California’s SB 54 is widely recognized as one of the most ambitious packaging laws in the United States, setting aggressive targets to reduce single-use plastic packaging and shift the market toward recyclability. But as implementation moves from policy to practice, obligated producers are confronting a far more difficult reality: turning high-level mandates into actionable, defensible source reduction plans.
With a May 31 deadline for producers to submit annual supply reports to Circular Action Alliance (CAA), followed by an August 1 deadline for Individual Source Reduction Plans, the pressure is mounting. Across the industry, sustainability, packaging, and compliance teams are working to translate evolving regulatory expectations into measurable strategies—often without clear precedent.
The challenge is straightforward but difficult: CAA is tasked with meeting ambitious SB 54 source reduction targets—including a 25% reduction in plastic-covered material and shifting at least 10% of single-use plastic packaging and food serviceware to reuse/refill or elimination pathways by 2032. Producers and their supply chains now need to determine how their own portfolios can contribute to those industry-wide goals while staying within strict antitrust boundaries.
“SB 54 sets ambitious source reduction targets, and CalRecycle oversees their implementation,” said Geoff Inch, senior vice president of producer services at CAA. “As California’s approved PRO, CAA’s role is to bring producers’ plans together and provide the reporting tools, guidance and program structure that help them meet those requirements and develop credible source reduction strategies.”
At its core, SB 54 requires producers to rethink packaging systems. Source reduction is not limited to lightweighting or material substitution; it demands a holistic approach to reducing the amount of material placed on the market while aligning with recyclability and compostability requirements.
“It’s not just about reducing packaging or switching materials,” said Eadaoin Quinn, sustainable packaging senior manager at Mars and CAA board member. “Companies are being challenged to rethink delivery models and explore packaging solutions that can realistically work in future recycling and composting systems.”
To help operationalize source reduction, SB 54 outlines five primary pathways that producers can use to demonstrate progress: material elimination, lightweighting, shifting to reuse or refill systems, increasing post-consumer recycled (PCR) content, and redesigning packaging to reduce plastic components or transition to alternative materials. While each pathway presents different technical and economic challenges, together they form the practical toolkit companies must draw from to meet reduction targets. In practice, most producers will need to pursue a portfolio approach—combining incremental improvements like lightweighting with more transformative shifts such as reuse models or PCR integration—to build plans that are both credible and scalable.
Understanding how those pathways translate into real system changes is where many companies are now focusing.
“Source reduction isn’t just a compliance box to check. If you understand the requirements, like the 8% pathway that can be met with post-consumer recycled content, you unlock a real system lever: stronger demand for recycled material,” said Kate Davenport, chief impact officer from The Recycling Partnership. “This is a complex moment, but it’s also a chance to bring teams across the business functions together, from design to procurement to sustainability, and connect the dots between source reduction and PCR to drive cost efficiency and improve the health of the recycling system.”
This complexity is playing out inside organizations in real time.
“Teams are building the plane while flying it,” said Michael Washburn, principal at Washburn Consulting, working with multiple obligated producers. “You have engineering, procurement, marketing, and legal all trying to align, but they’re working with different assumptions and timelines. And the rules are still vague and not being well communicated. It’s a big expectation with insufficient support being provided to companies trying hard to comply.”
The textile industry is navigating similar complexity. “Our members are heads-down on SB 707 compliance right now, building out California’s first-ever textile EPR program,” said Chelsea Murtha, senior director of sustainability at the American Apparel & Footwear Association (AAFA). “But many of those same companies also have packaging obligations under SB 54. They’re operating in parallel regulatory frameworks with overlapping timelines, trying to build compliance infrastructure for both. It’s a reminder that source reduction and circular economy requirements are becoming the new baseline across product categories.”
One of the most persistent challenges is data. Many producers lack centralized, high-confidence baselines for their packaging portfolios but need to show reduction against 2023 supply data, making it difficult to model reductions or compare scenarios.
“You can’t reduce what you can’t measure,” said Wes Carter, president of Atlantic Packaging and member of SB54’s Advisory Board. “And right now, data systems are fragmented. Companies are pulling from multiple sources, with varying levels of accuracy, and trying to build a coherent story from that.”
Even when baseline data is available, interpreting regulatory expectations adds another layer of difficulty. Questions around acceptable methodologies, assumptions, and documentation standards remain active areas of discussion.
“There’s a lot of uncertainty about what ‘good’ looks like,” said Anna Kendall, US EPR leader at Ernst & Young. “Companies don’t just want to comply – they want to be confident that their plans will stand up to scrutiny, be operationally feasible in practice, and make economic sense. That’s a high bar given how much is still in flux.”
At the same time, the need for thoughtful engagement across the industry is becoming increasingly clear. Producers are facing similar challenges and, in many cases, would benefit from shared learning on definitions, modeling and reporting.
But collaboration comes with its own constraints.
“Everyone wants to compare notes, but you have to be extremely careful,” said Meaghan Hembree, a partner at DLA Piper working on SB 54 compliance. “Information sharing has to be structured and intentional. There are real legal risks if companies cross certain lines, even in the context of sustainability.”
The supply chain—suppliers, converters and co-packagers—needs to be brought into the conversation because they hold the technical knowledge to verify assumptions like transition timelines and material performance.
This dynamic—where knowledge sharing is both necessary and constrained—has contributed to a broader sense of fragmentation. Companies are moving quickly, but often in parallel rather than in sync.
In practice, it can feel like an industry-wide puzzle, with each company holding pieces of the solution but little shared understanding of how they fit together or how to move forward collectively.
“Everyone is working through this in real time and there are a lot of moving pieces,” said Molly Laverty, director of sustainability reporting and engagement at Primo Brands. “What’s most valuable right now is having a space where companies can test ideas and learn from each other. This effort must be iterative to have a positive impact.”
As deadlines approach, that need is becoming more urgent. The May 31 supply report submissions and August 1 source reduction plan deadline will represent major tests of how companies are interpreting and operationalizing requirements.
The first round of plans won’t be perfect—but they will set the direction for how companies interpret and operationalize one of the most ambitious packaging laws in the US. The stakes extend beyond compliance. SB 54’s source reduction requirements are not only a regulatory requirement but also a catalyst for broader change in how packaging is designed, used and recovered.
“The science is clear: source reduction is essential to tackling the plastic pollution crisis,” said Anja Brandon, director of plastic policy at Ocean Conservancy. “SB 54 provides us an opportunity to do just that. To make the most of it, we need to be thoughtful and creative about how we redesign systems to deliver lasting change for people and the planet.”
For obligated producers, the opportunity is paired with significant pressure.
“There’s no question this is challenging,” said Jason Berquist, CEO of RecycleMe North America. “But it’s also where progress happens. The key is creating spaces where people can move from confusion to clarity. Once brands are able to think wholistically, the realization is that EPR is not just a cost & compliance center — it’s a strategic lever.”
