California EPR law taking shape but chemical recycling a sticking point

As California faces key decisions on its landmark extended producer responsibility law for plastic packaging, environmental groups and lawmakers are urging the state to "stay the course" while plastics companies are arguing for flexibility.

Some environmentalists, for example, say they're worried that the industry wants to reopen rules for chemical recycling, among other topics, that they say were settled when the state Legislature passed the law in 2022.

Environmental groups and legislators who back the law, known as Senate Bill 54, are telling the state agency CalRecycle, which is charged with implementing the complex law, that it needs to finish detailed regulations ahead of a March 8 deadline.

"It is critical that we not delay advancement of SB-54," according to a recent letter to Gov. Gavin Newsom from 14 state lawmakers, including the prime author of the law in the state Senate.

Some environmental groups believe industry is trying to renegotiate parts of SB-54 in the regulatory process.

"Some of the things I've heard being requested of the Legislature and of the governor's office are renegotiations of decisions that were made in statute, whether that's chemical recycling, definition of producer, [and] some other core things that were negotiated in SB-54 and that were part of the deal for withdrawing the ballot measure," said Nick Lapis, director of advocacy at Californians Against Waste, at a Feb. 21 CalRecycle public meeting on SB-54. "I think it goes beyond technical clarifications in the regulations."

As part of the compromises that led to SB-54 passing three years ago, environmental groups agreed to withdraw their plans for a statewide ballot referendum that would have put a 1-cent tax on all single-use plastics and banned expanded polystyrene foodservice.

Plastics groups vehemently opposed that referendum.

Some plastics companies and industry groups argue that the state is making a mistake in its draft SB-54 regulations by setting up hurdles for chemical recycling technologies.

Eastman Chemical Co. argued in a Feb. 7 sponsored article on the website of the Sacramento Bee newspaper that the state won't be able to meet key goals in SB-54 — such as a 65 percent recycling rate for single-use plastics by 2032 — unless regulations are open to chemical recycling.

"The current plan to implement SB-54 puts innovation and environmental progress in jeopardy," said Sandeep Bangaru, vice president of circular economy platforms at Eastman. "By continuing to depend on mechanical recycling alone, California will never achieve these ambitious and important recycling targets."

The law also includes targets for reducing plastic packaging by 25 percent by 2032 and having 4 percent of packaging switch to reusable or refill models by 2030.

But Eastman argued new recycling technologies will still be needed.

"The circular economy envisioned by SB-54 requires not just reduction and reuse but also cutting-edge, environmentally efficient recycling processes," Bangaru wrote. "To achieve these high expectations, new solutions are needed to address the growing plastic waste crisis, and innovative technology like Eastman's can pick up where mechanical recycling leaves off."

The role of chemical recycling in SB-54 has been a concern of industry groups.

A coalition of 40-plus industry associations, including the American Chemistry Council and the Plastics Industry Association, argued in November comments to CalRecycle that draft SB-54 rules would create a "cumbersome" certification process that will slow down use of new recycling technologies like chemical recycling.

"This limits recycling technologies that are needed to augment conventional mechanical recycling in order to achieve the state's ambitious goals as set forth in SB-54," the coalition, led the California Chamber of Commerce, said. "For example, instead of landfilling mixed or soiled plastics, advanced recycling technologies can place these plastics back into products for consumer use."

The coalition also argued that the regulations weren't providing proper exemptions for food safety when federal mandates precluded recycling or composting options.

And it urged CalRecycle to be flexible with recycling targets in the law, like a requirement that plastics packaging hit a 30 percent recycling rate by 2028.

SB-54 could be "an enormous burden for industry at a time when businesses are navigating inflationary pressures," the chamber-led group said.

Companies "will only have a short amount of time to collect funds, invest in materials recovery facilities, and establish end markets before the first deadline is triggered on Jan. 1, 2028 for 30 percent of plastic-covered material to be recycled," the group said.

"We implore the department to carefully evaluate progress … in order to consider possible adjustments to the recycling rates and dates," it said, adding the coalition members are dedicated to working with the state to achieve SB-54's goals.

SB-54 also includes a de-facto ban on EPS foodware, requiring it to be recycled at a 25 percent rate this year — a target many see as impossible — or not be sold in the state.

The law covers single-use packaging made from other materials but puts extra requirements on some plastics.

But environmental groups and some local government waste management agencies said SB-54 needs to move ahead so that companies are forced to take more financial responsibility for the disposal costs of their packaging.

"SB-54 is actually an affirmative effort to arrest the rising costs of waste management born by everyday Californians," said Anja Brandon, director of plastics policy for Ocean Conservancy. "EPR, as a system, gives producers an opportunity to control costs that they have to pay by reducing their packaging and using better materials."

She told the CalRecycle hearing Feb. 21 that studies have not found that EPR increases costs to consumers.

A representative of a local government agency coordinating waste management in Alameda County, Stop Waste, told the hearing that it's "imperative" that CalRecycle finish the SB-54 rules and send them to the state's Office of Administrative Law by a March 8 deadline.

"We need to get to the point where we can tell the public that their materials are being sent to responsible end markets and recycling is being done in a transparent, trackable way," said Michelle Fay, the group's program manager. "We feel we can do that with these regs."

Similarly, the 14 state legislators who wrote to Newsom said the compromises that led to SB-54 passing were the result of "painstaking" negotiations to reach consensus on rates, dates, definitions and enforcement.

The lawmakers, including SB-54's chief author Sen. Ben Allen, D-Santa Monica, and the chair of the Senate Environmental Quality Committee, Sen. Catherine Blakespear, D-Laguna Hills, said CalRecycle's draft regulations "are consistent with state law and reflect legislative intent."

"It is imperative that California continues to move forward and meet the timelines established in the law," the lawmakers said in their Feb. 6 letter. "As tough decisions are being made, we should stay the course."