United States: California Legislature Narrows Legislation To Now Regulate Single-Use Packaging And "Most Littered" Single-Use Plastic Products

Update—May 22 Amendments

The California Assembly and Senate recently amended a pair of identical bills, SB 54 (Senator Ben Allen - D), and AB 1080 (Assembly Member Lorena Gonzalez - D), which would impose far-reaching regulation of single-use consumer product packaging and the top 10 most littered plastic consumer products in California (priority single-use plastic products). The bills, which previously covered all single-use consumer products, were amended on May 22, 2019 to narrow the scope of products covered and require the California Department of Resources Recycling and Recovery (CalRecycle) to adopt implementing regulations on or before January 1, 2023.

The implementing regulations will mandate that:

(1) single-use packaging and priority single-use plastic products are source reduced to reusable packaging and products "to the greatest extent feasible," and

(2) all single-use packaging and priority single-use plastic products in the California market are recyclable or compostable.

Taking a step-wise approach, the bills would require a manufacturer of single-use plastic packaging or priority single-use plastic products to demonstrate a recycling rate of not less than 20% on and after January 1, 2024, and not less than 40% on and after January 1, 2028, as a condition of sale, and would authorize CalRecycle to impose a higher recycling rate as a condition of sale.

These bills bring into focus the state's far-reaching consumer product recycling goals: former Governor Jerry Brown set a goal of 75% recycling of solid waste by 2020, directing CalRecycle to take a statewide approach to decrease California's reliance on landfills. According to an August 2017 CalRecycle report, total recycling rates in California fell to 44% in 2016, which is the lowest rate since the 75% statewide goal was established in 2011.1 Approximately 35.2 million tons of garbage were dumped into municipal solid waste landfills or exported in 2016, an increase from 29.3 million tons in 2012.2 And, achieving existing recycling goals appears even less attainable, as both China and India have imposed bans on imports of material to be recycled, leaving the US with limited outlets to send recyclable materials.3

Amended Law Would Target Single-Use Packaging and Priority Single-Use Plastic Products

The amended bills narrow the still expansive scope of products and packaging that would fall within the scope of the regulation. Although "single-use packaging" remains undefined, the amendments provide guidance for the definition of "priority single-use plastic products"—the top "10 single-use plastic products that are the most littered in California, as determined by CalRecycle based on litter surveys conducted in California between 2017 and 2020." As part of its implementing regulations, CalRecycle would determine which packaging shall be considered "single-use" and thus subject to the mandates. The only products expressly exempt from the scope of the bills are medical devices and products that are required to be sterile, prescription medicine, and the packaging used for such products. In addition, the amended bills permit CalRecycle to identify single-use packaging or single-use plastic products that, while determined to be single use, "present unique challenges in complying" with the proposed law, and therefore CalRecycle will develop a plan to phase the packaging or product into the regulations at a later date.

Single-use plastics are a recycling target because many plastic products are not currently recyclable and often end up in the natural environment. The Legislature estimates that only 15% of single-use plastic is recycled in California, and state and local governments, therefore, have increasingly attempted to minimize the presence of plastics in food service and other facilities to reduce this waste stream.

Proposed Law Would Delegate Expansive Authority to CalRecycle

AB 1080 and SB 54 contain few details and require CalRecycle to develop regulations to achieve the specified mandates. Prior to adopting the regulation, however, CalRecycle would adopt a "scoping plan" to evaluate the feasibility of establishing new labeling requirements regarding the recyclability or compostability of priority single-use products and packaging, minimum postconsumer recycled content requirements for single-use packaging and priority single-use plastic products, an extended producer responsibility (EPR) program to require manufacturers and retailers to contribute to the costs associated with processing the single-use packaging and priority single-use plastic products they produce, and other measures. The amended bills require that the scoping plan include "extensive outreach to stakeholders," including public workshops and stakeholder meetings.

After the scoping plan is complete, on or before January 1, 2023, CalRecycle would be required to adopt regulations to determine which types of packaging are considered "single-use" and thus subject to the regulation. CalRecycle would also be required to identify the top 10 single-use plastic products that are the most littered in California; however, this category is defined under the bills and will be determined by CalRecycle based on the results of recent litter studies.

