US and International Developments in Plastics Stewardship Regulation

This year has seen significant developments in the global regulatory landscape for plastics. Recent and upcoming actions build on changes that went into effect last year, discussed in our previous client alert. The following is an update on developments in plastics stewardship laws in California, at the US federal level, and in the European Union. In an increasingly complex regulatory environment, businesses and organizations involved in plastics and recycling need to stay informed to remain compliant and mitigate legal risk.

California Developments

“Bottle Bill” Expansion (SB 1013, SB 353, and AB 793)

California’s Beverage Container Recycling Program, also known as its “Bottle Bill,” was recently expanded. The Bottle Bill regulates California Redemption Value (CRV) deposits and associated labeling requirements for covered beverage containers. SB 1013 and SB 353, which largely went into effect in January 2024, expanded the Bottle Bill’s deposit and labeling requirements to most containers for wine, distilled spirits, and fruit and vegetable juices. Dealers of the newly covered beverages were required to update their shelf labels, identifying applicable CRVs, by January 15, 2024, and manufacturers will be required to update their product labels by July 1, 2025.

Postconsumer recycled content (PRC) requirements for beverage containers sold in California will also soon become more stringent. The Bottle Bill currently requires all covered beverage containers sold in California to be made of at least 15% PRC. This PRC minimum will increase to 25% on January 1, 2025. According to a CalRecycle report published last year, many small brands and several large brands did not achieve 15% PRC in 2022. CalRecycle has not published 2023 data yet, but as of March 2024, companies that continue to fall short of the target can now be subject to administrative penalties of up to 20 cents for each pound the company falls short of the target. 

Extended Producer Responsibility Phase-In (SB 54)

As more fully detailed in our client alerts from 2022 and 2023, California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54) creates an expansive “extended producer responsibility” (EPR) scheme for producers of single-use packaging and food service ware offered for sale, distributed, or imported in or into California. Under SB 54, covered producers will need to join and pay fees to a producer responsibility organization (PRO) starting in 2027. Producers will also be required to comply with recyclability, compostability, and source reduction mandates, most of which will commence in 2032. CalRecycle published draft regulations implementing SB 54 on December 28, 2023. The public comment period for the regulations closed on May 8, 2024, and CalRecycle is required to publish its final implementing regulations by January 1, 2025.

Earlier this year, CalRecycle approved the Circular Action Alliance as the state’s first PRO. The draft regulations, if finalized in their current form, would require the PRO to submit a plan for achieving SB 54’s source reduction and recyclability targets by April 1, 2026. CalRecycle will then review and approve the plan by January 1, 2027. Once the PRO’s plan is approved, producers must join and begin paying fees to the PRO, which in turn will be responsible for the cost of implementing the plan and paying an additional $500 million annual fee to CalRecycle.

“Truth in Labeling” Law (SB 343)

SB 343, passed in 2021, prohibits the use of untruthful, deceptive, or misleading recycling claims about consumer goods. The law applies to all entities that sell, distribute, or import consumer products or packaging in or into California. Under SB 343, CalRecycle is required to finalize a “material characterization study” identifying the types of materials most commonly recycled. CalRecycle published a Preliminary Findings Report in December 2023, and the final material characterization study is expected sometime in 2024 or 2025. Eighteen months after the final study is published, the use of the “chasing arrows” symbol around Resin Identification Codes will be prohibited on products not considered recyclable under new statewide criteria. Given the current state of the material characterization study, the new restrictions are not likely to take effect until 2026. 

US Federal Developments

FTC Green Guides

Sometime this year, the Federal Trade Commission (FTC) plans to release its update to the Green Guides, 16 CFR § 260, which advise companies on how they should make environmental marketing claims relating to their products. The Green Guides are not binding on companies, but the FTC can reference them in the exercise of its general enforcement powers. The new Green Guides may require greater claim substantiation regarding recycled content and when using terms like “eco-friendly,” “non-toxic,” “recyclable,” and “carbon-neutral,” and the “chasing arrows” symbol to denote a product’s recyclability. Updated claims substantiation standards could include life cycle assessments to evaluate products’ environmental impacts through all stages of their life cycle, from raw material to disposal.

