The City of Portland Wants a New Carbon Tax. It Might Kill Bottle Recycling in Oregon to Get One.

If the Owens-Brockway glass plant closes, all of Oregon’s bottles would have to be shipped out of state—a prodigious use of diesel fuel—or thrown in landfills.

Oregon Bottle Redemption Center. (Wesley Lapointe)

Located southeast of Portland International Airport, the hulking Owens-Brockway glass plant looks like a pair of enormous hands, open to the sky, as if praying for relief.

Inside, crushed glass, called cullet, speeds along conveyor belts and is color-sorted by optical scanners. Glass from brown Breakside bottles is separated from Heineken green.

The cullet pours into a furnace, where it's soon hotter than lava—nearly 3,000 degrees. Presto: new bottles for Oregon beer- and winemakers.

Every day, the plant recycles the equivalent of 440,000 beer bottles.

All the recycled bottles in Oregon end up at Owens-Brockway in Cully. (Wesley Lapointe)

For the plant's 115 remaining workers, it's a hot, noisy job—but a good one.

"You don't need a degree or a lot of experience, and you end up making a good family wage with benefits," says Bob Tackett, president of United Steelworkers Local 330, a union that represents Owens-Brockway workers.

The Owens-Brockway plant occupies a prominent space in the Cully neighborhood. The plant stands on 78 acres and has operated continuously since 1956.

It's even more significant because it's the only place in Oregon that takes glass for recycling—more than 100 million pounds last year. Such reuse is a key strand of Oregon's DNA—the Bottle Bill, which in 1971 made Oregon the first state in the nation to put a return deposit on drink containers.

"The Owens-Brockway plant takes 100% of the glass bottles brought by the Bottle Bill," says Jules Bailey, chief stewardship officer of the Oregon Beverage Recycling Cooperative.

All the recycled bottles in Oregon end up at Owens-Brockway in Cully. (Wesley Lapointe)

However, the plant is struggling. Last year, the company idled one of its two operating furnaces, laying off 93 workers. A sister plant in Atlanta closed in 2018 amid a long-term industry shift to aluminum, plastic and paper drink containers.

Soon, the Portland City Council could vote whether to deliver a body blow to the glass plant.

Commissioners are scheduled to consider two new fees on carbon emissions that would increase the glass plant's local taxes by more than $1 million a year. Overall, the new taxes would raise more than $11 million from about 80 companies.

If Owens-Brockway closes, as Tackett fears, all of Oregon's bottles would have to be shipped out of state—a prodigious use of diesel fuel—or thrown in landfills. A big part of the Bottle Bill would be kaput.

Portland—and every city—faces a climate crisis. Scientists have demonstrated that global warming is an existential threat. And as a candidate for reelection last year, Mayor Ted Wheeler faced uncomfortable questions about Portland's lackluster progress on its goals to reduce emissions.

In June, the City Council declared a "climate emergency," vowing to reduce carbon emissions below 50% of 1990 levels by 2030 and to eliminate net emissions by 2050.

The architect of the proposed carbon taxes says she's taking action on the climate emergency that Wheeler and the City Council declared.

"The mayor has been very clear with me that he wants to see the city of Portland lead—and act—on climate," says Andrea Durbin, director of the city's Bureau of Planning and Sustainability. "That's what we are implementing."

Evraz Steel. (Wesley Lapointe)

The proposed taxes, which Durbin hopes could come before the council in March, may be the single policy that most clearly reflects Portland City Hall today, both in its ambitions to change the world and its lack of an effective strategy to do so.

A review of 1,300 pages of city emails and interviews with dozens of involved parties yield a picture of a tax hike on "polluters" that was constructed hastily, in almost complete secrecy, and with little care for unintended consequences—such as its effects on Portland's manufacturing sector, its booming green energy industry, or even the Bottle Bill. In a realm that matters intensely to Portlanders, the City That Works furtively pursued a policy with the subtlety and sophistication of a sledgehammer.

As the city struggles to steady its economy amid a pandemic and civil unrest, the new tax proposals come on top of the 2018 Portland Clean Energy Fund, the billion-dollar business tax imposed by Oregon's Student Success Act, and hefty homeless services and preschool taxes that passed in 2020.

