California SB 54 EPR: Source Reduction Plan

Q: I sell to a distributor outside California who ships into the state. Are those my California sales?

Arguably not, and the provision is worth reading rather than assuming. PRC 42041(w)(5) says that "for purposes of this chapter, the sale of covered materials shall be deemed to occur in the state if the covered materials are delivered to the purchaser in the state." The scope is the whole chapter, not just the producer definition, so it governs the PRC 42060 small producer threshold as well as the producer cascade. If you deliver to a distributor outside California and that distributor ships the goods in, your purchaser did not take delivery in California, and on the plain reading the sale is not yours in the state. The likely consequence is that you fall out of the first tier and the obligation lands on the distributor under the seller and distributor backstop at PRC 42041(w)(3). Two cautions. The obligation moves rather than disappears, so a distributor who works this out will come back wanting component data, an indemnity or a different price. And this is a reading of the statutory text, not a confirmed regulator or PRO position, so document it and take advice rather than relying on it quietly.

Q: What are California's producer registration options under SB 54?

California offers three pathways: (1) join the Circular Action Alliance as a Participant Producer signatory; (2) register independently with CalRecycle through PEPRS; or (3) apply for a Small Producer Exemption (less than $1 million CA gross sales). Two things are routinely got wrong about it: the exemption is not automatic, and it relieves REPORTING only. Under PRC 42060(a)(5) and 14 CCR 18980.5.2 an exempted small producer must still register, and the exemption is held on file with CalRecycle rather than granted once and forgotten. We have not found a source that fixes the renewal interval, so this site does not state one. Confirm your own renewal date with CalRecycle.

Q: Does California's de minimis exemption apply automatically to small producers?

No. The less than $1 million California gross sales threshold requires a formal application through PEPRS. CalRecycle can deny it. The exemption must be renewed, and you must receive written confirmation before excluding materials from supply reports. We have not found a source that fixes the renewal interval, so this site does not state one; confirm yours with CalRecycle. CAA will not file a small producer exemption on your behalf.

Q: When do California EPR fees begin?

Mandatory fees begin in 2027 after CalRecycle approves the program plan (expected January 2027). CAA is expected to invoice an early pre-program fee in August 2026. The first Plastic Pollution Mitigation Fund payment is due March 1, 2027.

Q: What is the penalty for violating California SB 54?

$50,000 per day per violation, the highest penalty of any U.S. packaging EPR state. Violations include selling covered products without registering, failing to file annual supply reports, and non-payment of fees.

Q: What are California's SB 54 source reduction targets?

Producers must reduce plastic covered material against a 2023 baseline by 10% in 2027, 20% in 2030, and 25% in 2032. The 2032 target is measured by both weight and by component or unit count. A separate reuse, refill, or elimination minimum applies: 2% in 2027, 4% in 2030, and 10% in 2032.

Q: What is an Individual Source Reduction Plan (ISRP) and when is it due in California?

An ISRP is a forward-looking plan each producer of plastic covered packaging files with the Circular Action Alliance through its Producer Portal, showing how it will meet SB 54's source reduction targets. It is due no later than August 1, 2026. CAA may adjust the date as rulemaking settles, so confirm the current date in the portal.

Q: Can recycled content (PCR) count toward California's source reduction requirement?

Yes, within limits. Post-consumer recycled content is a recognized source reduction pathway, and plastic PCR can count toward the requirement subject to a cap. Other recognized pathways are reuse and refill, eliminating components, switching to non-plastic materials, and right-sizing or lightweighting.

Two fee instruments, and which one you pay this year

California has two distinct fee instruments and they are commonly confused. CAA published the 2026 California Early Fee Schedule on July 20, 2026: six flat per-pound rates covering program year 2026 (Glass and Ceramics 0.3 c/lb, Metal 0.8 c/lb, Paper/Fiber 0.4 c/lb, Plastic Rigid 1.3 c/lb, Plastic Flexible 2.5 c/lb, Wood and Other Organic Materials 0.8 c/lb). CAA's program plan says early fees are invoiced in August 2026; neither that plan nor the schedule states an installment structure or the data year assessed. That is what a California producer pays this year. The ongoing per-CMC schedule that starts in 2027 is still in draft, and the fee calculator on this site prices that 2027 draft rather than the 2026 early fee.

