California — which already has some of the most broad-reaching product stewardship and extended product responsibility (EPR) laws in the United States governing products ranging from paint, carpets, and mattresses to pharmaceutical waste — recently passed comprehensive legislation aimed at reducing plastic pollution.
The Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54), signed into law on June 30, 2022, will impose fees and/or regulatory obligations on the following businesses and entities: manufacturers of single-use packaging or plastic single-use service ware; cities, counties, regional agencies, and special districts that provide solid waste collection services; recycling facilities that receive recyclable material for mechanical or manual sorting; solid waste enterprises that provide solid waste handling services for local jurisdictions; exporters, brokers, self-haulers, and transporters of recyclables or compost; and retailers or wholesalers that sell single-use packaging or plastic single-use service ware.
The law targets not only manufacturers but sellers of all goods sold in California, and thus will apply to the owner or licensee of the brand or trademark under which the covered product is sold or otherwise brought into California by distributors or retailers. This would sweep in nearly any company that makes any consumer or commercial goods with single-use packaging or food service ware sold in the state.
Under the law, producers of covered material — defined as certain single-use packaging and plastic single-use food service ware — are required to join a producer responsibility organization (PRO) by January 1, 2024, or be prohibited from selling, offering for sale, importing, or distributing such covered materials in California. These include the following:
Limited exemptions from covered products and materials are provided, including for medical products, devices, and drugs; infant formula, medical food, and certain supplements; pesticides; dangerous goods and hazardous materials; and long-term packaging for storage with a five-year lifespan.
The purpose of such PRO is to implement certain methods of source reduction, collection, processing, and recovering of the covered material through registration, reporting, recordkeeping, and auditing requirements. To accomplish these requirements, the PRO is required to establish and collect fees from member-producers as well as contribute $500 million per year to the California Plastic Pollution Mitigation Fund, contribute $500 million per year to the California Department of Tax and Fee Administration, and pay a “California circular economy administrative fee” to be set by the California Department of Resources Recycling and Recovery (CalRecycle).
The law additionally requires that producers ensure that all covered material “offered for sale, distributed, or imported in or into the state” on or after January 1, 2032, is recyclable or compostable within the state. To incentivize the recycling or composting of such covered material, the law requires that producers ensure that the following percentages of covered material are recycled by the certain corresponding dates: At least 30% of covered material must be recycled beginning January 1, 2028; at least 40% of covered material must be recycled by January 1, 2030; and at least 65% of covered material must be recycled by January 1, 2032. Producers must also achieve certain percentages of net source reductions for their products as well as comply with reporting and recordkeeping requirements related to annual sales, recycling, composting, and source reduction data.
Outside of the requirements for producers of covered materials, the law imposes the creation of state-mandated local recycling programs by requiring local jurisdictions and recycling service providers to include covered material in their collection and recycling programs. Disposal facility operators are required to report information to CalReycle on disposal tonnages by jurisdiction that are disposed of at each disposal facility, while recycling and composting operations and facilities must submit information on types and quantities of materials disposed of, sold, or transferred to other facilities, end users, or exporters, brokers, or transporters inside or outside of California. Similarly, exporters, brokers, self-haulers, and transporters of recyclables or compost must also submit information to CalRecycle concerning the types, quantities, and destination of the materials that they handle.
Relationship to International Waste Regulation Efforts
SB 54 builds upon previous plastics waste related policies and agreements, including some international.
In 2018, the European Union (EU) adopted a plastics strategy that aims to reduce plastics-related waste, improve recyclability of plastics, incentivize innovation, and devise global solutions through the development of international standards on plastics. As part of the EU’s plastics strategy, the EU adopted a directive on single-use plastics in 2019 that took effect on July 2, 2021. The directive prohibits certain single-use plastic products from being placed on the EU market, including but not limited to plastic cutlery, plates, straws, and beverage stirrers. Like SB 54, the directive establishes certain collection and recycling targets for types of plastic products as well as extended producer responsibility requirements. This fall, the EU is expected to announce proposals for several new plastics regulations, including on microplastics.
Similar efforts to regulate plastics and enact extended producer responsibility have taken place in the United Kingdom.
The Basel Convention, a multilateral environmental agreement first established in 1988 that has 189 parties, establishes certain requirements for the transboundary movement of hazardous waste, solid waste, and municipal incinerator ash. These requirements include provisions for packaging, labeling, and transportation of covered material, including certain plastic wastes, and prohibits a party from exporting waste unless the exporting country does not have sufficient disposal of recycling capacity either at all or that can manage the waste in an environmentally sound manner or unless the wastes are required as a raw material for recycling or recovering industries in the importing country.
In March 2020, the United Nations launched the negotiation of a new binding international treaty to tackle plastics pollution, with a mandate to establish international rules to address the whole of the plastics supply chain. The U.S. Department of State has expressed support for the treaty. The goal is to conclude a new treaty by 2024.
But for now, California’s SB 54 is one of the most comprehensive plastics-related legislations to have passed. It is expected that other states, nations, and international organizations may look to California as a model. While product stewardship and EPR laws first began to gain traction in the mid-1990s, wide-scale adoption of such requirements is expected to increase significantly over the next few years. It is vital for industries subject or potentially subject to such requirements to keep informed about new developments and ensure that they are able to comply with any new directives imposed.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.
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