheme are allowed to use credits to offset up to 5 percent of annual emissions, which could generate demand for around 40 million tons of credits annually, CDR.fyi estimated.

That level of demand would outstrip current supply of removals, but Bürgi questioned the likelihood of the trading scheme alone making it happen. He pointed out that participants in the GX-ETS will only use removals to offset emissions if those credits are cheaper than mitigation efforts, which, given the price of high-durability removals, may not be the case. Even when it’s cheaper to offset than mitigate, added Bürgi, avoided-emission credits from forest protection and other projects will likely prove more cost-effective. 

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How Meta’s latest forest credits purchase gets it closer to net zero

The tech giant Meta, owner of Facebook and WhatsApp, has purchased 676,000 carbon credits as part of a project that will transform the management of 68,000 acres of previously commercial forest on Washington state’s Olympic Peninsula. The deal is the first time EFM, the forest investment company that acquired the land, has used credit sales to help fund a forest purchase. 

It also represents a significant uptick in credit use by Meta, which will receive the credits over a 10-year period. The company has retired an average 65,000 credits annually since 2021, according to Allied Offsets, a provider of carbon market data. Combined with a purchase in September of up to 2.9 million forest credits through 2038 from the forestry arm of Brazilian investment bank BTG Pactual, the company has contracts in place to allow it to retire more than 200,000 credits every year for the next decade from those two projects alone.

In addition to offsetting emissions as part of its strategy to reach net zero by 2030, Meta said it chose the project because of the broader benefits it will bring to carbon markets. “EFM’s landscape-scale conservation efforts will not only sequester carbon to help us achieve our net zero target,” said Tracy Johns, carbon removal program lead at Meta. “It will also provide lasting outcomes for the ecosystem, local economy, and Hoh, Quileute, and other communities who rely on this healthy and responsibly managed forestland.” The company declined to disclose the cost of its purchase.

No more clear-cutting

EFM’s newly acquired forest is a coastal strip of land that was owned by the forest products company Rayonier for around 80 years. In keeping with conventional management of commercial forests, the company clear-cut the land every 35 years or so and replanted with Douglas fir, western hemlock and Sitka spruce. “It would look more like a plantation,” said Bettina von Hagen, EFM’s CEO.

Thanks to the purchase, which cost EFM more than $200 million, the land will now be managed with more holistic goals, including enhancing biodiversity and storing additional carbon. That means adding western red cedar, a culturally and ecologically significant species that grows slowly and is often excluded from commercial forests; bigleaf maple, which provides food for invertebrates and thus, indirectly, salmon; and multiple understory species.

Harvesting will continue, however. Von Hagen said EFM will apply two methods that balance extraction with long-term sustainability. In a thinning operation, loggers cut around 30 percent of trees and leave what remains. Variable retention harvesting involves removing a much larger fraction — between 70 and 90 percent — while leaving enough trees to protect the soil and provide habitat for animals. The practices will allow the forest to continue to support the local timber industry even as the carbon stored on the land is increased. EFM estimates that 10 million tons of carbon dioxide is currently stored on the land and that the new management practices will increase that by 1 million tons. 

Investors want predictability

The deal that secured the forest was put together at extremely short notice: Von Hagen said data on the forest was made available just nine weeks before binding bids were due. “Until now, we have not been able to assemble the capital for large acquisitions in the short time frames that are usually provided, and have not been able to compete with buyers which were only underwriting the timber, which is a known commodity with predictable prices with which institutional investors are very familiar,” she explained. “Having a contract with a great counterparty like Meta allowed our investors to underwrite the transaction with a predictable set of carbon and timber prices, and that made all the difference.”

