California SB 54

What Is SB 54?

 

SB 54, formally the Plastic Pollution Prevention and Packaging Producer Responsibility Act, is California’s landmark law passed on June 30, 2022, designed to reshape how single-use packaging and plastic food service ware are produced, managed, and disposed. 

The law aims to shift responsibility for packaging waste from taxpayers and municipalities onto the producers (brands, manufacturers, importers) themselves, thereby driving design, reuse, recycling, and overall waste reduction. 

At its core, SB 54 sets out several ambitious goals to be met by 2032:

  • 100% of single-use packaging and plastic foodware sold in California must be recyclable or compostableby 2032. 

  • 65% recycling rate for plastic packaging and food service ware by 2032. 

  • 25% reduction in the mass or component count of single-use packaging relative to 2023 levels (through elimination, reuse, or redesign). 

 

It is material-agnostic — it doesn’t only regulate plastics. SB 54 applies to all single-use packaging materials (plastic, paper, metal, glass, multi-material, etc.) and single-use plastic food service ware (like cups, lids, utensils, trays, wrappers). 

However, certain categories are specifically excluded/exempted under the law, such as packaging for medical devices or regulated pharmaceuticals, infant formula containers, hazardous goods, durable packaging held for long-term use, and others. 

 

Regulatory Implementation & Rulemaking

 

Passing a law is one thing; making it operational is harder. SB 54 mandates that CalRecycle (California’s agency for recycling and waste management) adopt permanent regulations to define how obligations work in practice. 

Timeline, Delays & Reset

 

Originally, CalRecycle was expected to finalize implementing regulations by March 8, 2025.  But due to significant pushback, cost concerns, stakeholder feedback, and political pressure, Governor Newsom directed CalRecycle to restart rulemaking in March 2025 instead of locking in the earlier drafts. 

This regulatory reset means that while the statute’s deadlines and goals still stand, how the rules are applied may change — definitions, fees, exemptions, and compliance burdens might shift. 

In May 2025, CalRecycle released revised draft regulations that aim to clarify producer obligations, simplify pathways, and respond to industry concerns.  These include:

  • Revised definitions separating packaging vs. food service ware

  • Extended exemption periods for difficult-to-comply materials

  • Adjusted fee structures and compliance paths

  • Emphasis on transparency, record-keeping, and flexibility over rigid tracking or audits in some areas 

 

While these shifts are meant to reduce burden and uncertainty, they also introduce another layer of change risk for businesses preparing for compliance.

 

Key Components & Obligations

 

Producer Responsibility & PRO Model

 

Rather than each producer going it alone, SB 54 envisions a Producer Responsibility Organization (PRO) that pools administrative and operational tasks across many producers. 

CalRecycle selected the Circular Action Alliance (CAA) as the state’s inaugural (and single) PRO for SB 54.  The PRO is responsible for coordination, reporting frameworks, compliance, funding, and management of recycling/recovery programs on behalf of producers. 

Producers of covered materials must join the PRO (or in limited cases, act independently if allowed), pay into the system (via fees or contributions), and comply with data reporting, recordkeeping, transparency, and other oversight defined by regulation. 

Covered Materials, Definitions & Scope

 

A critical task is to precisely define what counts as “covered material.” SB 54’s statute defines “covered material” under Public Resources Code § 42061(e) to include:

  • Single-use packaging — materials used for containment, protection, handling, delivery, or presentation (primary, secondary, tertiary packaging). 

  • Plastic single-use food service ware — items like trays, bowls, lids, utensils, stirrers, straws, wrappers, etc. 

 

Regulations further refine these definitions, set thresholds, define exclusions, and delineate responsibilities in the supply chain.  For example: reuse/refillable packaging may be exempt if it meets certain criteria, and definitions of “producer” shift based on manufacturing or brand ownership in California. 

Financial Obligations & Eco-Modulated Fees

 

To fund this system, SB 54 requires producers (through the PRO) to generate approximately $5 billion over 10 years— equivalent to $500 million annually starting in 2027. 

Fee structures are to be eco-modulated — meaning costs are varied based on product design, recyclability, material choice, etc. High-waste, harder-to-recycle designs should incur higher fees. 

Exemptions and phased implementations are expected in early regulation drafts to ease the burden on producers of challenging materials. 

Reporting, Recordkeeping & Compliance

 

Producers must maintain detailed records (contracts, suppliers, recycling arrangements, material flows) and submit reports according to regulatory schedules.  Audit rights and enforcement are built in — failure to comply may lead to corrective action plans or penalties. 