Evraz Steel, whose mammoth North Portland mill would be the largest payer of the carbon taxes, is not happy.

Evraz general manager Don Hunter says the city ambushed his company—a common response WW heard from businesses that would pay the new taxes. "It's just a cash grab," Hunter says. "It's egregiously bad policy, and it's punitive instead of trying to make things better."

Andrea Durbin. (Bureau of Planning and Sustainability)

When the Dalai Lama visited Portland in 2013, 10,000 spectators filled Veterans Memorial Coliseum to see him.

Among those joining the Tibetan spiritual leader onstage in a panel discussion was the future architect of the proposed taxes: Andrea Durbin, then executive director of the Oregon Environmental Council, one of the state's oldest environmental nonprofits.

Although she'd been part of every major piece of Oregon environmental legislation since 2007, Durbin told the Dalai Lama she was failing her son and his generation.

"We need to change our ways and get off fossil fuels," Durbin said then. "And we need to hold our politicians accountable."

In April 2019, Wheeler hired Durbin to lead the city's Bureau of Planning and Sustainability. In so doing, he put her in a position to drive policy in a way she could only dream of as an advocate.

Durbin, 50, is no clock-puncher. Her emails show that after eating dinner with her family, she often goes right back to work.

"She's intense," says Doug Moore, executive director of the Oregon League of Conservation Voters, who worked closely with Durbin in Salem.

In the capital, Durbin played a leadership role in Oregon's renewable portfolio standard, which forced utilities to switch to green energy. She led the adoption of clean fuel standards and helped secure the closure of the state's last coal plant, among other accomplishments.

In November, Durbin made her boldest move at the city when she announced her office was recommending two new fees that would raise millions in revenue. She planned to use the money to expand her staff and build carbon reduction programs.

Durbin proposed that Portland become the first U.S. city to levy a tax per ton on greenhouse gas emissions above 2,500 metric tons annually, along with a flat fee on any company with a state emissions permit (see "Who Pays," below).

The fees would raise about $11.3 million a year from around 80 companies. Of that sum, just two—Evraz and Owens-Brockway—would pay more than one-third.

The new fees do not call for emissions reductions or offer polluters any incentives for investing in more efficient equipment, nor do they address the biggest local source of carbon emissions (see "Where the Emissions Come From," below).

Instead, emails show, Durbin's bureau focused on a plan that would be quick and perhaps easy: tax a very small number of smokestack businesses already under fire from social justice and environmental advocates because they are mostly located—and pollute—in low-income neighborhoods.

The research that underpins her proposals is contained in a nine-page consultant's report focused entirely on "practical examples of revenue-generating mechanisms."

Evraz Steel. (Wesley Lapointe)

Durbin's approach to carbon regulation is unusual in a couple of ways. First, greenhouse gas regulation is usually done at the state or national level. (California and 10 Northeastern states have cap-and-trade systems that reduce emissions through a market-based mechanism.)

Second, documents show she created the policy in the shadows, without the extensive outreach and public process that normally accompany new city policies—at least in Portland.

Gov. Kate Brown and key lawmakers were in the dark. "The city did not coordinate with the governor's office on their proposal," says Kristin Sheeran, Brown's climate adviser.

That matters because the city and the state could apply new and different carbon regulations and fees on the same companies, which the firms argue would duplicate state efforts.

Durbin acknowledges not consulting lawmakers or the governor's office.

Her goal, she adds, was to develop a policy that could work practically, then bring others, including the state, into the discussion.

Sheeran says Brown would prefer a more comprehensive approach.

"Rather than just paying a tax, Gov. Brown instead supports a strong and coordinated approach to carbon reduction that addresses Oregon's major pollution sources," Sheeran says, "while transitioning to a more equitable, clean energy economy."

Durbin also didn't contact the affected companies.

Evraz learned indirectly about the taxes from the Portland Business Alliance just before the city went public Nov. 19.

"No phone call, no email," Hunter says. "It was stunning."

