California EPR Compliance: What Packaging Producers Need to Know About SB 54

If your company sells packaged products into California, SB 54 may create new compliance obligations.

California’s Extended Producer Responsibility (EPR) laws, commonly known as SB 54, require certain packaging and single-use plastic food serviceware producers to participate in the state’s producer responsibility program.

The law shifts the cost of managing covered materials from local governments and taxpayers to producers and establishes long-term recycling, source-reduction, and recyclability targets.

What Is California’s SB 54 Law?

California’s EPR law was established through SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, which created a statewide framework for managing covered packaging and single-use plastic food serviceware.

The program is overseen by CalRecycle and administered through an approved Producer Responsibility Organization (PRO), currently the Circular Action Alliance (CAA).

Under this model, obligated producers fund and participate in the collection, processing, recycling, and management of covered materials. Unlike programs focused primarily on producer registration and reporting, SB 54 also sets phased targets for source reduction, recycling, and recyclability or composability.

The California EPR program aims to:

• Reduce packaging waste and plastic pollution
• Increase recycling and composting rates
• Improve statewide recycling infrastructure
• Shift waste management costs to producers
• Increase packaging circularity
• Encourage sustainable packaging design

California’s SB 54 Performance Targets

California’s requirements include several phased targets rather than a single 2032 deadline:

Deadline	Target
January 1, 2027	Reduce covered single-use plastic by 10%
January 1, 2028	Recycle 30% of covered single-use plastic packaging and food serviceware
January 1, 2030	Reduce covered single-use plastic by 20% and recycle 40%
January 1, 2032	Reduce covered single-use plastic by 25%, recycle 65%, and ensure covered packaging is recyclable or compostable

These targets apply to the applicable categories identified under SB 54. The 65% recycling target doesn’t apply to every type of covered material.

Do I Need to Comply With California SB 54?

If your company sells packaged products into California, the first step is determining whether you are a producer under SB 54. The law assigns responsibility in three tiers:

Tier 1: Manufacturer That Owns or Licenses the Brand

The producer is generally the company that manufactures the product and owns or licenses the brand under which it is sold.

Tier 2: Brand Owner

If no Tier 1 producer exists, responsibility generally shifts to the brand owner or exclusive licensee.

Tier 3: Seller, Distributor, or Importer

If no company qualifies under Tier 1 or Tier 2, responsibility typically falls to the entity that sells, distributes, or imports the product into California.

Important: A company may be the producer for some products but not others. Producer status is determined on a product-by-product basis.

Do You Have SB 54 Exemptions Available?

California recognizes several exemptions and exclusions under its packaging EPR program. CalRecycle maintains guidance regarding exempt entities, excluded materials, and other statutory exemptions.

A company should not assume that its entire product portfolio is exempt because one entity, product or packaging component, qualifies for an exemption or exclusion.

Exemption / Exclusion	Key Requirement
Small Producer Exemption	Less than $1 million in annual gross sales and approval through Packaging Extended Producer Responsibility System (PEPRS)
Agricultural Commodity Exclusion	Commodity is grown, harvested, and packaged at the production site
De Minimis Components	Component meets CalRecycle criteria and appears in the de minimis database
High-Recycling-Rate Exclusions	Material satisfies recycling-rate and other regulatory requirements

Because exemption eligibility can depend on revenue thresholds, packaging volumes, material composition, and corporate structure, organizations should carefully evaluate current requirements before assuming they qualify for an exemption.

What Happens If You Determine You Must Comply With SB 54?

Determining that your company is an obligated producer is only the beginning. Most organizations will need to establish a process for managing registration, packaging data, reporting obligations, fees, and evolving program requirements.

For many companies, SB 54 compliance becomes a cross-functional effort involving sustainability, packaging, procurement, operations, legal, finance, and tax stakeholders.

Step 1: Select and Complete the Appropriate Compliance Path

The final SB 54 regulations took effect May 1, 2026. Existing producers were required to address initial registration and participation requirements during the 2026 implementation period.