What non-compliance costs, and what 2032 requires

California carries the highest penalty in force in any U.S. packaging EPR state, an administrative civil penalty of up to $50,000 per day per violation under PRC 42081(a)(1), reduced to $25,000 per day for producers meeting the small-producer criteria in PRC 42060(a)(5), and imposes a 100% recyclability mandate on all packaging by 2032.

Registering, and what the small producer exemption does not do

Three registration pathways exist: joining CAA, registering independently through PEPRS, or applying for a small producer exemption. Read that last one carefully: PRC 42060(a)(5)(A) measures TOTAL gross sales in the state, not California sales of covered materials, so a large company with a modest packaging footprint does not qualify however little covered material it places. The exemption is also not automatic, relieves reporting only, still requires registration, is renewed with CalRecycle every two years, and under PRC 42060(a)(5)(B) CalRecycle may refuse it outright where granting it would hinder a covered material category from complying (PRC 42060(a)(5); 14 CCR 18980.5.2).

Where a sale counts as a California sale

One further provision decides more than its length suggests. PRC 42041(w)(5) says that FOR PURPOSES OF THE WHOLE CHAPTER, a sale of covered materials is deemed to occur in the state only if the covered materials are delivered to the purchaser in the state. Because that scope is chapter-wide rather than confined to the producer definition, it reaches the small producer threshold as well as the cascade. A producer delivering to an out-of-state distributor that then ships into California has, on the plain reading, not made a California sale, and the obligation lands on the distributor under the seller and distributor backstop. The obligation moves rather than disappears, and no regulator or PRO has confirmed the reading, so treat it as a position to document rather than assume.

The reduction targets, and the plan that reports them

The program also sets source reduction targets for plastic packaging (10% by 2027, 20% by 2030, and 25% by 2032 against a 2023 baseline), with Individual Source Reduction Plans (ISRPs) due to CAA by August 1, 2026.

Fee Schedule by Material

Base rates before eco-modulation. Final fee = Tonnage x Rate x Eco-Modulation Multiplier. All amounts are projections; actual rates set upon program plan approval.

Material / Packaging Type	Rate / Metric Ton	Tier
Aluminum, cans	$154 (est.)	Tier 1
Clear PET (#1)	$1,124 (est.)	Tier 4
HDPE Natural (#2)	$1,213 (est.)	Tier 4
Steel	$88 (est.)	Tier 1
Uncoated Paper/Board	$66 (est.)	Tier 1
Corrugated	$88 (est.)	Tier 1
HDPE Pigmented (#2)	$1,190 (est.)	Tier 4
PP (#5)	$1,190 (est.)	Tier 4
Glass	$44 (est.)	Tier 1
LDPE Film / Mono-PE	$1,764 (est.)	Tier 4
PS Rigid (#6)	$2,579 (est.)	Tier 4
Expanded Polystyrene	$2,535 (est.)	Tier 4

Eco-Modulation Factors

◐ SignaledDescribed in an official source (statute, draft rule, or CAA plan) but not yet final, or specific values not yet set.

Source: CAA California Program Plan, Chapter 10 (Eco-Modulation) and Chapter 6 (Source Reduction), filed June 15, 2026; nine PRC 42053(e) factors. Proposed and phased; per-factor VALUES are NOT yet set (CAA publishes bonus and malus rates each October, beginning October 2026). Draft program plan, not yet approved.

Eco-modulation adjusts fees based on packaging design and recyclability attributes.