Schemes projects that combine commercial activities with carbon storage — which fall into a category of projects known as improved forest management (IFM) — have previously come in for criticism. To estimate the carbon stored by a project, developers forecast the harvesting that would have taken place in the absence of IFM practices. Researchers have warned that the methodologies governing IFM projects allow developers to overestimate baseline harvesting and generate unearned credits. The methodology that will be used by EFM was developed by ACR, a carbon credits standard-setter formerly known as the American Carbon Registry, and was updated in September, in part to improve the precision of baseline measurements.

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Looking for a job? Find your community first

Joe had always shown up for our local meetup of sustainability professionals. He volunteered for panels, served on committees and never missed a gathering. One night after a networking event, we were chatting as we stacked chairs and he said, “Man, I really needed this tonight. It’s been so hard since I got laid off.” I was shocked — wasn’t a job search something he should’ve mentioned during the networking hour? 

He didn’t see it that way. He had shown up that evening to spend time with friends, and he didn’t want them to think that he was using them to get a job. I gently reminded him that we would all be thrilled to help him, and with his permission I spread the word that he was looking. Dozens of people reached out with leads, introductions and referrals, and within two months he started a new job working with one of our members.  

As a job search coach, I hear stories like this every day. In the age of online applications and AI-generated cover letters, some job seekers can go weeks without talking to an actual person. We’re all so busy and distracted that many of us have forgotten what our communities can do for us. People such as Joe are so focused on the joy of belonging that they don’t tap into the group’s collective knowledge and extended network. Others are so out of practice with connection that they don’t think to reach out to their communities when they’re job searching and miss out on both emotional support and professional opportunities.

One study found that loneliness can be a significant contributing factor to unemployment, so your job search can get a boost from the mental and physical benefits of joining virtually any community; however, professionally focused ones can take you even further. They allow you to benefit from the knowledge and experience of the collective group to help you build your skills, improve your job search approach, discover opportunities and secure referrals. 

Getting started

Here’s how you can do your part to be an active, engaged member in a community:

  • Sign up for the newsletter and actually read it
  • Show up to online forums, webinars and in-person events 
  • Say yes to requests for volunteers, outreach support or donations
  • Share your knowledge, your time and your stories. Mentor someone, contribute to discussions and participate on panels
  • Support community leaders because many communities are run by volunteers with shoestring budgets

Whether your goal is to boost your job search or improve your mental health, finding a group of people that you’ll enjoy digging deep with is a necessity. Below are several examples of communities that can support you in your journey. 

Training and job search communities

  • Climatebase: Mobilizing talent for a climate-positive world. 
  • MCJ Collective: Tech and industry leaders who are building, working for or advising on solutions to address the impacts of climate change. 
  • OnePointFive Academy: Helping individuals and organizations build key technical skills to drive change and succeed in the green economy.
  • #OpenDoorClimate: A community of climate professionals making themselves available to chat with climate career seekers. 
  • Terra.do: Getting 100 million people to work directly on climate in this decade.
  • Voiz Academy: Launching climate careers from an ecosystem of training, community and job search support.
  • Work On Climate: Making climate work mainstream.

Professional networking communities

  • inClimate: A curated community of climate professionals, founders and investors across Europe and beyond. 
  • The International Society of Sustainability Professionals: Providing the community, training and tools needed to create sustainable change.
  • Net Impact: Inspiring and equipping emerging leaders to build a more just and sustainable world.
  • Reconsidered Change Hub: Supporting sustainable business professionals with both the “what” and the “how” of becoming a more effective agent of positive change. 
  • The Trellis Network: Exclusive in-person and virtual meetings with open, candid discussions put on by the company behind this website. 
  • There are also dozens of professional networks supporting specialist areas such as green buildings or sustainable finance.

Climate advocacy communities

  • Citizens’ Climate Lobby: Empowering everyday people to work together on climate policy.
  • Climate Reality Project: Advocating for action at the local, state and federal levels.
  • ClimateVoice: Mobilizing the voice of the workforce to urge companies to go “all in” on climate policy.
  • The Sierra Club: Amplifying the power of millions of members and supporters to defend everyone’s right to a healthy world.
  • Soapbox Project: Creating joyful community spaces to heal our climate anxiety and loneliness through connection, learning and action.