Evraz Steel. (Wesley Lapointe)

Durbin was more forthright with her allies in the environmental community. Emails show Durbin informed environmental advocates about the taxes in October, although she didn't brief the city's Planning and Sustainability Commission about the taxes until three weeks after they were announced. (That slight led commission chair Eli Spevak to write to Wheeler, asking him to delay filling three upcoming vacancies on the commission until the city clarified whether the commission would have any role on climate issues.)

Corky Collier, executive director of the Columbia Corridor Association, which has dealt with the city for 15 years on contentious, expensive initiatives, such as stormwater fees for his members, says the lack of consultation is unusual.

"I can't recall anything like this in terms of the secrecy involved or the lack of outside input," says Collier.

Durbin says that's because her bureau was still developing the policy and she didn't want to share it until it was fully vetted by the city's legal and tax experts.

"We needed to have a draft that was viable and operable," she says. After the city made it public, she realized, "it was clear we needed to have more time."

Jules Bailey at his election night party in 2016. (Christine Dong)

In 2016, Jules Bailey ran against Wheeler for mayor, emphasizing the green credentials he'd earned as chairman of Oregon's House Committee on Energy and the Environment.

Today, Wheeler's hastily considered carbon taxes are a major threat to the Bottle Bill, which is Bailey's to safeguard.

Used bottles have no value except to glass manufacturers. If Owens-Brockway shutters its glass plant, the returned bottles are worthless.

As a legislator, Bailey, 41, worked on climate policy with Durbin a decade ago. Today, he chooses his words carefully:

"I'm surprised and concerned that people and stakeholders who clearly have an interest in a low-carbon future for Oregon weren't brought in to help make this policy workable and effective," Bailey says. "A few extra phone calls and a more transparent public process might have avoided this."

Jules Bailey wants to keep sending the Oregon Beverage Recycling Cooperative’s glass (shown here) to Owens-Brockway. (Wesley Lapointe)

Durbin points out that Portland's carbon tax will fall on "polluters," and Owens-Brockway certainly qualifies. Residents of the Cully neighborhood have fought for years to get the plant to stop pumping lead, chromium and other toxic substances into the air, and have challenged—along with OEC, Durbin's former employer—the renewal of the plant's state permits.

Owens-Brockway officials declined to comment for this story, but they told city officials in December the company could not afford the $1 million a year it would have to pay in new taxes.

"Our business faces tremendous competitive pressure from outside the city and the state," wrote John Cayton, a company attorney who noted the plant currently pays about $1.6 million a year in property and other local taxes. "Our plant simply cannot remain profitable if the carbon tax measure is passed as proposed."

One example of how much the plant is struggling: OBRC gave Owens-Brockway a $500,000 discount last year. "We lose money on glass sales, so this was essentially a loss on top of a loss," Bailey says. "We felt it was critical, even during the uncertainty of the pandemic, that we help them keep operating."

Jules Bailey wants to keep sending the Oregon Beverage Recycling Cooperative’s glass (shown here) to Owens-Brockway. (Wesley Lapointe)

In December, after critics hammered him, Wheeler pushed a council vote on the new taxes back to this year and a new council.

Durbin hopes the City Council will still take up the new taxes in early March.

She says she's heard critics' concerns and she looks forward to finding solutions to them. "We're really looking at how do we create a policy that incentivizes more efficient output?" Durbin says. "We're not interested in seeing any entities leave Portland."

As the city's climate czar, Durbin has had three bosses in less than six months. Wheeler oversaw the Bureau of Planning and Sustainability until September, when he shifted the bureau to Commissioner Jo Ann Hardesty. Then, in January, he assigned it to Commissioner Carmen Rubio.

The fees were rolled out on Hardesty's watch, but she tells WW they were mostly Wheeler's idea, and work by Durbin's office was "well underway" before she became aware of it.

No matter: She favors plowing ahead.

"We don't have years and years to develop climate policy proposals anymore," Hardesty says. "We need urgent action now."

Environmentalists such as Mary Peveto, executive director of Neighbors for Clean Air, agrees. She says the "jobs versus climate" frame is a false construct.

"I am frustrated that in this city, we grandfather in old, dirty jobs at the expense of innovation," Peveto adds. "You just need to look at California to see that the push to meet climate goals spurs job growth and new industries."