Fee Reductions (Bonuses)

PCR content bonus (2027): per-pound credit for post-consumer recycled content, APR-certified; rate announced in 2026 Source-reduction bonus (2027): tiered (Tier 1 and higher Tier 2), financed by source-reduction maluses High-recycling-rate bonus (2027): applied passively to the base fee of CMCs with relatively high recycling rates Design-for-recyclability factors (2028): additional recyclability-based fee adjustments Renewable and compostable materials (2029+): credit for renewable plastic and certified compostable materials without toxic additives

Fee Increases (Maluses)

Non-recyclability malus (2027): applied passively to the base fee of CMCs not designated recyclable on CalRecycle's SB 54 list (e.g., PVC) Carbon-black / NIR malus (2028): active malus on features that defeat near-infrared sorting, including carbon-black or NIR-undetectable pigments (producer self-attestation, audited) Hazardous materials and toxics: presence of hazardous materials, toxic heavy metals, pathogens, or additives in the packaging (PRC 42053(e))

Multiplier floor: Not yet set - CAA publishes bonus and malus values each October (first rates October 2026), invoiced the following January

California eco-modulation is now proposed in the CAA California Program Plan (filed June 15, 2026, Chapter 10), and is phased. CAA proposes eco-modulation BEGINNING with 2027 program fees: a passive bonus for CMCs with high recycling rates, a passive malus for CMCs not designated recyclable (such as PVC), plus a source-reduction PCR bonus (rate announced in 2026 so producers can plan). Additional factors phase in for the 2028 program year (design-for-recyclability and a malus on packaging features that disrupt recycling, including carbon-black or NIR-undetectable pigments, applied as an active malus with producer self-attestation) and 2029 and beyond (renewable plastic, certified compostables without toxic additives). The percent or dollar VALUE of each bonus and malus is NOT yet set; CAA publishes actual bonus and malus rates each October (beginning October 2026) alongside the fee schedule, invoiced the following January. This carbon-black/NIR malus is a CALIFORNIA proposal for 2028; it is distinct from Oregon, which remains bonus-only with no malus this cycle. Separately, plastic producers face Plastic Pollution Mitigation Fund (PPMF) fees projected to raise about $5 billion over 10 years, plus a 2032 recyclability/compostability mandate. Do not state specific CA eco-mod percentages - none are established yet.

Litigation Status

Three active cases. (1) 17 states + NAW v. CalRecycle/CAA (E.D. Cal., filed June 22, 2026): challenges SB 54 itself under the dormant Commerce Clause and First Amendment and seeks to enjoin enforcement; no injunction has issued, so all SB 54 obligations remain in effect. (2) Oceana / NRDC / Californians Against Waste v. CalRecycle (S.F. Superior Court, filed June 2, 2026): challenges the implementing regulations (effective May 1, 2026) as too lenient - alleged unauthorized carveouts, indefinite exemptions, and hazardous-waste-generating technologies counted as recycling. It attacks the regulations, not the statute, and does not seek to stop the program. (3) SB 343 labeling challenge (California League of Food Producers v. Bonta, filed March 17, 2026, Case 3:26-cv-01675): targets the separate "chasing arrows" labeling law, not SB 54. On July 14, 2026 the court granted a preliminary injunction barring enforcement of SB 343 until further order, finding four provisions unconstitutionally vague and a First Amendment violation; the ruling is preliminary and a Ninth Circuit appeal is expected. SB 343 scope, the qualifier most producers miss: the labeling restrictions attach to the DATE OF MANUFACTURE, not the date of sale. CalRecycle states they apply to products and packaging manufactured after October 4, 2026, and that packaging manufactured before that date is not subject to them regardless of when it is sold, so stock already made is permanently outside the rule. The October date is not operative today because of the injunction, and CalRecycle's own page still presents it without mentioning the injunction. What is not affected: none of these cases pauses registration, reporting, source-reduction, or fee obligations. Sources: Packaging Dive, Waste Dive, Recycling Today (Jun 2026); Resource Recycling (Jun 5, 2026); National Law Review (Jun 2026).

Program Plan Status

Confirmed

Plan submitted: Yes. CAA submitted its draft five-year California Program Plan to the SB 54 Producer Responsibility Advisory Board on June 15, 2026, revised June 18, 2026.

Agency approved: Not yet. CalRecycle approval is required before the January 1, 2027 program start.

Where it stands: Public comment closed August 14, 2026. CAA then has 60 days to respond before filing a revised plan, expected October 2026.