Local, personal and lifestyle communities

Most of the above organizations are nationwide and some are even global. Don’t forget to look in your own backyard for the people who care about the same things that you do. 

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Survey shows corporate water stewardship is ‘extremely important’

Integrating water stewardship into corporate sustainability can result in a more integrated, effective approach to climate adaptation, nature-based solutions and regenerative agriculture, according to a new report on the future of water.

Trellis data partner GlobeScan, along with the World Wildlife Fund, surveyed over 350 water and sustainability experts, and found that more than two-thirds of respondents believe it’s “extremely important” to integrate water stewardship into corporate sustainability initiatives.

The majority of experts also feel it’s at least “somewhat important” to integrate water stewardship into social initiatives such as farmers’ livelihoods, human rights and social justice, and women’s empowerment.

Corporate sustainability programs on water, climate and nature are often conceived and implemented in siloes with limited consideration of the many interdependencies and important trade-offs that can undermine outcomes and have unintended consequences. Carbon tunnel vision, for example, is one of the biggest obstacles to more progress on water priorities and when it comes to climate, experts continue to note that adaptation and resilience need more attention and resources, and water and nature have key roles to play in solutions. 

What this means

For sustainability professionals, one of the most pressing questions to address may be how to best align and integrate water with other sustainability priorities. Rather than continuing to jump from one hot issue to the next, sustainability teams must find a better way to integrate their work across these deeply interconnected areas. Science-based methods also call for integrated, holistic approaches that align with the natural processes of the environment. In addition, experts point to the distinct advantage of more integrated approaches and programs delivering multiple benefits that improve the return on investment and business case for sustainability programs, and are more compelling for external stakeholders.

Based on a global survey with 352 water and sustainability experts in 63 countries and territories conducted November-December 2024.

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Reusable packaging: 5 categories where it makes sense

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.

Containers for prepared foods
Containers from DeliverZero are being used in some Whole Foods stores.
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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Clean energy reps lobby Congress to save tax credits — and so can you

Clean energy industry representatives are taking to Capital Hill this week to protect clean energy tax credits from the Inflation Reduction Act (IRA). Organized by Clean Energy for America (CE4A) and representing more than 100 companies, lobbyists are asking Republican representatives to maintain crucial clean energy tax credits.

“The default position is full repeal of these energy tax credits,” said Andrew Reagan, president of CE4A and organizer of the lobbying push. But that position isn’t set in stone. Reagan explained that behind closed doors, some House Republicans don’t believe President Trump’s stated U.S. energy production goals can be achieved without incorporating renewable energy. This trepidation is providing an opening for clean energy lobbyists to get a foot in the door.

“Leadership in the House wants to start from a position of full repeal of these credits and then work back, with exceptions,” said Reagan.

In addition to the credits, Republicans want to rescind as much funding from the IRA as possible. That course of action, however, is proving more difficult than previously believed. According to recent reporting, leading House Republicans received an update from the Congressional Budget Office informing them that a majority of the IRA climate funding was already disbursed and beyond their reach. That leaves the clean energy tax credits as the main target.

What businesses can do

Essentially, Reagan said, if a company makes an appeal to their representative advocating for a tax credit they want to remain safe, then there’s a chance for it: “Companies and other stakeholders need to be communicating to their members of Congress.”

Some of the main credits being discussed include the:

Other organizations lobbying alongside CE4A include the Solar Energy Industries Association, a solar trade association; and Enphase, a manufacturer of batteries and solar panels.

This industry push follows a March 9, 2025 letter sent to the House Ways & Means Committee chairman Rep. Jason Smith (R-MO) by 21 Republican members of Congress, requesting that credits from the IRA promoting “future private sector investments” remain safe.

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Companies abandon material-agnostic approach to sustainable packaging

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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