Extended producer uncertainty: Groundbreaking California packaging law faces setbacks

Two significant developments have recently emerged concerning California’s Extended Producer Responsibility (EPR) law, SB 54, which aims to phase out single-use plastics. The landmark law for packaging and plastic food service ware faces uncertainty and controversy as the March 7, 2025 deadline for finalizing its regulations has passed without action from the governor’s office.

The 2020 law requires producers of packaging materials to design, finance, and implement a system to collect and recycle their products, with the goal of reducing waste, greenhouse gas emissions, and marine pollution. The implementing regulator, CalRecycle, was to submit the full permanent rulemaking package to the Office of Administrative Law by March 7, 2025, but the deadline came and went without action.

Governor Newsom orders review of plastic rules

Instead, Governor Gavin Newsom has directed state regulators to restart the development of rules for implementing SB 54. This decision follows concerns about the costs associated with the law and the need to ensure fair implementation. A CalRecycle representative acknowledged the blown deadline with a nod to cost concerns, stating, “[i]n the coming year, CalRecycle will continue to work with industry, advocates, and other interested parties to develop rules that ensure California’s plastic pollution law balances the need to cut plastic pollution with the importance of minimizing costs to families and small businesses.” Governor Newsom’s directive is intended to “ensure California’s bold recycling law can achieve its goal of cutting plastic pollution and is implemented fairly.” Some in industry have hailed the delay as necessary to ensure that the ultimate regulations are fit for purpose and work for all relevant stakeholders.

Other supporters of SB 54, including environmental groups, local governments, and some lawmakers, have urged Governor Newsom to act swiftly and uphold the law’s original intent and timeline. They argue that state regulators have spent years crafting rules to implement SB 54, which requires industries to ensure their single-use plastics are 100-percent recyclable or eligible to be labeled as compostable by 2032. Advocates say SB 54 is critical to addressing plastic pollution, protecting public health, and fostering a circular economy, and that CalReycle’s rulemaking process has been extensive and transparent. They also warn that any delays or weakening of SB 54 could undermine the broader stakeholder support for EPR across the country, especially given California’s leadership in this field.

The implications of the rulemaking impasse for producers in California are uncertain and potentially significant. Depending on the outcome of Governor Newsom’s decision, producers’ expected obligations under SB 54 could shift. For instance, if Governor Newsom approves the regulations as currently proposed by CalRecycle, producers would have to comply with the requirements to register with the Circular Action Alliance (CAA), pay fees, meet material reduction and circularity targets, and report data related to these obligations. Companies should expect new provisions aimed at reducing compliance costs and ensuring equitable implementation. If Governor Newsom rejects or modifies the regulations, producers could face less stringent or more flexible rules, or a longer transition period. The directive to restart the rulemaking process will likely lead to delayed enforcement of SB 54. If Governor Newsom fails to act, the law could be challenged in court or by a more aggressive ballot initiative, creating more legal and political uncertainty.

Ethics allegation against former CalRecycle director

Governor Newsom’s directive follows other SB 54 news from mid-February, when an anonymous ethics complaint was filed against Rachel Wagoner, the former director of CalRecycle and current Executive Director of the CAA for California. The ethics complaint argues that Wagoner’s new role violates a “switching sides” consulting ban. Wagoner played a pivotal role in overseeing, writing, and promoting SB 54 before transitioning to lead the California efforts of the coalition of plastic and packaging companies that created the CAA. For lawmakers and lobbyists who worked on ensuring the passage of SB 54, Wagoner’s abrupt career shift was unexpected.

The ethics complaint alleges that Wagoner’s new role may conflict with the consulting ban, potentially affecting the law’s implementation. The ethics allegation raises more uncertainty about the future direction of the regulatory framework surrounding SB 54. If the complaint leads to legal action, it could result in further complications and uncertainties for businesses trying to comply with the law.

Key points for companies

These developments highlight the dynamic nature of the regulatory landscape surrounding SB 54. Companies affected by the law are encouraged to closely monitor the situation and be prepared to adapt to potential changes in compliance obligations. Staying informed and proactive in engaging with regulators will be crucial for navigating the evolving requirements of California's landmark EPR law. Covered companies may want to keep the following points in mind:

• Barring further policy announcements, the initial deadline for producers to report data to CAA on the volume of their covered material used in California is still August 31, 2025.


• Implementation in other states remains on track, with initial reporting deadlines of March 31, 2025, in Oregon and July 31, 2025, in Colorado.


• For more information on the status of state EPR legislation, see our most recent alert, State EPR roundup: 2025 compliance deadlines approach as legislative and regulatory frameworks develop.

For further information or assistance with EPR compliance strategies, please contact the DLA Piper Plastics Task Force.