Next milestone: Comment period closed August 14, 2026; the final plan goes to CalRecycle in October 2026.

Source: Circular Action Alliance California program plan page; CalRecycle SB 54 program page. Agency program page →

Reporting Deadlines and Key Dates

Mar 7, 2025

Gov. Newsom directs CalRecycle to restart SB 54 rulemaking

Mar 9, 2026

AB 2253 (recycled content claims) referred to committee

Late May 2026

AB 2253 passed Assembly 42-19; ordered to Senate

Jul 1, 2026

AB 2253 cleared Senate Environmental Quality 4-2; re-referred to Senate Appropriations

Jul 2, 2026

AB 2253 amended: the credit-based mass balance prohibition is struck from the bill

Aug 3, 2026

AB 2253 placed on the Senate Appropriations suspense file 7-0

Aug 13, 2026

AB 2253 out of Senate Appropriations 5-2, do pass as amended; amendment expressly permits proportional attribution (ISO 22095-2:2026); applies to all products from Jan 1, 2030

Mar 17, 2026

SB 343 constitutional challenge filed (21 organizations; Case 3:26-cv-01675)

Jun 2, 2026

Oceana, NRDC, and Californians Against Waste sued CalRecycle over SB 54 regs (S.F. Superior Court)

Jun 3, 2026

SB 343 PI hearing held

Jul 14, 2026

Court grants PI blocking SB 343 enforcement (prelim.)

Jun 22, 2026

17-state AG coalition + NAW filed federal challenge to SB 54 (E.D. Cal.)

May 31, 2026

Annual Supply Reports + CY2023 Baseline Source Reduction Report due (CAA-communicated; PRC 42060 delegates reporting timelines to CalRecycle)

Jun 1, 2026

Producer registration deadline (PEPRS/CAA)

Jun 15, 2026

CAA filed its draft 5-year program plan with the Producer Responsibility Advisory Board; 60-day public comment period opens (closes ~Aug 14, 2026)

Aug 1, 2026

Individual Source Reduction Plans due

Aug 14, 2026

Public comment period on the draft program plan closes

Aug 2026

CAA invoices early pre-program fees (one installment, based on CY2025 data)

Oct 2026

CAA expected to file revised program plan; final 2027 fee schedule published

Jan 1, 2027

Formal program beginning; CalRecycle approves plan

Mar 1, 2027

First California Plastic Pollution Mitigation Fund payment due ($500M/yr)

Jul 1, 2027

First CAA administrative fees remitted to CalRecycle

Covered Products Scope

All covered plastic materials placed on the CA market, including primary, secondary, and tertiary plastic packaging. Also covers paper bags.

Exemptions and Exclusions

The following categories may be fully or partially exempt from producer obligations in California. Verify applicability with the CAA producer portal or CalRecycle before excluding any materials from supply reports.

De Minimis (Small Producer)

<$1M California gross sales. IMPORTANT: this exemption is NOT automatic - producers must apply through PEPRS and receive CalRecycle confirmation. Apply annually.

B2B / Tertiary Packaging

California does not provide a general B2B exemption. SB 54 covers primary, secondary, and tertiary packaging placed on the CA market regardless of whether the sale is B2C or B2B. Only very narrow categorical exclusions apply (e.g., hazmat containers, beverage containers under the CRV program). Producers selling exclusively to business customers are still subject to registration, reporting, and fee obligations.

Medical Device and Pharmaceutical

Packaging for FDA-regulated medical devices and prescription drugs explicitly excluded. Claim requires filing a conflict notice with CalRecycle through PEPRS, documenting the conflict between SB 54 and a mandatory FDA or USDA rule.

Agricultural Packaging

Packaging for agricultural commodities where the grower both harvests and packages the product on-site (at the site where it was grown or raised) excluded from producer obligations

Long-Term Storage / Protection

Packaging for goods designed for long-term protection or storage where the product has a lifespan of 5+ years excluded

Hazardous Materials Packaging

The broadest hazardous exclusion in U.S. packaging EPR, and the only unconditional one. PRC 42041(e)(2)(D) excludes packaging used to contain hazardous or flammable products classified by the OSHA Hazard Communication Standard, with no material limit and no agency determination required. A separate, narrower exclusion at (e)(2)(C) covers plastic packaging containers used to contain and ship DOT-classified dangerous goods under 49 CFR Part 178. All FIFRA packaging is excluded at (e)(2)(B). CalRecycle's adopted regulations do not elaborate any of the three, so the reach into secondary packaging is untested.

