Packaging Updates on Compostability, Extended Producer Responsibility (EPR) and Microplastics

At a Glance

• Because of CalRecycle’s extension of AB 1201’s implementation for “products that contain synthetic substances that otherwise satisfy all requirements for lawfully being labeled ‘compostable,’” the USDA National Organic Program criterion will no longer disqualify a package from using the term compostable at the start of 2026 so long as the other AB 1201 criteria are met. 
• Deadlines for Colorado’s Producer Responsibility Program for Statewide Recycling Act are in effect and advancing. Effective July 1, producers can no longer sell or distribute products that use covered materials in Colorado unless they participate in the Producer Responsibility Program. Obligated producers are also required to submit calendar year 2024 data to their PRO by July 31, 2025.
• California will require producers to develop and meet specific source-reduction targets. Producers obligated under California’s EPR law should continue to monitor the state’s rulemaking and review new guidance expected in fall of 2025. 
• The California Department of Toxic Substances Control announced in June 2025 that it is seeking to add microplastics to its Candidate Chemicals List. This move would allow the agency to identify and evaluate consumer products — including packaging materials — that contain or generate microplastics.

Spring of 2025 brought new standards for recyclability, the first reporting deadline for extended producer responsibility (EPR) for packaging in the United States, and a host of other state-driven regulatory updates regarding packaging. This summer continues the trend with revised deadlines for California’s compostability definition, additional EPR reporting obligations, and a new proposal regarding the regulation of microplastics. 

California Compostability Requirements

California’s AB 1201, which passed in 2021, regulates the use of the terms “compostable” and “home compostable” in the state. AB 1201 will require that compostable material be an allowable agricultural organic input under the requirements of the USDA National Organic Program (NOP), despite this criterion not being widely used by industry and despite USDA’s delay in considering additions to the NOP. 

The law was set to apply beginning January 1, 2026, but the California Department of Resources, Recycling, and Recovery (CalRecycle) recently responded to a request from the Biodegradable Products Institute (BPI) to delay implementation with respect to “products that contain synthetic substances that otherwise satisfy all requirements for lawfully being labeled ‘compostable,’ including the requirement that products meet an ASTM standard specification…” This is good news for industry. An extension was granted until June 30, 2027, in order to give USDA time to review materials accepted under the NOP. The extension may be renewed but shall not extend beyond January 1, 2031. Because of this extension, the NOP criterion will no longer disqualify a package from using the term compostable at the start of 2026 so long as the other AB 1201 criteria are met. 

Colorado and California EPR Reporting

Colorado

Colorado’s Producer Responsibility Program for Statewide Recycling Act, the state’s EPR law, requires covered producers of packaging and paper products to join a producer responsibility organization (PRO), which manages and funds the end-life of those materials and focuses on increasing the use and investment in recycling and recycling infrastructure. 

Under Colorado’s EPR law, by July 1, 2025, a producer can no longer sell or distribute products that use covered materials in Colorado unless they participate in the Producer Responsibility Program. Obligated producers are also required to submit calendar year 2024 data to their PRO by July 31, 2025. They will then pay producer responsibility dues in January 2026 and annually each subsequent year. Notably, Colorado’s EPR law excludes business-to-business transport packaging (i.e., shipping packaging).

On June 30, 2025, Circular Action Alliance (CAA), the approved PRO in the state of Colorado, submitted an amended program plan proposal to the Colorado Department of Public Health & Environment (CDPHE), which is under review by the advisory board for Colorado’s Producer Responsibility Program. After the advisory board provides a final recommendation to CDPHE, the public comment period will open on CAA’s amended plan.

California

California’s SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act is the state’s EPR law. In March 2025, Governor Gavin Newsom directed CalRecycle, the agency responsible for implementing SB 54, to restart its rulemaking for SB 54. On July 1, 2025, CalRecycle released its latest draft of regulations for SB 54. While these new regulations are not finalized, CalRecycle anticipates that these regulations, with possible minor adjustments, will undergo the formal rulemaking comment period in California. Even though the regulations are not final, the statutory deadlines and targets set in SB 54 remain in effect. 

As a result of CalRecycle’s reopening of SB 54 regulations, industry is grappling with uncertainty regarding the timing and scope of California EPR reporting. CAA, which is also the PRO in California, has expressed its willingness to adapt its implementation strategy as needed. Currently, CAA set a reporting deadline of November 15, 2025, to report 2023 data in California. This year, producers will not be charged California EPR fees based on their 2023 data because CAA is using the 2023 data as a baseline for source-reduction goals and fee estimates for future years. By contrast, next year (in 2026), producers will report their 2025 data to California and pay fees based on the 2025 reported data. CAA’s guidance regarding California reporting is expected in or around September 2025.

California will require producers to develop and meet specific source-reduction targets. SB 54 requires a producer to submit an individual source-reduction plan, which includes determining the amount of covered material it source-reduced dating back to January 1, 2013.¹ Producers with compliance obligations under California’s EPR law should continue to monitor the state’s rulemaking and review CAA’s new guidance expected this fall. 

DTSC Proposal Regarding Microplastics

The California Department of Toxic Substances Control (DTSC) announced on June 20, 2025, that it is seeking to add microplastics to its Candidate Chemicals List. This move would allow the agency to identify and evaluate consumer products — including packaging materials — that contain or generate microplastics, defined as plastics less than 5 millimeters in their longest dimension. While the proposal does not immediately regulate any products, it is an important first step toward possible future regulation under California’s Safer Consumer Products Program. If microplastics are formally listed as a Candidate Chemical, packaging products containing or generating these materials could be subject to further review and potentially designated as Priority Products, which would require manufacturers of those products to conduct an Alternatives Analysis or comply with other regulations.

Packaging producers and suppliers should closely monitor this regulatory development, as it signals increasing scrutiny on the role of packaging in microplastic pollution. The public comment period for this proposal is open through August 4, 2025. Early review of product formulations and proactive exploration of alternatives may help reduce future compliance risks. More information on the proposed rule can be found in DTSC’s Rulemaking Package.