California PET processors received a much-needed shot in the arm this week, as a bill updating a market incentive payments program was signed into law.
On July 6, Gov. Gavin Newsom signed several pieces of legislation, including SB 166, a public resources trailer bill that increased support for the Plastic Market Development Payment (PMDP) program in the state’s 2026-2027 budget.
The final signed budget includes:
- An increased payment cap, from $150/ton to $250/ton through July 1, 2029
- $90 million appropriated from the Beverage Container Recycling Fund over three years ($35 million in fiscal 2026-2027, $30 million in fiscal 2027-2028, $25 million in fiscal 2028-2029)
- A grant program for plastic reclaimers and manufacturers totaling $5 million annually during fiscal years 2026-2029 to support recycling infrastructure investments
“This provides a total of $105 million in continued investment to stabilize the recycled plastics market and strengthen demand for California-derived recycled plastics,” the agency said in a statement.
The budget also includes reversions to the Beverage Container Recycling Fund for several programs, CalRecycle said:
- Beverage Container Loan Program: $30 million
- Workforce Development Program: $865,000
- Beverage Container Quality Infrastructure Grant Program: $1.228 million
- Reusable Beverage Containers Infrastructure Grant Program: $18 million
Amid several high-profile PET processor closures, stakeholders said recyclers need support from the PMDP and other incentive programs to withstand market volatility.
Kate Bailey, chief policy officer at the Association of Plastic Recyclers (APR), commended the development: “A strong circular economy depends on strong domestic recycling markets. We are grateful to CalRecycle, the Legislature, and the Governor’s Office for this investment and for their continued leadership in supporting California’s plastic recycling infrastructure. Their commitment recognizes the vital role of recyclers in protecting the environment, creating in-state jobs, and keeping economic value here in California.”
APR owns Resource Recycling, Inc., publisher of Plastics Recycling Update.
A second ‘active vehicle’
In late June, a similar initiative, AB 1149 (Jackson), passed out of the state Senate Appropriations committee. The bill also aims to increase payments to in-state PET reclaimers, and remains “an active vehicle,” according to Mark Murray, executive director of Californians Against Waste (CAW), which is supporting the bill.
For now AB 1149 is parked in the committee’s Suspense File. Legislation may enter the Suspense File process following regular testimony, and later hold a vote that determines whether it proceeds to the Senate floor for consideration or remains in committee.
The coalition of PMD stakeholders is feeling positive about the budget deal, Murray said, but work will continue to help support recyclers.
“There remains frustration with CalRecycle regarding the lack of understanding and support for PET markets and the need to strategically invest surplus CRV in processing incentives,” he said. “It will be years before California PET reclaimers recover from the self-inflicted wound of ‘tiered’ PMDs.”
Looking ahead, PET reclaimers and the beverage industry will meet with the bill’s author, Assembly Member Corey Jackson, to explore whether the budget deal requires clarification via AB 1149, Murray said.
The legislature is on summer recess until Aug. 3, and then will hold its final four weeks of session.
Paul Bahou, president of Global Plastic Recycling, told Plastics Recycling Update that the budget language was a compromised version of AB 1149. Bahou is part of the California Washline Alliance lobbying group, which is working to expand the PMDP program.
Though the group had hoped for an increase to $300/ton, “I will take the budget deal as a win and celebrate,” Bahou said.