Reusable / Refillable Packaging

Reusable/refillable packaging designed for multiple uses, built durably, and supported by appropriate return infrastructure is fee-exempt

California exclusions are generally not self-executing - producers must actively apply through PEPRS. The small-producer exclusion is approved for two years, and renewal must be filed between 120 and 90 days before it expires (14 CCR 18980.5.2(b), (c)); exempt producers must still keep their registration current. Medical device exclusion requires documented FDA/USDA conflict.

Responsible Producer

Obligation follows a hierarchy: the brand owner whose brand is on the covered product; if the brand owner has no U.S. presence, the importer of record; if neither exists, the distributor or retailer that first sells the item into the state. Store-brand / private-label goods: the retailer whose brand appears is the producer. Licensed brands: the licensee that makes or sells is usually the producer unless the license assigns it.

CA: SB 54 defines producer broadly; for franchises the franchisor may be the producer. Confirm your role in PEPRS before registering. General framework; verify the statutory definition and your specific role before registering.

What You Report and Covered Materials

These attributes are the fee inputs, so instrument them at design time. CAA collects this once through its producer portal and maps it to each state you sell into; state-specific rules still apply. Retain supporting records (typically 3 to 5 years) to substantiate reports, exemptions, and credits.

Covered Material Category (CMC) for each component
Net weight per component, per unit (grams)
Units / volume placed on the state market in the reporting year
Post-consumer recycled (PCR) content %, with documentation
Recyclability designation (per the state list) and reuse / refill status
Format and food-contact flag

California's Covered Material Categories (CMC) list plus CalRecycle material characterization determine recyclability (and interact with SB 343 labeling). Current vintage: the January 2026 update, 95 categories across 6 material classes, published December 31, 2025 and the first version to carry an estimated recycling rate per category. With SB 343 enforcement enjoined, the CMC list is the operative recyclability determination in California. Covered materials / recyclability list →

Design Levers: PCR, Source Reduction and Toxics

Confirmed

PCR / recycled content: PCR earns a source-reduction bonus (2027) and counts toward SB 54 goals. AB 2253 (out of Senate Appropriations 5-2 on Aug 13, 2026, do pass as amended) sets documentation rules for voluntary recycled content claims. Its credit-based mass balance prohibition was struck on Jul 2, 2026, and the Aug 13 amendment expressly permits proportional attribution as defined in ISO 22095-2:2026, the ISO mass balance standard published Jan 2026, which defines it as assigning credits to outputs in proportion to their share of total output. Guardrails: no recycling credits to fuel use or fuel production, and no credit transfers between unrelated processes. It applies to all products beginning Jan 1, 2030. Document PCR at the resin / lot level.

Source reduction: SB 54 requires 25% source reduction of plastic covered material and 100% of covered material to be recyclable or compostable by January 1, 2032, with a 65% plastic recycling rate by 2032 (30% interim by 2028). Producers file an Individual Source Reduction Plan (ISRP) with CAA by August 1, 2026, forecasting progress toward the interim reduction milestones (2027 and 2030) as well as the 2032 target.

Toxics / substance limits: California applies the Toxics-in-Packaging heavy-metals limit (no intentional use; 100 ppm total of lead, cadmium, mercury, and hexavalent chromium) and bans PFAS in food packaging (AB 1200). Proposition 65 chemicals are also an SB 54 eco-modulation malus factor.

Sources: CA SB 54; AB 1200 (PFAS food packaging); CA Toxics in Packaging (HSC 25214.11 et seq.); CAA CA Program Plan Ch. 10. Model the dollar impact of any design change in the EPR fee calculator; this is design guidance, not a fee estimate.