A welder works on side assemblies for intermodal rail cars at the Gunderson Rail Car Plant in Portland, Oregon on Tuesday, Jan. 15, 2013. (Natalie Behring/Bloomberg News)

But it's unclear how enthusiastic others are. A Zoom meeting with Wheeler, Rubio and about 20 affected companies recently left at least four business representatives feeling that a plan the Portland Business Alliance calls "one of the worst pieces of proposed policy by any city of Portland bureau in years" was likely to get sidelined.

Rubio took over the bureau just three weeks ago."From a values perspective, I'm supportive," she says of the proposals, "but I'm still doing my due diligence."

Wheeler bristles at PBA's assertion that the proposed taxes are the worst policy formulated in City Hall in years and that BPS didn't do its homework. "Ridiculous," he says.

The process Durbin followed was fine, he adds, and affected companies had plenty of opportunity to raise their objections in a public comment period that ended Jan. 8.

The mayor says he remains committed to cleaning up Portland's air and thinks those who produce the most emissions should pay the most. He hopes some version of the taxes will move forward, but he won't put any timetable on it.

"The world has changed, employers are struggling," he says. "Let's take a deep breath, and if the policies need to be tweaked, we'll do that."

Related: Inside the company that would pay the biggest share of the city's carbon tax.

Oregon Bottle Redemption Center. (Wesley Lapointe)

Who Pays

The city of Portland is proposing two new taxes: One, called the Healthy Climate Fee, would charge all companies that emit more than 2,500 metric tons a year of greenhouse gases $25 per ton above that threshold. About 18 companies make that list, based on 2019 data.

About 80 companies that hold air discharge permits would pay a second fee, called the Clean Air Protection Fee, ranging from $15,000 to $40,000. (The Tax Foundation, a Washington, D.C., nonprofit, has challenged the city's use of the word "fee," arguing that since it doesn't correspond to direct services, it's a tax and requires approval by Portland voters.)

Here are the five largest payers, each of which would owe a per-ton fee and a $40,000 flat fee.

Source: City of Portland Bureau of Planning and Sustainability

Where the Emissions Come From

Several of the industrial companies who would have to pay the city's new carbon taxes have remarked on a paradox: Industrial polluters are only the fourth-largest source of emissions in Multnomah County, and they account for by far the largest reduction in emissions of any of the leading sources of greenhouse gases.

"[Durbin] is smart, has fought in good ways for the environment, and she certainly understands the biggest air quality issues in Portland are transportation and diesel, but this proposal goes after industry because it's easy to attack industry," says Jim Jones, president of Bullseye Glass, which would pay $123,000 under the proposals.

Here are the current sources of carbon emissions in the county and how much they've changed in 30 years:


Economists say local climate regulation, like that proposed in Portland, promotes "carbon leakage."

The concept is that companies will act to avoid the tax, curtailing or closing plants. But Oregonians won't stop using steel or needing new bottles for beer and wine.

The result: Production gets outsourced to places with less carbon regulation. Portland loses jobs, and the costs and emissions produced by importing products once made here undercut local carbon reductions.

"As much as I love carbon taxes, this should really be done at a national level," says Portland economist Joe Cortright. "For it to work correctly, incentives for innovation and investment are really important. If it only applies to a small area, it doesn't create many incentives."

Evraz Steel. (Wesley Lapointe)

Consider Jay Poizer. He runs Bridge City Steel, a 40-employee metal fabricator in Northwest Portland. Poizer buys steel from Evraz and makes it into parts for other companies.

Poizer bought his building in Northwest Portland because of its location near Evraz in the middle of the city's industrial district.

"There are hundreds of Portland companies that serve the bigger companies. You can tax these big companies, but some of them are not going to reinvest here," Poizer says. "If they pull out, the city will also lose the smaller companies like mine."

Without Evraz anchoring the supply chain for metals companies, Poizer says, Portland's high-cost business environment loses its appeal: "There's no reason to be here if you can be in Hillsboro or Wilsonville."

Evraz ships 30-ton steel slabs from its Canadian mill to Portland for processing. (Wesley Lapointe)

Willamette Week’s reporting has concrete impacts that change laws, force action from civic leaders, and drive compromised politicians from public office. Support WW's journalism today.