An obligated producer generally must pursue one of the following applicable pathways:

1. Apply to participate in the Circular Action Alliance’s PRO plan
2. Apply to comply as an independent producer and obtain CalRecycle approval
3. Apply for a small-producer exemption, if eligible

Independent compliance is not available simply because a producer prefers to report directly. An independent producer must meet applicable qualification requirements and obtain approval for its individual compliance plan.

CAA can manage registration, reporting, and certain exemption or exclusion submissions on behalf of producers participating in its plan. Producers participating through CAA may elect to self-report where permitted, while independent producers report directly through PEPRS.

Companies that began selling, importing, distributing or branding covered products after the initial registration period should review the current regulations and CalRecycle guidance to determine their registration deadline.

Step 2: Collect and Submit Required Packaging Data

One of the first major compliance requirements under SB 54 was the submission of packaging data used to establish program baselines and future fee calculations. Producers were required to submit packaging information during 2026 implementation activities, and maintaining accurate packaging data will remain critical as California’s EPR program evolves.

Organizations should establish processes to track:

• Packaging weights
• Material categories
• Packaging formats
• Units supplied into California
• Recycled content information
• Packaging composition details

Companies should also document how they determined producer responsibility and which products, materials, and legal entities were included in their analysis. Without a documented methodology, correcting historical reporting or responding to a regulatory inquiry may require significant retrospective work.

Step 3: Prepare for Producer Fees Beginning in 2027

Beginning in 2027, obligated producers will face funding obligations associated with California’s EPR program. These may include fees administered through CAA as well as applicable contributions to the separate Plastic Pollution Mitigation Fund.

Because program details and fee structures continue to develop, producers should monitor current CAA and CalRecycle guidance rather than rely on preliminary estimates or assume that fees will be allocated using a single factor.

Step 4: Prepare for California’s Phased Packaging Targets

Meeting SB 54’s long-term requirements may require manufacturers and brand owners to:

• Evaluate packaging materials
• Increase recyclable packaging formats
• Reduce covered plastic usage
• Improve packaging design
• Work with suppliers to obtain packaging data
• Align sustainability and compliance initiatives

Because packaging redesigns often take years to implement, many companies are beginning these efforts well before the 2032 targets

What Happens If You Don’t Comply With California’s SB 54 Law?

Failure to comply with SB 54 can create both regulatory and operational risks for obligated producers.

CalRecycle may issue notices of violation to producers that fail to meet registration, reporting, participation, recordkeeping, or fee obligations. If violations are not addressed, administrative civil penalties can reach $50,000 per day, per violation.

In some cases, CalRecycle may allow producers to submit a corrective action plan before assessing penalties. The agency also considers factors such as the producer’s size, compliance history, economic condition, and whether the violation was intentional when determining enforcement outcomes.

Beyond potential penalties, noncompliance can be costly and time-consuming. Companies may need to reconstruct packaging data, review supplier records, reassess producer obligations, correct prior submissions, and dedicate significant internal resources to remediation efforts. For organizations with large product portfolios, gathering this information after the fact can be far more difficult than establishing compliance processes upfront.

Potential Consequences of Noncompliance

• Notices of violation from CalRecycle
• Corrective action requirements
• Administrative civil penalties of up to $50,000 per day, per violation
• Additional reporting or remediation obligations
• Increased internal compliance and administrative costs

Good to know: Penalties generally don’t begin accruing until 30 calendar days after a producer receives notice of a violation, providing an opportunity to address compliance issues before fines are imposed. CalRecycle may also allow a corrective action plan in certain situations.

How California EPR Compliance Becomes Complex

Most companies already know California’s law exists. The challenge is operationalizing compliance.

Scattered data: Packaging specifications may live with suppliers, while sales data sits in ERP systems and ownership decisions reside with legal teams.

Multi-state obligations: California is only one of several states implementing packaging EPR programs.

Long-term performance requirements: Companies must plan for packaging redesign, recyclability targets, and source reduction goals.

Changing regulations: CalRecycle continues issuing guidance, regulations, and implementation updates.

Key-person dependency: When compliance knowledge remains with one employee or department, organizations create unnecessary risk.

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This analysis is intended for informational purposes only and is not tax advice.  For tax advice, consult your tax adviser. See the full disclaimer here.