Fresh produce companies counting on a lawsuit or an exclusion to take them out from under California’s packaging EPR law should keep preparing to comply, speakers said during a recent webinar hosted by flexible packaging maker Emerald Packaging.
CEO Kevin Kelly said many companies are still asking whether SB 54 applies to them at all, even after key deadlines have passed.
The law reaches produce shippers nationwide, not just in California, he said.
“It’s not a difficult law to understand. The rules and regulations are difficult to understand,” Kelly said.
Kelly was joined for the Nov. 4 webinar by Jeff Bradenburg, president of QFresh Lab, an independent post-harvest physiology, food safety and packaging testing lab. Isa Glassen, sustainable packaging associate at Emerald Packaging, moderated.
Producer status
SB 54 and the regulations CalRecycle approved in May define a producer as a brand owner or licensee. Kelly said the question gets harder with secondary and tertiary packaging. Emerald’s own research, verified by outside counsel, found the company is a producer for the stretch wrap, pallets and corrugated it uses to ship its products.
“The whole producer question seemed open and closed,” Kelly said. “But in fact, it’s more complex than that.”
Excluded packaging falls outside the law entirely and carries no fees. Exempted packaging stays covered. The producer gets relief from compliance deadlines but still pays.
“You’re covered by the rates. You’re not covered by the dates,” he said.
The field pack exclusion covers produce packed where it’s harvested, such as a head of lettuce bagged in the field. Kelly said it’s unclear whether the boxes, pallet wrap and pallets that travel with that product are also excluded. Similar questions surround pooled pallets and products routed through distribution centers outside California.
“I don’t think there is an answer to it, yet,” he said.
Kelly said the Grower-Shipper Association of Central California has filed a formal application with CalRecycle for a blanket exclusion covering modified atmosphere packaging. He expects a response within about 45 days.
The obstacle is the regulatory language. A food safety exclusion requires that packaging be subject to a specific food safety law, regulation or guidance. Bradenburg said FDA does not prescribe packaging types. It requires only that the packaging keeps the food safe.
Companies that believe they qualify for an exclusion must still register, report and pay Circular Action Alliance (CAA) invoices while an application is pending, the speakers said.
Targets out of reach for flexibles
Kelly said the law’s statutory targets don’t match the state of the industry.
“We’re not going to see a 10% reduction in plastic packaging by January 1, 2027,” he said.
The law requires producers to cut plastic covered material 10% from 2023 levels by Jan. 1, 2027, rising to 20% by 2030 and 25% by 2032. At least 2% of the 2027 cut must come from shifting to reusable or refillable packaging.
A 30% recycling rate by 2028 isn’t achievable for flexible packaging or thermoforms because no system exists yet to recycle them, Kelly said. Film’s path to recyclability under the law remains an open question.
Kelly pointed to the US Flexible Film Initiative (USFFI), which is working to prove flexibles can be recycled at scale, and urged produce companies to join. CalRecycle leadership has signaled it wants to see progress, he said.
Compostable packaging offers no relief under SB 54 for now. Switching to compostable plastic earns no source reduction credit, Kelly said.
Separately, California’s AB 1201 restricts compostability claims, which Kelly said threatens the compostable option in a state he estimated holds 35% of that market. Minnesota’s packaging EPR law, by contrast, treats compostables as a compliance pathway.
Material swaps and tradeoffs
Bradenburg, who called himself “packaging agnostic,” said no single material can replace conventional produce packaging across the industry. Down-gauging, smaller packages, more post-consumer recycled (PCR) content, fiber and compostables each carry tradeoffs.
Adding PCR changes a film’s physical properties, he said, and those changes may surface in the supply chain. Paper often requires changes to filling and sealing equipment.
Monomaterial films such as biaxially oriented polyethylene (BOPE) and machine direction oriented polyethylene (MDO-PE) can work, but their barrier properties differ.
“Make sure that you’re not trading one set of problems for a different set of problems,” Bradenburg said.
Litigation unlikely to end the law
Kelly counted five lawsuits pending against EPR laws in California and Oregon. They include a multistate challenge backed by the National Association of Wholesaler-Distributors and a suit from Oceana, NRDC and Californians Against Waste over the regulations.
The newest, filed Oct. 23 by the California Restaurant Association in Sacramento state court, argues SB 54’s producer fees are a tax the state cannot delegate to a private entity.
Kelly said he expects the law to be reopened, not repealed. California agriculture groups have pushed for repeal.
“It’s not gonna go away,” he said. Even if a challenge succeeds, he said, the legislature would likely reenact the fees as a tax.
His advice is to register, report and stay at the table. Late registrants should expect noncompliance letters from CAA, and possibly from its Oregon and Colorado programs, because producer data is shared across states, he said.
