To Regulate or Not To Regulate

The global printing ink market is valued at about $20 billion and that doesn’t count all the equipment or substrates used to produce a final product. Printing inks are created with chemistry and like many large industries where chemistry underpins the products,  regulatory compliance is a prerequisite for doing business. This is generally seen as a good thing. No one wants to harm our friends or our homes intentionally or unintentionally. Regulation creates a common definition for what is and what is not acceptable. Regulatory change often drives innovation. When there is market demand, the industry responds with a solution. Regulatory changes create a mandatory market demand for better or for worse. This article explores both the intended and unintended consequences of regulatory changes within the context of current industry events.

Pending Regulatory Change

At the time of this writing, four states have adopted Extended Producer Responsibility (EPR) guidelines regarding the packaging industry. Thirteen additional states have pending regulatory change. According to the Organisation for Economic Co-operation and Development, EPR is a policy approach that makes the producer of a product responsible for their products along the entire lifecycle of the product. Of the 17 states assessing EPR in some way for packaging, the State of New York added a different metric.

In February 2024, New York legislatures introduced identical bills AB5322B and SB4246B which would enact the Packaging Reduction and Recycling Infrastructure Act. If it passes as written, the act will create an EPR program that will also ban the use of certain toxic chemicals – a different metric than other state’s EPR programs. On the surface, this sounds acceptable. Toxic chemicals are bad. But, in life and chemistry seldom are things so black and white as to be good or bad. The world is full of shades of gray. If regulation is to help us have a common language, a common definition of what is and what is not considered toxic must be defined. Let’s dig in further. One of the proposed chemicals to be banned is carbon black, the primary pigment in black printing inks. It is important to note that carbon black used in printing ink has been deemed as NOT toxic by several regulatory agencies including the Occupational Safety and Health Administration (OSHA) and under California’s Proposition 65 regulation.

Immediate Impact on Ink Companies

Let’s imagine the scenario where ink companies may no longer use carbon black and think through the commercial implications. First, the ink companies would need to find an alternative raw material to carbon black. Over decades of research, carbon black is well regarded as the best source to achieve the desired black color while meeting past regulatory standards and being available. Ink companies would have to qualify an alternative material and would likely have to give up another desirable attribute that carbon black provides to the finished ink formulation. The sacrifice may come in color quality (i.e., legibility of printed words to consumers), how well the ink withstands friction (i.e., legibility of printed words to consumers after the packages rub against one another in shipping), a yet unregulated material that is potentially more toxic than carbon black (it’s happened, think about the alternatives to BPA in plastics) or a product that is not as readily available. When supply chains are challenging, it can delay the delivery of products, cause products to be over-ordered to get what is needed, and cause price increases.

When an organization must navigate a far reaching problem such as re-formulating every black ink it manufactures, other initiatives are de-prioritized. A company has a finite number of resources both human and non-human. The reality is that longer term innovation is usually the casualty of shorter term fires that must be put out. This means that future work to address longer term goals of lowering carbon emissions could be compromised as ink companies navigate a significant raw material change.

[caption id="attachment_7340" align="aligncenter" width="436"] What happens when long term innovation suffers due to the unintended consequences of banning specific chemistries without caveats?[/caption]

Impact On Consumers

Consumers could experience product outages, increased costs, increased environmental impacts and decreased label legibility negatively impacting communication.

It wasn’t that long ago that global supply chains were in chaos from shutdowns due to the global pandemic. People hoarded toilet paper and complained about inflation. Imagine the consumer impact if suddenly consumer product goods companies (CPGs) cannot use the packaging that is pre-printed with black ink, and they cannot get enough black ink to reprint. Grocery store shelves could become barren overnight, only able to offer products that can be supplied in packaging printed with colors other than black. Costs would increase to consumers as CPGs would be forced to pass on the cost of un-usable printed packaging and the increased costs associated with delivering similar performance. If alternate black inks can’t withstand the rub resistance that carbon black inks can withstand, CPGs will be forced to use additional processes to protect the print to ensure legibility. Overprint varnishes and overlaminates add costs. Also, which scenario is better for the environment? Do the additional processes required to deliver performance use more energy and thereby contribute more to carbon emissions than does black ink made from carbon black pigment? Can the un-usable printed packaging be recycled, or does it have to be land-filled?

