Key Takeaways
- What Is Happening? On March 7, 2025, Governor Newsom declined to adopt CalRecycle's initial draft regulations under California's Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54), citing concerns that the proposed rules would impose excessive costs on businesses and consumers. In response, CalRecycle reopened the rulemaking process, convening its SB 54 Advisory Board on March 21, 2025, to discuss Governor Newsom's directive and plan the development of a revised regulatory package. CalRecycle published its Report to the Legislature in May 2025, detailing SB 54's implementation status, and reissued the proposed SB 54 regulations on May 16, 2025.
- Who Is Impacted? All producers of "Covered Materials," which includes single‑use packaging and plastic single-use food service ware distributed in California, are directly affected by the revised rulemaking process. In particular, brand owners must closely monitor the process as they are likely to be considered the producer of the covered material and will be responsible for compliance under the EPR program. In certain cases, retailers and distributors may also be considered producers, depending on the covered material and the company's relationship to the material when it is sold, distributed, or otherwise used in California.
- What Should I do? Producers that offer for sale, sell, distribute, or import covered materials into California should consider submitting written public comments by the June 3, 2025, deadline and attending the hybrid public workshop hosted by CalRecycle on May 27, 2025.
Background
Enacted in 2022, SB 54, California's Plastic Pollution Prevention and Packaging Producer Responsibility Act, transfers the cost of collecting, processing, and recycling covered material from local governments to producers (see B&D news alert, here). The law targets single‑use packaging and plastic food service ware (covered material), with the goal by 2032 of ensuring that 100% of single-use packaging and plastic food service ware is either recyclable or eligible to be labeled as compostable.
SB 54 required CalRecycle to adopt implementing regulations by March 8, 2025, following a public consultation process. CalRecycle issued a first draft of implementing regulations in March 2024 and received extensive public comment. CalRecycle substantially revised the draft regulations twice in response to public comment.
California's Governor Newsom sent the regulations back for revision, citing excessive costs and burdens on businesses. The regulations were expected to cost approximately $36 billion to implement, resulting in an extra $300 annually in expenses for each Californian household. CalRecycle initiated a new rulemaking process, proposing updated draft regulations on May 16, 2025.
Key Regulatory Provisions
1. Covered Materials
The proposed regulations would add a new definition of "covered material" which includes plastic single-use food service ware and single-use packaging.
Plastic Single-use Food Service Ware
"Plastic single-use food service ware" is defined as including, but not limited to, "plastic-coated paper or plastic-coated paperboard, paper or paperboard with plastic intentionally added during the manufacturing process, and multilayer flexible material." Examples of "single-use food service ware" include trays, plates, bowls, clamshells, lids, cups, utensils, stirrers, hinged or lidded containers, straws, as well as wraps or wrappers, and bags marketed, designed, or intended for use by food service establishments. With respect to food service ware, "single-use" is "an individual item [that] is disposed of after one use if it is discarded after serving one or more of the purposes... without being subsequently washed and used again."
Single-use Packaging
"Packaging" is defined as including "any separable and distinct material component used for the containment, protection, handling, delivery, or presentation of goods by the producer for the user or consumer". Examples of "packaging" include sales packaging, transport packaging, and ancillary elements directly attached to or hung onto a product and that performs a packaging function. SB 54 encourages reusable and refillable packaging and provides an exemption to incentivize this use so long as the reuse or refill is associated with the original product. Reuse with a different product does not qualify for the exemption.
For detailed categorization, the regulations reference the Department's Covered Material Category List, which is available here. The list identifies six broad material classes for packaging – (1) glass, (2) ceramic, (3) metal, (4) paper and fiber, (5) plastic, and (6) wood and other organics.
2. Who is the Producer
Like the statute, the regulations have a hierarchical definition of obligated "producers" in terms of the type of covered material and the company's relationship to the material when sold, distributed, or otherwise used. Most notably, compared to the December 2024 draft, the proposed changes now clearly differentiate between food service ware and other covered materials with distinct identification hierarchies for each category.
Similar to enacted EPR laws in other states, the producer is primarily the California-based manufacturer that either owns the brand/trademark or has an exclusive license to manufacture under that brand in the state. If the manufacturer is not located in California, the hierarchy shifts to the California-based brand owner of the product sold in product packaging or food serviceware. If neither is present in California, the in-state licensee with exclusive rights to the brand takes responsibility. If there is no brand owner or licensee in the state, the person who first sells or distributes the goods in the state is the producer of all covered material items. If a wholesaler or retailer in the state subsequently obtains the good and uses additional items of covered material packaging, the wholesaler or retailer is considered the producer of such additional items only.
When multiple brands appear on a product, priority is given to the manufacturer's brand or trademark, then to the "most prominently" displayed brand or trademark, with the option of allowing brand owners to "agree among themselves to designate one of the brands or trademarks" as responsible.