The regulatory drafts emphasize transparency, data governance, and accountability over brute-force monitoring. 

 

Business Implications & Risks

 

SB 54 is not just environmental policy — for many companies, it’s a strategic risk and opportunity driver.

Who Is Obligated?

 

  • The law typically holds the manufacturer accountable if they operate in California or have exclusive brand licensing. 

  • If the manufacturer is out-of-state, the California brand owner/importer may be obligated. 

  • If neither exists in CA, an in-state licensee may become responsible. 

 

Understanding contractual relationships with suppliers and licensees is therefore essential.

Data & Systems Overhaul

 

If your packaging and compliance data are fragmented, incomplete, or inconsistent, full SB 54 compliance will be extremely difficult. You’ll need:

  • Structured, governed specifications

  • Traceability across materials, suppliers, and SKUs

  • Version control, change tracking, and audit readiness

  • Integration between your spec system, ERP, compliance tools, and data warehouses

 

Lack of this infrastructure could result in missed deadlines, non-compliance, or penalties.

Cost & EPR Burden

 

You’ll face new costs: PRO fees, administrative overhead, potential redesign, audits, etc. Regulatory uncertainties (because rules are still evolving) make those projections difficult. 

Non-compliance could trigger penalties, corrective action plans, or reputational risk. 

Innovation & Competitive Edge

 

Companies that get ahead of SB 54 may turn this into a competitive advantage:

  • Sustainable packaging sells well with consumers

  • Early compliance and design-for-reuse capabilities reduce future retrofit costs

  • Strong data and compliance systems can be reused for other states or EPR laws

 

 

Recent Developments & Adjustments

 

A few key recent shifts to watch:

  • Regulatory Reset: Governor Newsom’s decision to restart rulemaking (March 2025) introduces uncertainty but also opportunity for stakeholder feedback. 

  • Revised Draft (May 2025): CalRecycle’s new draft regulations aim for clarity, exemptions, and flexibility compared to prior, more rigid drafts. 

  • Producer Responsibility Organization (PRO) Established: CAA was selected as California’s PRO to manage obligations on behalf of producers. 

  • Industry Pushback & Course Correction: Financial cost estimates and stakeholder pressure (especially from small businesses) contributed to rule delays and planned revisions. 

 

These developments underscore that SB 54 is still a moving target — compliance planning must be adaptive.

 

What You Should Be Doing Now (A Roadmap)

 

Given regulatory uncertainty but fixed statutory goals, here’s how to act strategically now:

  1. Data & Process Audit

    Map where your packaging data is stored, how complete it is, where gaps exist (e.g. PCR content, recyclability assessments).

  2. Portfolio Segmentation

    Classify your SKUs according to potential “covered materials” and expected compliance difficulty.

  3. Perform Pilot Runs

    Select a small subset of SKUs, simulate SB 54 reporting, and find where data errors or mismatches occur.

  4. Engage Suppliers & Partners

    Get critical inputs (resin data, component breakdowns, testing reports) from your upstream sources now.

  5. Design for Reuse & Compostability

    Start packaging R&D for reusable, refillable, or compostable designs.

  6. Stay Active in Rulemaking

    Submit feedback to CalRecycle’s draft regulations, attend advisory board sessions, and track proposed changes. 

  7. Model Costs and Scenarios

    Based on your pilot results, estimate fee exposure, compliance costs, and redesign investments.

  8. Build or Adapt Infrastructure

    If you have a specification/data management system, upgrade to support versioning, audit tracking, export capabilities, APIs, and compliance reporting modules.

 

 

Final Thoughts

 

California’s SB 54 is ambitious, imposing, and — above all — a test case for how seriously a major U.S. state is willing to hold producers accountable for packaging waste. It blends design incentives, financial responsibility, and regulatory oversight into one program.

But it’s also fluid and evolving — the rules aren’t locked, many details remain open, and implementation is navigating pushback, business costs, and technical complexity.

For businesses affected (especially those selling goods into California), SB 54 isn’t a distant threat — it’s a present challenge. The window to prepare is now.

If you approach SB 54 not just as a compliance burden, but as a signal to upgrade your packaging data, governance, and lifecycle thinking, you can turn this regulatory wave into a strategic advantage.

If you want, I can help you draft a client-facing one-pager or roadmap chart summarizing what readiness looks like today. Want me to put that together next?