California Implements SB 54 Exemption Pathway for Certain Food and Agricultural Packaging

Businesses using food and agricultural packaging may apply for a categorical exclusion from SB 54, California’s extended producer responsibility (“EPR”) program for packaging and plastic food service ware. But they must demonstrate their packaging meets specific criteria and provide substantial supporting evidence.

SB 54 requires CalRecycle, the implementing agency, to ensure its regulations avoid conflicts with federal regulations from the U.S. Food and Drug Administration and the U.S. Department of Agriculture. To accomplish this, CalRecycle allows producers to submit a Categorically Excluded Materials Notice (“Notice”), which would exclude identified packaging from the definition of “covered materials” in line with 14 CCR § 18980.2(a)(2). This means the packaging would not be subject to California’s EPR program.

First, a Notice needs to:

·      List each excluded packaging component, its function, its Covered Material Category, and its status as either for food or an agricultural commodity.

·      Describe each product associated with each packaging component (e.g., brand, SKU, UPC, or other identifying number).

·      Identify the specific provisions of SB 54 and a federal regulation, rule, or guideline that conflict for each packaging component.

 Applicants need the data for their packaging components and an understanding of what SB 54 specifically requires in order to identify where a conflict exists. CalRecycle will not publish information in the Notice that is properly identified as a trade secret.

Then, a Notice must:

• Explain the determination that it is “not reasonably possible” to use alternative packaging that avoids the cited conflict for each packaging component. Attach substantiating documentation.

Under 14 CCR § 18980.2(B), it is “not reasonably possible” to use a packaging alternative when:

  i. There is no such alternative that satisfies all applicable mandatory standards for safety and structural integrity of packaging, creates no new unavoidable legal conflict with any law, and otherwise is lawful to use in California;

 ii. It is not possible to avoid all legal conflicts by eliminating or replacing the components that cause the conflict cited in the notice; and

  iii. It is not possible to avoid all legal conflicts by redesigning or replacing the packaging as a whole.

This may be the most challenging part of the Notice criteria for an applicant to meet because applicants essentially must prove nonexistence. This likely requires documentation that shows potential alternatives have already been evaluated and rejected for a reason that fits into one of the “not reasonably possible” criteria.

CalRecycle guidance also includes material issued by government agencies, academic institutions, industry associations, and standard development organizations as examples of supporting evidence. Therefore, if a packaging component has not already undergone this type of alternatives analysis, an applicant may need to conduct or sponsor one in order to develop enough evidence for a Notice to be deemed “complete” (i.e., approved and effective).

CalRecycle has discretion to determine whether a Notice is complete. Applicants may resubmit after an “incomplete” determination. CalRecycle will publish the packaging components and associated products from complete Notices on a public webpage.

Once a Notice is complete, the exclusion applies without the need for each company or brand using the identified packaging components to submit equivalent Notices individually, so it is important for impacted companies to monitor this list or coordinate with parent companies, packaging suppliers, or trade associations to include their products’ packaging in a submitted Notice.

Submitting a successful Categorically Excluded Materials Notice requires a detailed understanding of (1) what California’s law and regulatory language means as applied to specific commercial scenarios and types of packaging, and (2) how CalRecycle and Circular Action Alliance intend to implement the EPR program.