Key Takeaways
- Effective January 1, 2026, products must meet far more stringent requirements to be labeled as "compostable" or "home compostable."
- Most packaging currently labeled as compostable is not compliant with the Compostable Product Standards Act.
- While there is potential for an extension of the compliance deadline, companies should consider what AB 1201 means for their packaging and labeling practices.
California's AB 1201 (Compostable Product Standards Act) introduces some of the nation's most stringent requirements for compostable labeling, effective January 1, 2026. Under the new law, any product labeled as "compostable" or "home compostable" in California must qualify as an allowable agricultural organic input under the U.S. Department of Agriculture's National Organic Program (NOP). At present, the NOP only recognizes unprinted, virgin paper as an allowable input, meaning that most compostable and biodegradable plastics and packaging are excluded. The law is also designed to keep harmful chemicals, such as PFAS (also known as "forever chemicals"), out of California's compost stream, further tightening compliance requirements for producers. These standards are part of a broader regulatory push, aligning with California's SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, which mandates that by 2032, all single-use plastic in California must be either "recyclable" or "compostable" as defined by state law.
This regulatory landscape presents significant challenges for companies relying on compostable packaging. As highlighted in a recent industry article from Resource Recycling, "Producers are concerned about the looming 2026 deadline, as most compostable packaging currently on the market would not qualify under the existing NOP rules. Industry groups are urging both state and federal regulators to provide clarity and flexibility." The Biodegradable Products Institute (BPI) petitioned the NOP in August 2023 to expand the definition of "compost" to include compostable plastics. The petition was referred to the National Organic Standards Board, which has not yet issued final recommendations as of May 2025. The matter remains under review, and additional delays are expected, in part due to the recent change in the federal administration.
Recognizing the uncertainty, AB 1201 provides a potential five-year extension for products that are, or are likely to soon be, included as allowable organic inputs under federal law. BPI has formally requested such an extension from CalRecycle, citing the ongoing federal review process. However, approval of this extension is not guaranteed and will depend on the outcome of federal regulatory proceedings. Companies should be aware that, unless federal definitions change, most compostable plastics and packaging will not be eligible for "compostable" labeling in California as of January 1, 2026
What This Means for Companies
- Most compostable plastics and packaging will not be eligible for "compostable" labeling in California as of January 1, 2026, unless federal definitions change.
- It is critical to monitor federal and state regulatory developments closely and consider contingency plans for packaging and labeling.
- While there is potential for a five-year extension, this is not guaranteed.
Recommended Next Steps
- Evaluate current and planned packaging for compliance with AB 1201 and NOP requirements.
- Consider developing alternative labeling and packaging strategies in case federal definitions do not change in time.
- Stay engaged with industry groups and monitor regulatory updates to help ensure the business is positioned to respond quickly to any changes.
- Given the increasing scrutiny and potential for litigation under California's AB 1201, develop a litigation response protocol, including identifying key personnel and outside counsel, to ensure a prompt and coordinated defense if a claim is asserted.
- Maintain robust documentation, and keep detailed records of all certifications, laboratory test results, and third-party verifications that substantiate compostability claims. This documentation should be readily accessible in the event of a challenge.
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.
