Responding to concerns about the cost and workability of draft plastic recycling regulations, Governor Gavin Newsom directed CalRecycle to redo the rules and the agency complied earlier this month.
The draft rules, originally issued by CalRecycle on December 2, 2024, implement SB 54, the 2022 legislation creating California’s first extended producer responsibility program for single-use packaging.
The bill directed producers to achieve ambitious recyclability, recycling and source reduction targets by 2032. The law requires a 25% reduction in the use of single-use plastic packaging and food ware, with 65% of those plastics being recycled and 100% being recyclable or compostable.
Since SB 54 was signed, stakeholder groups, including the California Chamber of Commerce, have worked together to identify the best way to implement the law.
CalRecycle’s decision to hold the regulations is “a prudent one that provides the necessary time and attention to ensure regulations related to SB 54 are implemented in a thoughtful and cost-effective manner,” the CalChamber said in a statement released on March 7.
For more than three years, industry leaders have worked tirelessly to ensure that pocketbooks of consumers are protected and that businesses can rightly adapt to the new law.
Another looming requirement is for a producer responsibility organization (PRO) to begin paying an annual $500 million surcharge starting in 2027 to be deposited into a state account to be used for mitigating the environmental impacts of plastics.
Coalition Concerns
In a December 14, 2024 letter to Governor Newsom, a CalChamber-led coalition of more than 36 groups expressed concern that CalRecycle’s draft rules would fail to position the state to achieve a successful circular economy.
The broad-based coalition included representatives of agriculture, builders, restaurants, retailers, manufacturers, food producers, packaging, personal care products, restaurants, grocers, chemical companies and more.
The goals of SB 54 “will be complex to achieve and will require new innovations in technology as well as creative and flexible solutions to create a successful system” the letter stated.
Among the significant policy and legal flaws the groups identified in the draft regulations were provisions providing “prescriptive requirements more akin to command-and-control regulations than EPR [extended producer responsibility] regulations.”
The draft rules didn’t provide the balance of guidance and flexibility to allow the producer responsibility organization to work with its members and producers to build and invest in a system that will be implementable nor would the requirements achieve the law’s objective of creating a circular economy.
Examples of the concerns raised in the letter include:
- A true cost to consumers several multiples greater than the estimated amount in CalRecycle’s economic impact analysis, which found $36.3 billion in direct costs.
- Significant barriers to the necessary technological innovation sought by SB 54.
- Conflict with federal and regulatory requirements governing food safety packaging for agricultural producers and the food industry.
- Possible conflicts with federal law and European Union requirements for drug manufacturing and medical device approvals.
- CalChamber Position
CalChamber remains committed to working with stakeholders as SB 54 implementation continues to advance. We look forward to quickly resolving a number of outstanding issues through an expedited regulatory process as California moves towards the 2027 compliance deadline.
The next steps in this process must focus on lowering pricing and taxes for Californians at a time when the daily cost of living remains their top priority.