EPA Strategy to Prevent Plastic Pollution

Last year, the US Environmental Protection Agency (EPA) released its Draft National Strategy to Prevent Plastic Pollution. The draft strategy is primarily focused on voluntary cuts to single use plastics manufacturing by producers. The draft strategy has received criticism from all sides concerning how best to tackle and allocate the costs of reducing plastic waste and pollution. Environmental groups have denounced the draft strategy for not mandating cuts to the production of single-use plastics, while plastics industry groups have criticized its lack of emphasis on promoting recycling as an alternative. The EPA has not indicated when it plans to release the final version of the strategy.

European Union Developments

EU Plastics Regulation

In March 2024, the European Commission released its latest proposed amendment to the European Union (EU) Plastics Regulation, No. 10/2011. The 18th amendment to the EU Plastics Regulation would apply to all plastic articles intended to come into contact with food sold in the EU. The proposed changes aim to curb contamination in plastics made from recycled or waste materials, increase purity standards for all plastic food packaging (including by limiting the use of per- and polyfluoroalkyl substances in food packaging), and make changes to documentation and testing standards. The amendment would also require durability information and use instructions for plastic articles intended for repeated use. The European Commission plans to adopt the final form of the amendment sometime during the fourth quarter of 2024, and producers would have eighteen months to comply.

The latest proposed amendment to the EU Plastics Regulation follows the adoption of two amendments last year: No. 2023/1627 and No. 2023/1442. These amendments added to, and removed from, the EU’s list of approved substances several chemicals for use in plastic food packaging.

In April, the European Parliament and Council also reached a provisional agreement on the Packaging and Packaging Waste Regulation, which would require all packaging used in the EU to be recyclable, set restrictions on plastic packaging, and ban the use of PFAS in food packaging. The Parliament and Council still need to formally approve the agreement before it takes effect.

EU Ecodesign for Sustainable Products Regulation

The EU’s new Ecodesign for Sustainable Products Regulation (ESPR) went into force in 2024, establishing a framework for the EU to adopt a wide range of sustainability requirements in the coming years covering nearly all consumer goods sold in the EU. Future requirements will likely include minimum standards for recycled content, carbon footprint, and durability, along with additional information requirements, including digitally accessible product labels. Finally, among other measures, the ESPR will likely prohibit the destruction of many unsold consumer goods or their components. The EU will soon begin adopting transitional standards, with the first regulations under the framework expected sometime during 2026.

UN Negotiating Committee on Plastics Pollution

The United Nations Environment Programme Intergovernmental Negotiating Committee on Plastics Pollution conducted its fourth treaty negotiation session at the end of April 2024, with 170 member countries present. The session produced a working draft of the treaty and confirmed that the Committee plans to issue a proposed, final treaty by year end. The draft treaty provides for an international commitment to reduce the production of primary plastics polymers (PPP) and enhance recycling and reuse. Subcommittees will work on a number of issues this summer, including developing financing mechanisms and identifying chemicals of concern to be singled out both for plastic product redesign and pollution controls for recycling/reclamation plants.

The global regulatory landscape for plastics and recycling continues to undergo rapid transformation as state, federal, and international governments confront challenges posed by plastic waste management. Their approaches often vary in complex ways, and businesses that operate across jurisdictions need to stay informed to remain compliant, mitigate legal risk, and achieve stewardship goals. We will continue to monitor developments in this area of the law and provide regular updates.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. John Rousakis, an O'Melveny partner licensed to practice law in New York; Eric Rothenberg, an O'Melveny of counsel licensed to practice law in New York and Missouri; and Chris Bowman, an O'Melveny associate licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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