California has a long history of passing laws regulating plastic packaging, dating back to the Rigid Plastic Packaging Containers Act in 1991, a law that many manufacturers only learn about when they receive notice from the California Department of Resources Recycling and Recovery (“CalRecycle”). . Over the past year, there have been some notable additions that manufacturers, importers, distributors, or retailers whose products are sold in California should be aware. These are not limited to the plastic used in packaging, but it is a major focus.
SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, was signed into law by Governor Newsom in late June. In the face of declining recycling levels due to a lack of markets for recovered materials, SB 54 establishes a “producer responsibility” model, intended to place the burden of collection, treatment and recycling on those who manufacture and sell plastic packaging and products.
This ambitious law applies to “producers” of “covered materials”, defined as single-use packaging and single-use plastic catering items. A “producer” includes any person who manufactures a product that uses a covered material and who owns the license or trademark for such product sold, distributed or used in California. It may also include the exclusive licensee of the mark in the state, or the distributor or retailer of the product in or in the state. Although the law exempts producers, retailers, or wholesalers who had less than $1 million in gross sales in the state in the most recent calendar year, which is intended to mitigate the impact on small businesses, even they will be required to take out insurance after 1 January. , 2032 that all covered material sold as-is is recyclable or compostable.
SB 54 sets aggressive recycling targets of at least 30% by 2028, 40% by 2030, and 65% by 2032. The law also prohibits expanded polystyrene food containers because they cannot be sold in California unless recycling rates of at least 25% are achieved by 2025, with goals increasing over time. Given the very low recycling rates of this material, it seems unlikely that these objectives can be achieved.
SB 54 requires producers of covered material to form and join a single statewide “producer responsibility organization” by January 1, 2024. Although the law theoretically allows producers to avoid the PRO but to comply with the law by other means, these are narrowly defined. circumstances would be difficult to respect.
Among other things, the PRO will be responsible for developing a plan and meeting the aggressive recycling targets established by law. This is going to be a major and costly undertaking for producers of covered products, all of which will be subject to CalRecycle’s approval.
The law requires the PRO to collect royalties from producers who join together to fund the major work needed to meet recycling targets. PRO is also required to pay $500 million to the state each year to be deposited into a new California Plastic Pollution Mitigation Fund, which will be used by the state to pay for mitigation efforts such as the cleaning up plastic waste. The PRO must also establish a dues system which, in essence, will impose penalties on members who do not meet their financial obligations. In addition, the PRO must report delinquent members to the state, which can prosecute and levy fines of up to $50,000 per day in addition to fees assessed by the PRO.
CalRecycle is required to enact regulations to implement the new law by January 1, 2025, so further details will emerge on important issues such as a fuller definition of covered material and who is a producer. Unfortunately, the time frame for producers to train and join the PRO is one year before the regulations need to be published, so there will be considerable confusion even as the PRO needs to be formed.
This new law is in addition to SB 343, enacted last fall, which prohibits the sale of a product bearing the “hunting arrows” recycling symbol or otherwise indicating that the product or packaging is recyclable unless the programs recyclers only actually process the material in areas that serve at least 60% of the state’s population. Putting the recycling symbol on material that does not meet this standard will be considered a misleading or misleading statement. A separate bill, AB 1201, created similar restrictions on what can be labeled as “compostable” or “biodegradable.” CalRecycle also has a responsibility to implement these two new laws, including collecting and providing information to the public regarding which materials are, in fact, recyclable in the state. An already exhausted agency must juggle many new and complex responsibilities.
Manufacturers, distributors, and retailers selling in California should familiarize themselves with several new laws as they come into effect over the next few years. As always, developing a regulatory compliance strategy when dealing with state law that does not comply with federal or other state laws poses significant challenges.