California's SB 54 Law Creates Packaging Liability Uncertainty

California’s SB 54 law requires produce packers to reduce plastic packaging and meet strict recycling targets, but many businesses are struggling to define their legal liabilities. The industry faces hurdles, including a lack of technical substitutes for plastic and conflicting state regulations.

The fresh produce industry is facing a period of intense regulatory pressure as California’s Extended Producer Responsibility (EPR) framework begins to tighten its grip. While many industry leaders assumed awareness of the law was universal, Kevin Kelly, CEO of Emerald Packaging, noted during a recent webinar that many businesses remain unaware of the specific implications of SB 54.

The confusion isn’t just about the law itself, but about who actually sits in the crosshairs of enforcement. Businesses are struggling to determine the legal definition of a “producer,” which dictates who is responsible for paying fees and managing mandatory reporting.

Defining the producer

The distinction between a brand owner and a brand licensee might seem simple on paper, but the actual application of SB 54 is far more intricate. This ambiguity leaves many midsize and smaller companies wondering if they are legally liable for the packaging they use to move goods through the supply chain.

Jeff Brandenburg, president of QFresh Lab, emphasized that while the regulations are difficult to parse, they cannot be ignored. He suggested that producers must begin by auditing their current materials to see where changes are actually possible.

“You should make changes. You should research these changes. Make sure that you’re not trading one set of problems for a different set of problems.”

The stakes involve more than just administrative paperwork; they involve the physical integrity of the food supply. Because produce is highly perishable and easily damaged, the industry relies heavily on plastic to meet food safety standards.

While the FDA does not mandate specific types of packaging, Brandenburg noted that whatever material is chosen must maintain the functionality required to keep food safe and prevent contamination.

The functionality gap

Moving away from plastic isn’t as simple as swapping one material for another. The industry is currently caught between the need for sustainability and the hard reality of food science. For example, adding post-consumer recycled (PCR) content to a film changes its physical properties.

A polyethylene film containing 30% PCR will behave differently than a film with 50% PCR, and both will act differently than virgin plastic. These changes can manifest as unexpected issues during the supply chain, potentially impacting how the packaging performs during transport.

The industry is also grappling with a legislative contradiction between SB 54 and AB 201. While SB 54 pushes for more compostable options, AB 201—set to take effect in June 2027—imposes strict technical standards on what can be labeled as “compostable.” Kelly warned that AB 201 could effectively limit the development of the very materials SB 54 encourages companies to use.

Plastic reduction and recycling goals face infrastructure hurdles

The state's timelines have caused anxiety within the sector. One of the most immediate hurdles is the requirement for a 10% reduction in plastic packaging by January 1, 2027.

Emerald packaging sb webinar — Photo: producemarketguide.com

Beyond simple reduction, the law sets ambitious recycling goals that many experts believe are currently unachievable for certain material types. Kelly believes a 30% recycling rate by 2028 is unlikely for flexible packaging or thermoforms because the necessary recycling infrastructure simply does not exist yet.

Requirement/Event	Target Date	Industry Context
10% Plastic Reduction	January 1, 2027	Immediate goal for source reduction.
AB 201 Implementation	June 2027	Strict standards for “compostable” labeling.
30% Recycling Rate	2028	Target for flexible packaging and thermoforms.

A growing national trend

California is not acting in a vacuum. Kelly pointed out that there are currently seven other states with their own EPR laws, and more are expected to follow. Each of these laws carries different reporting requirements, creating a complex patchwork of compliance for companies that distribute products nationally.

California's Bold Packaging Law: Major Changes by 2032!

Despite the tension, Kelly noted that his opposition is not to recycling itself, but to unrealistic timelines and rates that could threaten the survival of smaller businesses. He suggested that even if current legal challenges to these laws fail, the legislature will likely find ways to maintain the revenue, perhaps by reconfiguring the fees as a tax.

The current guidance from CalRecycle suggests that the state is looking for progress rather than immediate perfection. For now, the most practical path for producers is to register with the state, inventory their packaging, and begin searching for viable, functional alternatives.

The transition toward a circular economy in the produce sector is being shaped as much by the limitations of material science as it is by the mandates of the legislature.

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