Source Reduction Plans (ISRP): What Producers File

Signaled

Individual producers of plastic covered packaging file an Individual Source Reduction Plan (ISRP) with the Circular Action Alliance (CAA) through its Producer Portal, no later than August 1, 2026 (CAA may adjust the date as rulemaking settles, so confirm the current date in the portal). There is no public fill-in template, but CAA's Individual Source Reduction Plan Guidance is available to registered producers in the CAA Producer Portal, alongside the reporting fields. The plan is a forward-looking forecast of how you will reach the statutory reduction targets, and it may be refined over time.

Reduction is measured against your 2023 baseline of plastic covered material:

Milestone	Total plastic reduction	Minimum via reuse, refill, or elimination
Jan 1, 2027	10%	2%
Jan 1, 2030	20%	4%
Jan 1, 2032	25% (by weight and by component / unit count)	10%

Four pathways plus one capped credit: reuse and refill; elimination of components; switching to alternative non-plastic materials; and right-sizing, lightweighting, concentrating, or shifting to bulk. Post-consumer recycled content is not source reduction: PRC 42041(aj)(2) excludes switching from virgin covered material to PCR. PRC 42057(a)(2)(B)(i) separately allows no more than 8 percent to be met through an alternative compliance formula the PRO must develop and CalRecycle must approve. No approved formula exists yet, so do not plan against it.

Two details producers miss: the 2032 target is measured by component / unit count as well as by weight, so track both from the start; and a filed ISRP can be subject to public records requests, so keep every claim defensible.

Sources: CA SB 54 (PRC 42041(aj), PRC 42057(a)(2)(B)(i)); CAA California Program Plan filed June 15, 2026, section 6.2.3.3; CAA California producer guidance (circularactionalliance.org/california); reduction targets confirmed by statute, deadline and filing mechanics signaled per CAA guidance. A step-by-step readiness checklist is on the source reduction plan page.

Statute and Rule Text

Statute: SB 54 (Allen, Ch. 75, Statutes of 2022), codified at Cal. Pub. Res. Code 42040 et seq.. Read the statute →

Implementing rule: 14 CCR Div. 7, Ch. 11.1, Arts. 1 to 14, sections 18980.1 to 18980.14, plus Ch. 11.5 section 18981. Approved by the Office of Administrative Law and filed with the Secretary of State on May 1, 2026, effective on filing. Read the rule →

Primary sources. Where the statute and an agency summary disagree, the statute and the adopted rule control.

Frequently Asked Questions

I sell to a distributor outside California who ships into the state. Are those my California sales?

Arguably not, and the provision is worth reading rather than assuming. PRC 42041(w)(5) says that "for purposes of this chapter, the sale of covered materials shall be deemed to occur in the state if the covered materials are delivered to the purchaser in the state." The scope is the whole chapter, not just the producer definition, so it governs the PRC 42060 small producer threshold as well as the producer cascade. If you deliver to a distributor outside California and that distributor ships the goods in, your purchaser did not take delivery in California, and on the plain reading the sale is not yours in the state. The likely consequence is that you fall out of the first tier and the obligation lands on the distributor under the seller and distributor backstop at PRC 42041(w)(3). Two cautions. The obligation moves rather than disappears, so a distributor who works this out will come back wanting component data, an indemnity or a different price. And this is a reading of the statutory text, not a confirmed regulator or PRO position, so document it and take advice rather than relying on it quietly.

What are California's producer registration options under SB 54?

California offers three pathways: (1) join the Circular Action Alliance as a Participant Producer signatory; (2) register independently with CalRecycle through PEPRS; or (3) apply for a Small Producer Exemption (less than $1 million CA gross sales). Two things are routinely got wrong about it: the exemption is not automatic, and it relieves REPORTING only. Under PRC 42060(a)(5) and 14 CCR 18980.5.2 an exempted small producer must still register, and the exemption is held on file with CalRecycle rather than granted once and forgotten. We have not found a source that fixes the renewal interval, so this site does not state one. Confirm your own renewal date with CalRecycle.

Does California's de minimis exemption apply automatically to small producers?