The Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54) shifts plastic pollution responsibilities in California from consumers to producers. The law's objective is to reduce plastic material in the state incrementally by 2032. Although CalRecycle is in the process of developing the specific requirements, it is important that manufacturers, brand owners and other entities doing business in California are aware of this new law. It is likely to have far reaching impacts on many consumer products companies by assessing user fees and new recycling requirements on the types of plastic packaging sold in California.
Materials Covered by the Law
SB 54 applies to single-use packaging that is routinely recycled, disposed of or discarded after its contents have been used or unpackaged. This includes items that are typically not refilled or otherwise reused by the producer. It also includes plastic single-use food service ware.
Goals of SB 54
In order to comply with the law's requirements, plastic producers should meet the following objectives:
- Reduce the overall amount of plastic material (including products packaged in such material) in California by 10% by 2027, 20% by 2030 and 25% by 2032. Methods of reduction may include shifting current materials to reusable/refillable alternatives or eliminating unnecessary packaging or components of packaging.
- Ensure that all material covered by SB 54 (broader than just plastic) in the state is recyclable or compostable by 2032.
- Achieve the following recycling rates for all plastic material
in the state:a. No less than 30% by January 1, 2028b. No less than
40% by January 1, 2030c. No less than 65% by January 1,
i. *In 2021, only 5% of postconsumer plastic waste in the United States was recycled.
These objectives require "producers" (explained below) to move away from their current plastic packaging and single-use plastic.
Who Is Affected?
The law defines producers broadly, implicating brand owners and those participating in the manufacturing, advertising, distribution or sale of a plastic-containing consumer product in California. There are specific exemptions for small businesses; human and animal medical products (e.g., drugs, pharmaceuticals and medical devices); infant formulas; medical foods; prescription supplements; FIFRA-regulated products; beverage containers; packaging used to contain and ship dangerous or hazardous goods; and goods packaged for long-term storage (i.e., five years or more). Ultimately, the responsible producer is a fact-specific inquiry that evaluates the various parties involved in the production and promotion of a relevant product.
What's a PRO?
The law requires producers to join a producer responsibility organization (PRO) by January 1, 2024. A PRO is a nonprofit entity responsible for ensuring its members comply with SB 54. PROs must submit a plan to CalRecycle, outlining the steps their members will take to achieve the plastic reduction targets set forth in the law. CalRecycle is responsible for reviewing and approving these plans, which are reassessed every five years. Producers may comply individually without joining a PRO, but only if they can demonstrate a recycling rate of at least 65% in the three years prior to January 1, 2027, and a recycling rate at or above 70% annually thereafter.
PRO Plan and Budget Process
PROs must submit a proposed plan and budget to CalRecycle's advisory board for review and comment. The advisory board has 60 days to provide written feedback, along with any public comments. A PRO may then incorporate these comments into its plan. The plan should include the following components (among others):
- Actions and investments taken by the PRO to meet the law's requirements
- A source reduction plan (including a timeline and actions to discontinue use)
- Technologies and means used to achieve recycling requirements
- Objective and measurable criteria regarding the economics of collecting, processing, recycling, composting, sorting and segregating materials—leveraging existing collection programs when possible
- Use of solid waste collection programs and facilities for curbside collection and processing
- Maintenance of existing franchise agreements
- How material will be collected, processed, managed, recycled, remanufactured or composted consistent with the goals outlined in the law
- Arrangements with processors or recyclers, including investments made to cover the cost of materials being processed or recycled
- Arrangements to establish and fund reuse or refill infrastructure, facility retrofits or other necessary infrastructure to comply with the goals outlined in the law
- How postconsumer recycled (PCR) content will be incorporated into the covered materials (including the amounts of PCR content)
- How the plan will be implemented to achieve the reduction targets over time
- Plans for education, outreach, etc.
The plan should include a fee structure and schedule that the PRO will use to collect fees from producers that participate in the approved plan. The PRO is required to submit an annual report and budget that describes how the PRO and each of its participating producers are implementing the approved plan and complying with the requirements of the law.
Failure to comply with SB 54 could result in civil penalties up to $50,000 per day, per violation. Accruals for such penalties begin 30 days after notification of the violation.
Consumer product companies should continue to monitor the developments associated with SB 54. Notably, CalRecycle will be hosting an informal public workshop about SB 54 on May 31, 2023. Interested parties may attend in person or over webcast.
McDermott Will & Emery law clerk Olivia Kaufmann also contributed to this On the Subject.
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.