This week marks the next deadline in California’s implementation of SB 54, or the plastics reduction act. By Aug. 1, companies must file a plan with the Circular Action Alliance that outlines a roadmap for reducing single-use packaging.
Kevin Kelly, CEO of Emerald Packaging, says that the produce industry is still severely lacking in awareness of this regulation and its impact on produce businesses across the country.
“We live in an echo chamber,” he says. “We think everybody knows about SB54, but in fact, not everybody does to this day.”
Gail Delihant, Senior Director of California Government Affairs for the Western Growers Association, says that while awareness of the regulation continues to spread, she still gets phone calls from members that ask her, “Does this apply to me?”
Kelly says an example is potato packers in Idaho who have struggled to understand the requirements of SB 54 and registered as a producer for the July 1 source reduction baseline reporting deadline at the last minute.
“Almost not a single report has been filed out of there,” he says of the plastics reduction plan.
Delihant says this lack of awareness is a challenge as these reporting deadlines near.
“A lot of our members are like, ‘How do I even do this and when is that [deadline]?” she says.
And some growers, Kelly says, have started to realize the total weight of these reporting deadlines.
“They’re freaking out whether they’re getting fines or not because they’re just realizing everything they have to report,” he says. “Many didn’t register till the last day when reports were also due. They aren’t ready with plastic reduction programs.”
Good-Faith Plans Over Perfect Redesigns
Victoria Lopez, marketing and business development manager for Fox Packaging, says it’s important for growers to understand the deadline is about the plan and a good-faith effort the company shows in working toward source reduction.
“A credible plan filed on time is better than a perfect plan filed late,” she says. “The 2023 baseline matters as much as the plan itself, so if your baseline data is thin, fix that now.”
Iliana Csanyi, sustainability manager for Fox Packaging, agrees, noting she’s told growers the source reduction plan needs to be a credible roadmap, not a finished redesign.
“There are several recognized pathways to source reduction, including lightweighting, right-sizing, format changes such as moving from rigid to flexible, and increasing recycled content,” she says. “Many growers are closer to the 2027 target than they realize, because flexible packaging already uses a fraction of the material of rigid alternatives per pound of produce. Our role is to help them document what their current packaging already achieves and identify where the next reduction realistically comes from, rather than promising changes their operation cannot absorb.”
The Central Question of Who Is a Producer
Delihant says many produce industry businesses still struggle with understanding who the responsible party or producer is because of how vertically-integrated some produce businesses are while others are not.
“We are either vertically integrated or we’re not,” she says. “It’s all over the map.”
Melanie Turner, SB 54 communications and media manager in the Office of Public Affairs for CalRecycle, says the determination of a producer includes the location of that entity, whether it has the right to be the only seller or distributor in all or part of the state. She also notes that entities that engage in field pack operations are typically excluded from the law.
“A person who produces, harvests and packages an agricultural commodity on the site where the agricultural commodity was grown or raised is excluded from being a producer,” she says. “The material is still covered material and subject to the requirements applicable to covered material, but the responsibility of producer goes to another entity in the supply chain. The material may be eligible for exemptions or exclusions.”
She also points to CalRecycle’s Producer Guidance webpage with resources such as a screening tool to help identify if a company is a “producer” and therefore regulated by the law.
Kelly says there’s also some confusion about whether the field-pack protection covers auxiliary packaging such as pallet wrap and boxes and bins in field pack.
Delihant says many growers have been waiting to hear back about exemption petitions filed, too.
“The plan has some packaging that’s phasing out, which we absolutely need to use,” she says.
She points to waxed cardboard boxes with plastics, which she says she’s been working to educate CalRecycle on the critical need for these types of packaging in fresh produce.
Testing Timelines and Inverse Fee Penalties
A major challenge for the industry is that a change in produce packaging takes time, Csanyi says.
“A material change has to go through a lot of testing, shelf life, moisture and respiration performance, seal integrity, and how it runs on the customer’s existing packline, because it has to protect a highly perishable product through the whole supply chain.”
She says this can take months before a single commercial run and “that timeline does not compress just because a filing deadline exists.”
Another challenge to implementing more sustainable packaging, says Aaron Fox, executive vice president of Fox Packaging, is that often the EPR fees are the highest for materials that promote the best shelf life and reduce food waste.
“Some of the most sustainable, highest-performing structures in produce end up in the ‘Other’ category precisely because they are innovative,” he says. “Associations like IFPA and Western Growers have been clear on this point, that EPR frameworks should be material agnostic and should not penalize packaging formats that perform well in food protection.”
And Delihant says there will likely be dire consequences as growers realize the totality of these source reduction plans and SB 54, noting “I have some asparagus growers that I’ve talked to over the last several weeks and they’re just not going to ship into California anymore.”
