Fresh produce industry members are nervous and concerned about the upcoming reporting dates for California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act.
“It’s coming up fast,” says Gail Delihant, senior director of California government affairs for Western Growers.
As of June 1, every producer must formally register through California’s official Producer Responsibility Organization, Circular Action Alliance, register with CalRecycle and submit an application to comply as an independent producer or apply for a small producer exemption with CalRecycle. And this applies to all companies across the country selling into California, not just those growing in the state.
“It’s all just happening too fast,” Kevin Kelly, CEO of Emerald Packaging, says. “If it weren’t for folks like the trade associations and me, nobody would know that this deadline exists.”
Why the California Packaging Law Implementation is Facing a Tight Deadline
CalRecycle asked for an immediate implementation of the regulation because of missed implementation deadlines.
“They became effective immediately and we had 30 days to sign up,” Delihant says.
There’s been a lot of edits and updates to the regulation, which have all been subject to comment periods. And this has happened a few times and has led to missed deadlines. Circular Action Alliance is also due to submit a plan for this regulation in June. However, as of now, there is not a formal regulation for the Plastic Pollution Prevention and Packaging Producer Responsibility Act.
“The reason why people need to sign up in June is because the whole program is supposed to start on Jan.1, 2027, and it can’t start unless we know what the regulation is and we know what the plan of implementation is going to be from the [Producer Responsibility Organization],” Delihant says. “And that’s all behind schedule. And how can [CAA] write a plan when they don’t even have a regulation this final?”
Who Qualifies as a Producer Under California La
Delihant says many questions remain as this reporting deadline looms. Mainly the most critical one: “who is the producer that must pay the fees for the covered material?”
Kelly warns that there are a lot of growers and shippers who don’t know that their business would be considered a “producer.”
“This is even just. a fundamental question of what people know, what they don’t know,” he says.
Delihant says that while some parts of the fresh produce industry are cut and dry, for example, a company packages an item in a covered material, and it is sold with the company’s brand on it. In that case, that company is the “producer.”
But there’s many facets of the fresh produce that aren’t so clear.
“But if you are a vertically integrated farming operation, and you are packaging that produce in the field in a covered material — head lettuce, for example. It’s packaged in film plastic in the field. It’s put into a cardboard box. It is put on the truck. The cardboard box is put on a pallet. The truck goes to the cooling facility to cool the whole thing down. It gets wrapped in film plastic and it gets shipped out. And you are the grower, packer, shipper.”
In that case, Delihant says, the “producer” is less clear because California state law exempts growers that field pack from responsibility.
She says in that example, some company along the line will be responsible for the film plastic, the pallet, the box the lettuce goes into. And how much of that material is recyclable? Does the corrugated box have a wax plastic coating? Are the palates reusable?
“Did the buyer make the decision for me to put it in a box and get it to the store, or did I make that decision?” she says. “I wrapped it in shrink wrap so that it wouldn’t fall over in the truck. That shrink wrap is a covered material. Who’s responsible for that shrink wrap? Was it the buyer who said shrink wrap everything on the pallet, or was that my decision to shrink wrap it on the pallet?”
At some point, Delihant says, there will be a responsible party, but as to which company that will be is still unclear. She says that while “producer” is defined as the first point of sale, it could be the distributor or the retailer. The other troubling thing, she says, is that the Circular Action Alliance only provides information on the organization’s definition of a “producer” to those companies that register.
She says that while California state law would exempt the grower-packer-shipper from paying fees for field packaging, the grower-packer-shipper would still likely be responsible for additional fees.
“The subsequent packaging like the pallet or the box or the shrink wrap, I’m probably going to need to register for that,” she says. “I’m probably going to have to pay the fees for that. So, whoever sells my head lettuce next, they’re going to have to pay the fees for the wrap around my head lettuce.”
The Threat of Cost-Shifting
And while this might be the case, Delihant says that California growers have started to receive bills from retailers for produce sold into other states with EPR laws.
