The $25K-a-day question: how to decide which Capex projects to fund now

Sound familiar?

Ops is pushing for a conveyor overhaul they’ve been targeting for two years.

Procurement says the equipment you’re planning to buy next year just became 20% more expensive due to tariffs and advises to consider buying it now.

And legal just flagged a major customer’s EPR deadline, which carries a $25,000-per-day fine for noncompliance; they’ll be leaning hard on you to provide innovative solutions, and it could impact demand.

Meanwhile, finance is pushing to “tighten our belts.”

In short, everything is urgent.

Welcome to capital planning in 2026.

Packaging companies have always faced competing internal interests for a slice of the capital budget. What's different now is that there are more variables combined with increased uncertainty. EPR regulations and tariff volatility, for example, have added a new dynamic that doesn't always come with a clean ROI story.

The good news: the operations and finance leaders who are navigating this most effectively aren't working with larger budgets. They're working with clearer priorities and a better process.

In three steps, you can, too:

Step 1: Distinguish 'must-do' from 'should-do' capital projects

This may sound obvious. It isn't. Many capital reviews mix compliance-driven projects with productivity and growth investments, creating a distorted playing field from the start.

Take EPR. One in five Americans now lives under a packaging EPR law, and that number is growing. The infrastructure investments your customers will need to track, report, and comply with aren't competing with your own automation upgrades; at least not directly. But it could affect demand for specific packaging innovations or require changes to the products you already deliver, as well as what is required to manufacture them.

Tariffs have a similar dynamic, but with a timing twist. Many packaging equipment manufacturers have begun regionalizing their sourcing in response to swings in trade policy. That puts a genuine decision on the table: buy domestically sourced equipment now, or wait for policy clarity and potentially absorb a 20–25% cost increase. That's not a traditional Capex question. It's a risk-timing question that needs its own lane.

Do this now: Give your team visibility into your entire capital portfolio and make it easier to distinguish between mandatory/compliance projects and discretionary/value-add projects, along with the rationale for each. Having that insight within easy reach will ensure that the best investments, not the loudest voices, win. It’s a solid use case for purpose-built capital planning and portfolio strategy software.

Step 2: Score your discretionary projects consistently, every time

Once mandatory spending is accounted for, you're down to the projects where real prioritization happens. Here, too, many organizations are still winging it, relying on spreadsheets, gut feel, and whoever made the most compelling case at the last planning meeting.

That's a problem, especially now. Automation is no longer a nice-to-have for most packaging operations; it's the primary lever for meeting throughput targets without adding headcount. The stakes of funding the wrong project, or deferring the right one, however, are real.

A practical benefits scoring model covers four dimensions:

Strategic alignment: Does this project support a stated priority, for example, throughput, waste reduction, competitive opportunity, or labor efficiency?
Financial return: What's the NPV and ROI? For automation specifically, model labor cost avoidance at projected future wage rates, not just today's numbers.
Cost of doing nothing: What's the exposure if this project slips 12–18 months? Equipment failures, customer penalties, safety incidents — deferral risk belongs in the model, not just in someone's head.
Execution readiness: Is this project scoped, sourced, and staffed? A high-value project that can't be executed this year shouldn't block a shovel-ready project that can.

Do this now: Run every discretionary project through these four dimensions before your next cycle. Assign weights that reflect your organization's current priorities, not last year's. And be sure every candidate project is being evaluated using consistent metrics. The model won't make every call for you — but it will make the tradeoffs visible. That, again, is a solid use case for enterprise Capex software.

Step 3: Stop treating capital planning as an annual event

This is the hardest shift — and the most important one.

Most packaging companies still run capital planning as a once-a-year budget exercise. A project list gets approved in Q4, and then it basically goes static. It just doesn't work anymore.

Tariff policy has shifted multiple times in the past 18 months. EPR program timelines have accelerated. Equipment lead times have swung wildly. A project that was a clear go in January can look completely different by July if, for example, the domestic supplier you were counting on now has a 14-month backlog, or a new state law has just moved your compliance deadline up by a year.

The industry leaders handling this well have moved to a quarterly, rolling capital view that tracks not just approved projects but also the pipeline under evaluation, along with the key assumptions that could change any project's status. When a tariff announcement drops, they're not scrambling. They're updating a model that's already live.

Do this now: Set up a quarterly capital review (we call it a “Capex Council”) that includes operations, finance, IT and other stakeholders. Don't use it to re-litigate approved projects. Use it to surface changes in assumptions, such as cost, timing, compliance deadlines, and material forecast variances. Thirty minutes of proactive review beats a reactive fire drill every time.

The bottom line

The paper & packaging companies that come out of 2026 in the strongest position won't necessarily be the ones that spent the most on capital. They'll be the ones who spent it most effectively.

EPR, tariffs, and the automation imperative aren't going away. But implications of them are manageable if you have the right insights, process and discipline. This requires a live, transparent view in a single system of record that updates as the world changes.

And those suboptimal meetings in which the best investments didn’t have a chance to rise to the top? They’ll be a thing of the past.