(The Center Square) - California producers using non-recyclable packaging are set to be billed in August with preliminary invoices, which are expected to lead to higher grocery and product prices in stores.
Calrecycle, the state agency managing recycling and waste reduction, estimates households will face increased costs of up to $190 per year.
"If you're living paycheck to paycheck, you don't have an extra $190," Wayne Winegarden, a senior fellow in business and economics at Pacific Research Institute, told The Center Square Tuesday during an interview.
Senate Bill 54, also known as the Plastic Pollution Prevention and Packaging Producer Responsibility Act, aims to hold packaging producers responsible for the significant end-of-life costs their products possess, rather than local governments or taxpayers.
"If the cost of doing this was de minimis [Latin meaning 'too small to be meaningful'], companies would have done it already," Winegarden said. "Certainly in California, having compostable or resizable plastic is something that consumers value, certainly the California consumer."
According to Winegarden, policymakers cannot change the behaviors of producers or consumers, while simultaneously keeping costs down.
"They're trying to say we have this great policy that's going to change people's behavior, but don't worry, the costs aren't very high, and that position is just inconsistent," Winegarden said. "They're saying, 'We're going to change all this behavior, but we're not going to increase your prices very much.' Well, if you're not going to increase prices, you're not changing behaviors."
Calrecycle estimates that increased personal income, additional health benefits, and additional environmental benefits will total $53.3 billion in economic impact. Calrecycle estimates that the cost of the legislation and its Juimplementation is $21 billion.
As part of the Extended Producer Responsibility program, producers will be charged fees for producing single-use plastic service ware and packaging, according to Emily Coven, California executive director of Circular Action Alliance. CAA is a nonprofit producer responsibility organization.
“The concept with the EPR program is producers who sell packaging or single use plastic food service ware in the state of California will have to pay a fee to sell those,” Coven said during an online webinar. “So it will be, a certain number of cents per [material].”
Final rates will be published on or before Oct. 1.
“Those fees are designed to incentivize packaging design changes,” Coven said. “So fees will be higher for hard-to-recycle items than they are for easier-to-recycle items.”
Producers are responsible for reporting both the tonnage of materials used in their packaging, as well as the number of units sold, to CAA. A bill is then sent to the producers and the funds generated from the fees are used to fund the recycling system, Coven said.
“CAA's fees are weight-based and set by material category, so there is no single per-unit figure,” Kieran Singh Nashad, CAA spokesperson, told The Center Square, answering questions via email. “Rates vary depending on the material a producer supplies into the state.”
State Sen. Ben Allen, D-Los Angeles County, introduced SB 54. The California Legislature passed the bill, and Gov. Gavin Newsom signed it into law in 2022.
The law is currently in the regulatory implementation phase. The regulations were approved and took effect on May 1, 2026.
“SB 54 finally provides the accountability that corporations have been skirting around for decades, without superseding food quality standards in any way. We are overdue in taking this cost burden off Californians,” Allen told The Center Square via email.
According to Calrecycle, similar programs to SB 54 have been successful for mattresses and paint in California, and other recycling programs have been successful around the globe.
“EPR isn’t just good policy — it’s proven to be effective. It’s widely utilized in Europe and Canada, and it’s being adopted in several other states for packaging and plastics,” Melanie Turner, spokesperson for Calrecycle, told The Center Square via email.
The law is expected to apply to 5,741 producers with annual gross sales greater than $1 million, and will have indirect effects on 546,269 non-regulated businesses, such as wholesalers and restaurants. A total of 7,874 producers will be eligible for a small producer exemption, according to estimates from Calrecycle.
The annual cost of implementing the new packaging standards is estimated to be $457,114 per producer. The costs passed on to non-regulated businesses is estimated to be $4,806.
“The premise that this law will cause massive consumer cost increases is heavily overstated,” Nick Lapis, director of advocacy for Californians Against Waste, said in response via email to The Center Square's questions. “Taxpayers already pay the costs of plastic pollution through municipal waste management and environmental degradation. SB 54 transitions the financial burden away from local governments and places it on the companies generating the waste.”
The law requires that by 2032, there be a 25% cut in the use of single-use plastic packaging and food service ware, that 65% of single-use plastic packaging and food service ware be recycled, and ensure that 100% of single-use packaging and plastic food service ware are recyclable or compostable.
“The target does not require local governments or manufacturers to recycle all the unrecyclable packaging we currently have. It requires producers to use recyclable packaging where feasible,” Lapis said. “That misconception is also at the root of some of the inflated cost estimates that have been put out by opponents of the law.”
On June 15, CAA submitted a plan to the SB 54 advisory board and opened a public comment period that extends until Aug. 14. Following the public engagement period from local jurisdictions, an official plan will be submitted to Calrecycle in October. If Calrecycle approves the plan, the program would become operational in January, and ongoing base EPR fees would go into effect.
The Center Square reached out to the National Resources Defense Council which was unavailable for an interview. The Center Square also reached out to the California Grocers Association, who did not respond to interview requests or questions via email by the time of publication.
