CalRecycle Releases New EPR Packaging Regulations: Imminent Compliance, New Exclusions, and Deferred Eco-Modulation Implementation

A lot is going on in the extended producer responsibility (“EPR”) packaging world this month.  Maryland and Washington became the sixth and seventh states respectively to enact EPR packaging laws.  And this week, just a little over two months after Governor Newsom rejected the last set of CalRecycle’s proposed regulations, CalRecycle released its new proposed rules for California’s EPR packaging program. 

The new proposed regulations largely build on the last round of regulations with targeted edits addressing specific concerns raised by stakeholders while leaving other controversial provisions intact.  The proposed rules also present an expedited schedule for compliance: producers must register with CalRecycle and the producer responsibility organization (“PRO”) and submit supply data to the PRO within 30 days after the rules become effective.

If, as expected, the proposed rules are finalized after a 45-day comment period (and other procedural requirements are satisfied), the regulatory time period for compliance could be only months away. Meanwhile, whatever the disposition of the regulations, Circular Action Alliance (“CAA”), the California PRO, as of May 22, 2025, just published a press release setting a preliminary data reporting deadline of November 15, 2025 (extending their previous deadline of August 31, 2025).  While CAA does not have direct enforcement authority, CAA has considerable authority over compliance management in multiple state programs where it is the PRO; producers entering into a long term relationship with CAA may want to make best efforts to meet CAA’s reporting deadline to help facilitate CAA’s development of fee schedules in California.

EGC is still reviewing and digesting the proposed changes but we note here a few of the more significant new provisions. The proposed regulations categorically exclude packaging “that is necessary to comply with rules, guidance, or other standards issued by the United States Department of Agriculture [USDA] or the United States Food and Drug Agency [FDA].”  Because both the USDA and the FDA have extensive requirements for food packaging materials, the scope of this exclusion could be significant and potentially implicate virtually all food packaging (albeit food service ware is not subject to this exclusion). The proposed rules also make major revisions to the reuse and refill provisions, which were the subject of significant criticism under the prior regulations, with some businesses asserting the prior requirements were simply unworkable.

As requested by CAA, the new proposed rules also defer the implementation of eco-modulated fees for the first couple of years of the program.  This approach would serve to defer rewards for those companies who have already begun shifting to more sustainable packaging but would provide CAA some time to fine tune the eco-modulated fees to create meaningful incentives for industry as a whole.

The deferral of eco-modulated fees would also appear to defer implementation of another controversial provision - the mandatory malus fee for packaging that contains a Proposition 65 chemical.  However, this mandatory malus fee provision otherwise remains intact.  See Proposed Regulations Target Proposition 65 Chemicals in Packaging, EGC, January 21, 2025.

Other significant edits include new language to define producers and food service ware. These edits provide greater clarity on the definition of a producer and the distinctions between food service ware and packaging and the different producer responsibilities associated with each covered material.  

In conclusion, as it appears that California’s program is ready to go live in the near future, businesses should seize this opportunity to ensure they are ready to comply and to minimize their fees by carefully evaluating their producer status, the specific definitions of packaging as applied to their product portfolio, and the sales pathways for which they are responsible as a producer.  Each of these issues could be impacted by the new proposed regulations and may differ from the other EPR states.