3. Exemptions
Producer specific -
- Small volume producers with less than $1,000,000 in gross sales in the state may apply for exemptions that, if approved, would be valid for two years (extended from the previous one-year period) and could be renewed for an additional two years from the original expiration date.
Material specific -
- Empty packaging materials: A person who manufactures, sells, offers for sale, or distributes empty or unused packaging materials would not be considered a producer. This exemption was newly introduced in the March 2025 draft regulations and was not included in the earlier version.
- Packaging required to comply with USDA or FDA standards.
- Reusable or Refillable Packaging: Defined as packaging or food service ware that is designed and marketed for multiple uses of the same product, built durably to maintain functionality over time, and supported by appropriate infrastructure to ensure convenient and safe reuse or refilling through multiple cycles. Producers violate the Act if they falsely claim packaging or food service ware is reusable or refillable when it does not meet the defined criteria.
- Packaging for medical devices and prescription drugs.
- Packaging for certain non-prescription medical products.
- Packaging used for the long-term protection or storage of a good having a lifespan of not less than five years.
- De minimis exclusions: A package component may be exempted as de minimis in weight or volume if it is not an independent plastic component and does not affect recyclability or hinder recycling processes. A PRO or Independent Producer may submit a request to CalRecycle for approval of such an exclusion.
4. Producer Obligations
a. Reporting
Each producer will likely be required to report the following information to the PRO: (1) the total weight of material sold, distributed, or imported in or into the state; (2) the total number of plastic components sold, distributed, or imported in or into the state; (3) the total weight of material that is recycled; and (4) the total weight of material disposed of. On January 8, 2024, CalRecycle selected the Circular Action Alliance (CAA) as the state's inaugural, single PRO.
b. Registration
Each producer, including producers of covered material seeking an exemption, must register within 30 days of the effective date of the regulations. According to the Advisory Board's meeting minutes, CalRecycle proposes that all producers become members of the PRO by October 1 and submit their 2023 supply‑baseline reports by November 1, 2025.
c. Labeling
A product may only be labeled "compostable" if it meets the ASTM Standard D6400 or Standard D6868 or if the product has an "OK compost HOME certification," which is the certification of conformity with the existing TUV Austria certification. A third-party certification entity approved by CalRecycle must certify that the product meets the ASTM Standard or any other additional standard adopted by CalRecycle.
A product may only be considered "recyclable" if the covered material is of a material type that is (1) collected for recycling by recycling programs that collectively encompass at least 60% of the population of the state and (2) sorted into defined recycling streams by large volume processing facilities that collectively serve at least 60% of the state's recycling programs. To help producers make this determination, CalRecycle will publish a Material Characterization Study that evaluates which material types are actively collected, sorted, and recorded by recycling systems across the state. CalRecycle published the Preliminary Material Characterization Report on December 28, 2023. The Final Report is still pending.
Products made solely of fiber and containing no plastics or polymers, as defined by law, may be exempt from the certification requirement if the producer or PRO maintains detailed documentation demonstrating plastic-free composition and manufacturing processes. PROs must retain this for three years after the product is sold and made available to CalRecycle upon request.
d. Producer Fees
Before approval of an initial PRO plan and for the two years following that approval, the PRO will charge all participant producers a fee based on the covered material category and quantity of covered material supplied in the state. After the two-year period (or earlier if the PRO has sufficient data), the PRO will begin implementing eco-modulated fees as described in the approved plan. The eco-modulated fees consider the type of material, the cost of managing that material at the end of its life, and any associated environmental mitigation costs. Eco-modulated fees are designed to incentivize producers to opt for materials that are easily recyclable and less harmful to the environment.
5. Enforcement
Any failure to satisfy reporting, registration, or other obligations under the law would constitute a violation each day such courses of action persist and for each product that uses non-compliant covered material, regardless of the number of units distributed or sold. The Department will issue a written Notice of Violation and determine whether to request a corrective action plan or impose immediate penalties. Under SB 54, CalRecycle may impose an administrative civil penalty of up to $50,000 per day per violation. Note that while the PRO does not have enforcement authority, it may report non-compliant producers to CalRecycle, which could trigger enforcement actions by the agency.
Opportunities To Participate
CalRecycle is hosting an informal regulatory workshop on Tuesday, May 27, 2025, from 10AM -4 PM(PDT). The purpose of this workshop is to informally consult with the public, the regulated community, and other interested parties to solicit feedback regarding the regulations. More information will be available on the SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act Permanent Regulations rulemaking webpage prior to the meeting. Interested parties can register here.
The Department is currently accepting public comments on the proposed regulations until June 3, 2025. Beveridge & Diamond is actively monitoring developments in this area and is ready to assist interested stakeholders prepare comments on the proposed rules.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
