California Plastics Recycling Legislation Significantly Expands Producer Responsibility | Downey LLP Brand

On June 30, 2022, Governor Newsom signed into law SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act (“Act”). The governor’s office described the law as “the most significant overhaul of California plastics and packaging recycling policy in history.” In addition to setting specific plastic reduction and recycling levels for plastic packaging, the bill also provides for the creation of not-for-profit entities, Producer Responsibility Organizations (“PROs”) to ensure the producer compliance. The Act aims to shift ultimate responsibility from consumers to the plastics industry and has significant implications for producers of materials covered by the Act.

Producers of covered material

The Act applies to “producers” of “covered material”. Covered material includes: (1) single-use packaging, i.e., not limited to plastics, which is regularly recycled after the contents have been used, and (2) single-use plastic catering utensils. unique – for example, plates, bowls, utensils, straws, and wrappers coated with plastic or where plastic is intentionally added in the manufacturing process. There are categories of exemptions to covered materials outlined in the law, including beverage containers subject to the Beverage Container Recycling and Waste Reduction Act, packaging for products regulated under the Federal insecticides, fungicides and rodenticides, and medical products, among others. Producers include those who manufacture a product that uses covered materials and those who own or license the brand or trademark under which the product is commercially sold or distributed in California.

Specific reduction and recycling levels

The law requires that producers of covered materials, in accordance with regulations to be adopted by the Department of Recycling and Resource Recovery (“CalRecycle”):

(1) reduce all plastic coated materials in accordance with a plan yet to be developed to achieve a reduction of 25% by weight and 25% by source of plastic components for coated material sold, offered for sale or distributed in California;

(2) ensure that Covered Material offered for sale, distributed, or imported into California can be labeled “compostable” by January 1, 2032; and

(3) ensure that Covered Equipment offered for sale, distributed or imported into California achieves the following recycling rates:

  • At least 30% of the equipment covered from January 1, 2028;
  • At least 40% of the equipment covered from January 1, 2030;
  • At least 65% of equipment covered as of January 1, 2032.

PRO and app

Producers of covered material must also “form and join” a PRO by January 1, 2024. PROs must act on behalf of their approved participating members to: (1) develop source reduction plans to achieve reductions of 25% by weight and 25% by source; (2) assess recycling technologies that will be used to meet recycling requirements; and (3) identify and establish enforceable agreements with participants to collect data to report to CalRecycle and further enforce the law through PRO’s producer responsibility plans. Part of the producer responsibility plans include fee schedules for participants, as PROs will be required to contribute an additional $500 million each year to be deposited in the California Plastic Pollution Mitigation Fund. Failure to participate in a PRO prohibits Producers from selling, offering for sale, importing, or distributing Covered Materials in the State unless certain individual requirements are met for further compliance with the law. Failure to comply with the law may result in CalRecycle imposing civil administrative penalties of up to $50,000 per day per violation.

Environmental justice

As noted above, the law establishes the California Plastic Pollution Mitigation Fund, which aims to distribute the money:

  • 40% to government agencies to monitor and reduce the environmental impacts of plastic pollution; and
  • 60% to the Strategic Growth Council, the California Environmental Protection Agency, the Natural Resources Agency, and the Department of Justice to monitor and mitigate impacts on communities impacted by the public health effects of plastic pollution.

This is consistent with the Biden administration’s increased efforts to prioritize and address environmental justice, which has already been at the forefront of many federal environmental laws.

Impact

The law significantly expands the obligations and potential liabilities of producers of covered material. Entities that fall within the scope of the law should closely monitor the formation and development of PROs and CalRecycle’s upcoming regulations. The comprehensive nature of the law and the potential for severe penalties indicate that the industry could see a significant increase in enforcement actions from CalRecycle.

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About Michael S. Montanez

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