Complex Application & Broad-Reaching Impacts

By including all single-use packaging and the top 10 littered single-use plastic products, the bills represent some of the most comprehensive and far-reaching legislation to regulate consumer product packaging in California. Further, they delegate unprecedented authority to CalRecycle to regulate single-use packaging and priority single-use plastic products to achieve the source reduction and recyclability mandates in the bills.

The proposed bills would have two main impacts. First, the bills would require a significant, immediate increase in recycling by the state, and the state—along with local municipalities and counties—would need to determine where and how to process the increase in recycled materials. Second, the bills would impact virtually all manufacturers distributing or selling any single-use packaging or priority single-use plastic product in California, reaching far beyond prior California laws such as the 1991 Rigid Plastic Packaging Container law. The true impact of the bills would be unknown until CalRecycle drafts implementing regulations, but they clearly will impose significant source reduction and recyclability mandates on manufacturers of single-use packaging and priority single-use plastic products within a short timeframe.

Notably, the bills would require manufacturers to meet extremely high recycling thresholds, but the bills fail to address the infrastructure needed to handle this material domestically. A Department of Finance analysis of SB 1383 (Lara; Chapter 395), which focused solely on organic wastes, indicated the state had to more than double organic waste collection and recycling infrastructure and capacity in less than 10 years to meet the requirements of the bill, costing upward of $20.9 billion. The universe of packaging and products impacted by these bills dwarfs the organics sector, and California has nowhere near the level of infrastructure that is necessary for manufacturers to meet their compliance obligations.

The complexity of the proposed law should be emphasized as well. For example, the impact on manufacturers would translate to a material impact on retailers. Manufacturers work with retail stores on a semi-annual or quarterly basis to determine how their products fit into the stores' shelving planograms. If manufacturers are required to reformulate their packing and design, the repackaging could have a resulting impact on the size and presentation of their products. This, in turn, would impact where the product could be displayed in a retail store, which would need to be implemented in concert with an updated planogram for each store. And because consumer products are shipped and warehoused in cases and pallets, changes in individual unit packaging create a cascade of effects throughout the distribution chain.

Beyond California—Broader Policy Implications

The reach of the proposed bills would not be limited to California because product and packaging manufacturers sending priority single-use plastic products and packaging into the state—the fifth largest economy in the world—would be subject to the mandates, regardless of where the product or packaging is manufactured. It is therefore likely that products and packaging will be redesigned for the entire US market, if not the global market. California is not alone in the single-use battle, although other states have focused exclusively on single-use plastics rather than single-use packaging more generally. At the beginning of April 2019, New York announced that the state legislature approved a ban on single-use plastic bags, effective March 1, 2020, making New York the second state in the country to pass such a ban, after California. And in the European Union, the EU Parliament recently voted to ban single-use plastic products for which alternatives exist on the market by the year 2021.

More to Come in the Single-Use Saga

The California Legislature is poised to push forward these amended bills, whether in their current or revised form. The Senate and Assembly passed each bill in their respective houses on May 30, 2019. The deadline for the bills to pass in the second house, either the Senate or Assembly depending on the house of origination, is September 13, 2019. If passed, the bills would land on the Governor's desk to be signed or vetoed within 30 days, by October 13, 2019. If the bills fail passage this year, because California is in the first of the two-year legislative session, the bills may resume where they left off in the process during the next legislative session.

Although narrowed in scope by the May amendments to eliminate the regulations of single-use consumer products more generally, these bills still represent some of the most far-reaching and significant regulations of consumer products and packaging ever in California. From a consumer product standpoint, the bills have been largely narrowed by the amendments to the top 10 most littered plastic products, but from a packaging standpoint, the bills still seek to regulate all single-use consumer product packaging broadly delegate regulatory authority to CalRecycle. Importantly, there is no identified funding mechanism in the proposed bills, which means the proponents will need to seek a budget request, or (in the more likely scenario) CalRecycle would be given the authority to impose a fee on regulated entities to cover costs.

Footnotes

1.California Department of Resources Recycling and Recovery, State of Disposal and Recycling in California – 2017 Update, Publication # DRRR-2017-01612, at 1 (Aug. 2017)(hereinafter CalRecycle Report). This figure was calculated in relation to waste generation per resident per day and measures all disposal-related activity.

2. Id. at 5.

3. "Local recycling programs rely on foreign countries' willingness to import recyclable materials." Letter from Alameda County to Governor Gavin Newsom RE: Statewide Commission on Recycling Markets (Draft) (Feb. 5, 2019).

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