Industry Challenges in California

Foodservice packaging is increasingly coming under attack through product bans and new regulations across North America. Most notably in 2019, the industry faced its biggest challenge in California.  Proposed early in this year’s legislative session, Assembly Bill 1080/Senate Bill 54, by Assemblywoman Gonzalez and Senator Allen, would have provided unprecedented authority to CalRecycle to set potential product bans and regulate foodservice products (and other single-use packaging made from all materials) throughout the state.

This proposed legislation went through many iterations, including weekly amendments for the two months leading up to the end of the legislative session on September 13th. The proposed legislation was moved to the inactive file, after failing to reach consensus in the final days of the legislative session. However, the bill will be brought up again in January 2020.

To our industry, the most concerning portion of the legislation was a late amendment that singled out paper and plastic foodservice packaging as a priority item. Producers would be required to conduct significant source reduction and provide only recyclable or compostable packaging. Some other points in the proposed policy included:

  • Granted CalRecycle unprecedented authority to propose an extended producer responsibility (EPR) plan; impose fees on manufacturers; and ban specific priority single-use items;
  • Proposed timelines for implementation that failed to take into consideration the amount of time needed to build recovery infrastructure and supply chain product line shifts;
  • While source reduction was set at 75 percent by 2030, the timeline (and which products were included) was not adequately defined or laid out in the plan;
  • The burden for reporting and compliance would have been placed on manufacturers; and
  • An analysis from the California Department of Finance said the costs to the state would be unsustainable over the long term, forcing CalRecycle to hire at a minimum 46 new employees and spend over $6.3 million annually in what were essentially accounting costs. It should be noted that there was no funding mechanism included in this legislation.

In response to this legislation, an expansive coalition was assembled to both work alongside the sponsors and also voice significant concerns over how plausible the implementation was to the extreme costs that would be associated with it. The coalition represented all aspects of the industry, including all of the product sectors. The coalition supported California doing more to address building recycling and composting infrastructure in the state, reducing pollution, addressing waste education and labeling, and increasing the use of recycled content, but did not believe this proposal was the best pathway to do so. The legislation was essentially tabled until 2020, and the debate will be continued in 2020 – most likely leading to the passage of what will be some form of legislation that will dramatically impact our industry.

In the meantime, through the passage of SB 1335 in 2018, CalRecycle has been authorized to promulgate rules related to the approval process for foodservice packaging that is used in state facilities. Specifically, the regulations will set requirements that determine which foodservice packaging items are reusable, recyclable and compostable and authorize their use in state facilities. A proposed draft will be issued later this month/or early November for official comments. FPI will plan to comment on this proposal.

Additionally, in the absence of statewide bills, several municipalities moved forward in the last month with their own regulations on foodservice packaging, furthering the already complex patchwork of laws in California. If you are a member of FPI, make sure you receive FPI’s monthly “Legislative and Regulatory Report” to keep up with the latest in California and beyond.California map

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