[caption id="attachment_7339" align="aligncenter" width="469"] Imagine grocery stores with empty shelves due to a regulation banning black ink on packaging. The scene captures the potential impact of this regulation on product availability.[/caption]

This author has done a lot of voice-of-customer research in the printing industry. One of the top unmet needs I have heard from producers and buyers of applications ranging from labels to packaging to textiles is “we need a blacker black for inkjet inks”. In a world where printing color on demand is a key driver to inkjet, I always ask why a blacker black is needed. Most of the time, the answer is readability. When a consumer reads a label on a product it must be as legible as possible. No where is this label legibility more critical than on food packaging. Communication of the presence of allergens within a food product is literally the difference between life or death for millions of children and adults around the world. The text must be clear as to allergens contained directly within the product as well as if the product was made on shared equipment or within the same facility as common allergens. Most of the ingredient labeling is done in black with allergen statements appearing in bold black. Why? Black is the most legible color to the most people. Imagine printing labels in red or green and expecting someone who is color blind to read it. Key information could be easily missed putting people at risk and unnecessarily increasing CPG liability.

Impact of Regulatory Change

Over time, there is an expectation that regulations change to address societal need. After all, the world is dynamic, and people are constantly learning. We would be remiss if we did not adjust based on new findings. Regulatory changes are typically implemented to drive change of a behavior with the intent to benefit society.

At present, there is global pressure from many sources for companies to prioritize sustainability. Reducing carbon emissions has been deemed a key metric. This has driven many companies in the printing industry to adopt sustainability targets. Read the annual reports of the major ink manufactures and printing equipment OEMs and you will see sustainability goals identified along with key initiatives. Focusing on sustainability goals appears to be a positive for society. The result of the goal really depends on the metric. If the right metrics are set, in an ideal world we achieve a state of desired improvement. If the wrong metrics are set, the industry and the world can face unintended consequences. Regulatory change can bring benefits and downsides. There are unknowns when making regulatory change just as there are unknowns when entering a new market space. Thereby, it’s reasonable to assume we can implement a process of de-risking to assess regulatory changes and ensure the right changes with the right metrics are made to deliver the desired results – just as in innovation.

To de-risk potential unintended consequences of regulatory change common best practices are to:

• Communicate with industry: the experts want to make a positive impact and are likely to work with regulators to come up with win-win solutions.
• Manage the timeframe of change: if a regulatory change is required, work with industry to set a realistic time frame for implementation so that existing inventory can be responsibly depleted, new supply chains can be established and negative impact to consumers is minimized.
• Know the alternatives: when instituting change, understand the implications of next best alternatives.

Conclusion

As we navigate the evolving regulatory landscape in the ink industry, it is critical to maintain a balanced perspective. While the intent behind such regulations is undoubtedly to enhance public safety and environmental sustainability, the immediate and ripple effects on ink companies and consumers can be profound and, at times, disruptive. The proposed ban on carbon black in printing inks, as highlighted in this discussion, serves as an example of how well-intentioned regulations can lead to significant challenges for manufacturers and end-users alike with potentially worse outcomes than the status quo.

The potential impacts are far-reaching: from the scramble within the industry to find viable, cost-effective alternatives that do not compromise quality or availability, to the broader consumer market facing possible shortages and increased costs. This scenario underscores the necessity for a well-thought-out approach to regulatory changes—one that involves thorough risk assessment, stakeholder engagement, and a flexible implementation timeline to mitigate adverse effects.

Furthermore, it emphasizes the importance of continuous dialogue between regulators and the industry to ensure that changes are both practical and beneficial. By fostering collaboration and understanding, we can aim for regulatory frameworks that not only meet safety and environmental objectives but also support innovation and market stability.

In conclusion, while the question of whether to regulate is complex, the answer lies in our ability to refine our approach to regulation itself. Through careful planning, open communication, and a commitment to understanding the full spectrum of consequences—both intended and unintended—we can steer the industry toward a future where safety, sustainability, and supply chain stability are in harmony. This approach will not only safeguard the public and the planet but also preserve the vitality of the ink industry and its ability to serve the needs of consumers around the world.