California’s next step in implementing landmark plastic pollution law focuses on single-use plastic packaging

The June 2022 passage of SB 54, California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act, was a milestone in the state’s leading efforts to address plastic waste. On March 15, 2024, the state took its next step in implementing that broad and complex law, unveiling draft regulations aimed at curbing single-use plastic waste within the state. 

Importantly, the regulations would place significant and specific requirements on plastic packaging producers to enhance design and create end markets for recycled material, with penalties for noncompliance. As incentives, the regulations would offer $55 million in grants for companies pursuing these aims.

SB 54: Background and overview

SB 54 is the keystone of California’s bid to lead in the global movement to reduce plastic waste and enhance recycling. It comes as momentum grows for an international treaty to curb plastic pollution, setting ambitious goals for reducing single-use plastic waste and improving recyclability and compostability of packaging and foodware by 2032. This legislation is part of California’s larger move toward laws supporting a circular economy, where product and material lifecycles are extended through design improvements and recycling initiatives, reducing the amount of waste that ends up in landfills.

SB 54 mandates a 25-percent reduction in single-use plastic packaging and foodware, aiming to achieve a recycling rate of 65 percent for these materials. It also requires all single-use packaging and plastic foodware to be recyclable or compostable, as defined by California law, by 2032. This law is seen as one of the most comprehensive and stringent of its kind in the US.

Financial responsibility for implementing these changes falls largely on product and packaging producers. SB 54 requires producers to spend $5 billion over ten years to be used, among other things, to support affected communities, including low-income and rural communities, and restore ecosystems affected by plastic pollution. This funding will also support the establishment of a private-party Producer Responsibility Organization (PRO) to oversee collection and recycling efforts necessary to meet the law’s targets. 

New draft regulations would create obligations and incentives to innovate

The draft regulations develop more specific requirements for the PRO by establishing a producer responsibility system for packaging materials. This involves shifting the economic responsibility for waste management from public entities to producers, with the aim of incentivizing reduced packaging waste and enhanced recyclability. Under the proposed regulations, producers would be required to:

• Engineer products and packaging for enhanced recyclability or composability
  
  
• Fund recycling and recovery systems, and annually disclose production, recycling, and disposal amounts
  
  
• Eliminate particular components, inks, adhesives, and labels that hinder the recycling process
  
  
• Implement design guidelines to guarantee that all packaging elements align with existing recycling technologies

If adopted as currently drafted, the rules will require producers to ensure that a viable end market exists for their packaging materials when recycled, such as facilities that can process and repurpose the recycled output effectively. This would include establishing and maintaining systems for collecting the materials for post-consumer use. The draft regulations set recycling rates that must be met to ensure a substantial reduction in waste. Local jurisdictions and independent producers not part of a PRO would face similar requirements. Producers would have to fund these initiatives in proportion to their market share and the type of materials they produce.

Producers who fail to comply with these requirements would face civil penalties including mandated corrective actions, fines up to $50,000 per day of violation, and additional reporting requirements. 

In addition to these mandatory proposals, CalRecycle plans to award $55 million in grants to support related technology solutions and workforce development. Companies interested in pursuing these grants are encouraged to monitor CalRecycle’s website for additional information regarding the grant competitions, including with respect to the specific types of recycling technologies that CalRecycle intends to fund. State-level grant competitions often have eligibility requirements that may limit the pool of potential awardees, as well as requirements that are not typically found in private grants or commercial contracts.  Applicants should thus carefully consider the requirements before applying.

Businesses making or using plastic packaging are encouraged to pay close attention to California’s SB 54, both for its impact on California commerce and because it may serve as a reference point and a model for other states and countries looking to curb plastic pollution and implement a circular economy, depending on the law’s success. Achieving these goals will likely require collaboration by governments, industry, and environmental organizations, making stakeholder engagement an important step to success.

CalRecycle will hold a hybrid public hearing on April 23, 2024. Interested parties are encouraged to participate in the rulemaking process and submit comments to CalRecycle until May 8, 2024.

For further guidance on navigating these regulatory changes and implementing sustainable packaging solutions, please contact any of the authors or your DLA Piper relationship attorney.