Delihant says one national specialty grocer sent this grower an EPR invoice from Oregon. She says this member has a contract to grow and wrap produce for this retailer. And while the regulation in California would make it appear as though the grocer would be on the hook for the fees because the grocer makes the decisions and the produce is a private label and the grocer contracted out the growing. She says that wasn’t the case.
“They passed those fees on to my farmer,” she says.
And she warns that this could happen in California as well as other states with EPR regulations.
“Watch your contracts,” she says. “Be very clear. Make your communication very, very good because these grocery stores are going to want to pass these fees on to you.”
Kelly, too, warns of dire consequences for fees passed on to growers who thought they’d have an exemption.
“They’re just going to turn around and force it down the throat of the guy who was at the exclusion,” he says. “It’s all going to become untenable eventually.”
Another piece of advice, Delihant says, is for growers to have an open dialogue with suppliers and companies involved in the business. Noting that a supplier might pay an EPR fee and the grower might also face that same fee, “We are hearing that people are double-paying.”
Unpackable Exemptions and Skyrocketing Fees
While growers with minimally processed food, such as grab-and-go items or ready-to-eat items are exempt from the regulations, Delihant says those producers would likely still need to check in with CalRecycle to ensure those exemptions are still in play.
But those growers who sell produce that comes in a plastic bag and are unable to immediately change packaging, need to apply for an exemption from the Circular Action Alliance because those plastic bags cannot be recycled.
“As of Jan. 1, 2027, it is illegal for you to sell it in or into California unless you have an exemption or an exclusion if it can’t be recycled at all,” she says. “If part of it is recycled on those rates and dates that they have in the law, that’s one thing.”
She says, but that doesn’t apply to film plastic. Delihant says those packages that use film plastic are likely going to be the highest because film plastic can’t be easily recycled in California.
“The fees collected are going to build the infrastructure,” she says. “And then there’s a $500 million environmental fee on top of that to pay for all the damage plastic has done over the years.”
Clamshells can and are recycled, but she says, “The fees they’re going to charge for produce like berries — I don’t know how many berry companies are going to be able to afford the fees.”
And this, she says will have an unintended consequence of higher food costs as growers will be forced to modify the packaging used. “Even though the law states that we couldn’t pass the costs onto the consumer, that’s a joke.”
Kelly says the fresh produce industry needs to get vocal about the unintended consequences this bill will have.
“They have to quit worrying about whether they look bad because they’re fighting an environmental law when in fact the environmental law is truly stacked to put them out of business,” he says.
And he says, sadly, legislative aides he’s had discussions with about this bill have admitted it’s flawed legislation. But Kelly says he’s been told by aides, “It has to be proven to be a disaster before we can change it.”
Delihant worries, too, that the exemptions that growers have will likely be contested in court by environmental organizations.
“They hate our exemption, our exclusion language,” she says.
A Costly Consequence for Not Registering
And while all of this sounds onerous and unclear, one thing Delihant wants to make certain is that any company that is likely a producer should register with CalRecycle or the Circular Action Alliance because the consequences are very steep.
“Even if they don’t have all the information requested in the form that is online, submit something. If you think you are a producer, submit something so at least they know that you’re aware and you’re not trying to hide,” she says. “Because it’s a $50,000 a day fine.”
Delihant says CalRecycle has been very helpful and has taken the approach that all parties involved in the Plastic Pollution Prevention and Packaging Producer Responsibility Act are learning.
“To their credit, they want to help people get in compliance, which is good,” she says.
She says that while fees won’t come out until January 2027, calculations will begin.
“The idea is to just register the covered materials that you anticipate you are responsible for,” she says. “But don’t worry about having all the information. Because nobody’s going to have all the information at hand at their fingertips because it’s by unit and by weight of the actual covered item. So how much did this film plastic weigh and how many units did you buy?”