She suspects this source reduction plan will likely cause a shift away from bagged produce and more to bulk.
“What I’m most concerned about is the highly perishable vegetables that really need to be in some type of plastic packaging so that by the time I get it home and put it on my table and use it, it’s still fresh,” she says.
Data Mapping Challenges and Multi-State EPR Confusion
Kelly says what has exacerbated growers and produce industry businesses in the compliance journey is what he says is a lack of effort to communicate what the responsibilities are. And worse for produce industry businesses, “They’re not getting information from their [packaging] suppliers,” he says.
He says most produce businesses don’t understand there’s seven states with Extended Producer Responsibility in some form and three with current reporting responsibilities and Minnesota requiring reporting later this year. Kelly says many growers also lack the awareness of how to generate these plastic reduction plans.
“The grower community is completely lost except for, I would say a handful of companies,” he says.
Csanyi says packaging manufacturers should be able to provide produce businesses with component-level reporting on weights, materials, and resin chemistry. She says Fox Packaging has built out its specification documentation for its customers to file reduction plans. A challenge, she says, is that each state defines materials and metrics differently.
“The same bag can require different answers depending on where the product ships, which multiplies the work for anyone selling across state lines,” she says.
But the bigger challenge, she says, is interpretation by growers.
“Growers receive the data and are not always sure how it maps to reporting categories, so a lot of our conversations now are less about the bag and more about walking through what the numbers mean,” she says. “That is a role packaging suppliers need to accept as part of the job now.”
Cross-Border Delinquency Notices and Administrative Lags
The Circular Action Alliance says each covered company is responsible for determining its obligation status and providing information required by state programs.
“CAA’s shared producer account is designed to make participation easier for producers that may operate across multiple CAA-administered programs by allowing information to be managed in one place,” the organization says.
Kelly says the idea was that SB 54 compliance would be a California-centric legislation but that’s not the case.
“This is a California program that’s a nationwide program,” Kelly says.
He says although he registered Emerald Packaging to learn more about the program and to help his growers, he’s started to get delinquency notices. He says that’s happened to other growers in California who have received delinquency notices from Oregon or Colorado.
“They sent delinquency letters to everybody who filed as a producer in California,” he says. “Then you have to go through an appeals process, and CAA admits in its return email that they have a small staff, and it’s going to take them time to answer questions. And before they get to your question, deadlines may have already passed.”
CAA says “data submitted for one state does not determine a producer’s status in another state” and the organization is “actively working to enhance the registration process so that producers can more easily identify applicable states.”
How Aggregate Reduction and Malus Fees Work
Delihant says what’s going to happen after the Aug. 1 deadline is that the Circular Action Alliance will take all input and will add it up to see if it meets the 25% source reduction goal set out in SB 54.
“This is not a business by business by business analysis,” she says. “This is on the whole.”
Those companies that don’t meet the 25% reduction will be charged malus fees and those companies that can source different packaging will get a bonus.
The Circular Action Alliance says that despite reports of a delay the promised five-day turnaround in response times near critical deadlines, it is “prioritizing deadline-sensitive inquiries and directing producers to available producer guidance, resources and support channels.
“CAA’s support is intended to help producers navigate program requirements, but it is not a substitute for a company’s own legal or compliance determination,” the organization said. “Individual companies remain responsible for determining if and how they are covered.”
CalRecycle, too, says it provides producer guidance material on its website and distributes information through listservs that total 4,100 recipients. It also monitors a dedicated packaging email for questions.
CAA says the organization has seen increased inquiries near deadlines, specifically around California registration, materials reporting and source reduction. The organization says it deploys direct support, published resources and escalation pathways for more complex issues.
“Our focus is on getting producers clear direction as quickly as possible,” the organization said in a statement.
Turner says producers have the flexibility to choose the most cost-effective way to manage the materials used in the produce sold into the state “by redesigning packaging for recyclability, investing in recycling systems, or reducing single-use plastics.”
A Dial Not a Switch as Public Comment Continues
She also points out “the program provides exclusions and exemptions that offer compliance pathways for eligible producers and materials and the ability to make adjustments along the way.”
And, she says it’s important for growers to understand “The program’s rollout is a dial, not a switch.”
Lopez says it’s important for companies to understand this Aug. 1 deadline is just the first of many source reduction targets so this is not a one-and-done type of plan.
“Source reduction targets step up through 2032, so the growers who come through this well are the ones treating packaging data as an ongoing operational discipline, the same way they treat food safety records,” she says.
Lopez also points out that the producer responsibility organization’s program plan is still up for public comment. While she strongly encourages growers to meet that filing deadline, she says the framework from which to comply is still being shaped.
“The comment period is the industry’s chance to get its operational realities into the record, directly or through associations like IFPA and Western Growers, and we encourage growers to use it,” she says.
