Packaging Sustainability and Compliance, Including Extended Producer Responsibility (EPR)

At a Glance

• Laws in pursuit of environmentally sustainable packaging are on the rise.
• EPR programs face significant constitutional challenges in multiple states, raising fundamental questions about fee-setting authority, delegation to private entities, and the boundaries of state regulation of interstate commerce.
• Pending litigation does not currently provide grounds for non-NAW producers to delay or avoid compliance in any state. Producers should maintain full compliance with packaging laws, including EPR, while monitoring litigation developments.
• When assessing the environmental impact of packaging, companies should also consider chemicals of concern, such as PFAS and microplastics.

Overview

In the last four years, several statutes and regulations were enacted to address the environmental sustainability of packaging. These laws are aimed at improving circularity, reducing single-use plastic, prohibiting chemicals of concern, enhancing recycling infrastructure, stimulating recycling markets, and driving innovation. Such laws institute significant compliance burdens on manufacturers of packaged products. For example, Extended Producer Responsibility (EPR) laws place the burden on companies to fund end-of-life management for their product packaging.

Seven states — Maine, Oregon, Colorado, California, Minnesota, Maryland, and Washington — have now enacted comprehensive EPR packaging laws, and the landscape is evolving rapidly with active litigation in three states. Additionally, New Jersey's Recycled Content Law establishes minimum thresholds for recycled content in several plastic and glass containers, and the delayed implementation with respect to food packaging ends in January 2027. Rather than mere environmental initiatives, packaging sustainability has become an important business consideration affecting product development, distribution, and financial planning, particularly for companies operating across multiple jurisdictions.

EPR at a Glance

To comply with EPR laws, companies must assess in each state (1) whether they qualify as a "producer" and (2) whether their packaging is considered "covered material." Most states define "producer" using a hierarchical approach: the first obligated entity is generally the manufacturer and/or brand owner or licensee of a packaged product. If none of these are US entities, the first importer or distributor of the packaged product into the state is typically the obligated producer. California's hierarchy differs in that the manufacturer/brand owner or licensee must be "in the state" of California to be the obligated producer. Each state also provides exceptions for small or de minimis producers based on revenue or material volume thresholds.

Once a business determines that it is a producer in a state, it must review its product packaging to determine whether it meets the state's definition of "covered material." These definitions vary by state — each generally targets single-use consumer packaging but includes unique exemptions. In addition, Oregon and California include most business-to-business packaging in the scope of covered materials. Producers of paper products and food serviceware may also have obligations.

After making these determinations, regulated businesses must register with the Producer Responsibility Organization (PRO) and submit the required data. In most states, this requires reporting the types and weights of covered materials supplied to the state during the prior calendar year. In California, additional source reduction reporting and planning is required with respect to single-use plastic. To date, the nonprofit Circular Action Alliance (CAA) is the approved PRO in the US for paper, food serviceware, and most packaging, though additional PROs could be approved in some states.

EPR State Program Summaries

Oregon

The Plastic Pollution and Recycling Modernization Act (enacted 2021, effective July 2025) covers paper, packaging (broadly defined to include most business-to-business packaging), and food serviceware. Producers are required to have registered and reported 2024 and 2025 packaging year data to CAA, the only approved PRO. Enforcement falls to the Oregon Department of Environmental Quality (DEQ), which can impose fines of up to $25,000 per day, per violation, and noncompliant producers may be barred from selling covered products in the state. The Oregon DEQ is beginning enforcement and in April published a list of producers flagged as noncompliant. Oregon's EPR law is currently facing multiple legal challenges (see Pending Litigation, below).

Colorado

Colorado's Producer Responsibility Program for Statewide Recycling Act (enacted 2022) follows a framework similar to Oregon, though it exempts most business-to-business packaging. In Colorado, producers are required to have registered and reported 2024 and 2025 packaging year data. Notably, the state has two approved PROs: CAA and the Lubricant Packaging Management Association (LPMA), which manages petroleum and automotive products. Penalties for noncompliance in the first instance begin at $5,000 per day for the first day and $1,500 per day thereafter. If additional violations occur within the same 12-month period, penalties can reach as high as $20,000 for the first day and $6,000 per day thereafter. Like Oregon, this program also faces a legal challenge raising due process, nondelegation, and First Amendment claims (see Pending Litigation, below).

California

SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act (enacted 2022), is the most complex state EPR program. California requires producers to report both packaging data (including the number of plastic components sold or distributed in California) and progress towards source reduction targets, described in more detail below. Currently, producers are required to have registered and reported 2023 and 2025 data to CAA, the only approved PRO. CalRecycle administers and enforces the program. Penalties for noncompliance may result in fines of up to $50,000 per day, per violation. The Draft California Program Plan, published by CAA, is open for comment through August 14, 2026, with the final version and fee schedule expected in October 2026. SB 54 is facing legal challenges from both environmental and industry groups (see Pending Litigation, below).

California Source Reduction Requirements

SB 54 is unique among state EPR programs in mandating affirmative source reduction reporting. Producers must collectively reduce single-use plastic packaging by 10% by 2027, 20% by 2030, and 25% by 2032, measured by both weight and component count against a 2023 baseline. These targets are absolute caps with no adjustment for sales growth. CAA intends to reach these targets by implementing a bonus/malus (or penalty) fee structure that incentivizes source reduction — illustrative malus fees begin at approximately $25/ton in 2027 and could reach $500-700/ton by 2032. Producers must identify strategies across five statutory pathways: (1) reuse/refill, (2) elimination, (3) shifting material, (4) right-sizing, and (5) postconsumer recycled content (PCR, capped at 8% credit). Each producer must file an Individual Source Reduction Plan (ISR Plan) no later than August 1, 2026, detailing its chosen strategies and projected reductions.

Minnesota, Maryland, and Washington

In these states, CAA required simplified supply reporting for 2025 data to inform future program planning. Importantly, these states only include consumer packaging in the scope of covered materials.

• Washington's program will also use the simplified reports to calculate early fees. Washington has a registration deadline of July 1, 2026, and CAA must develop a program plan for producers by October 1, 2028.
• Minnesota required registration by July 1, 2025, and CAA must submit its program plan for Minnesota by August 1, 2028.
• Maryland's law allows multiple PROs to operate concurrently and requires comprehensive responsibility plans by July 1, 2028. CAA is currently the only approved PRO in Maryland, and producers were required to join by May 31, 2026.

Maine

Under the Act to Support and Improve Municipal Recycling Programs and Save Taxpayer Money (enacted 2021), enforcement falls to the Maine Department of Environmental Protection (DEP), although the implementation of this law is less developed than in the other six states.

Pending Litigation Challenging EPR

EPR programs face significant constitutional challenges in multiple states, raising fundamental questions about fee-setting authority, delegation to private entities, and the boundaries of state regulation of interstate commerce.

Oregon — National Association of Wholesaler-Distributors v. Oregon DEQ and Lollicup USA, Inc. v. Feldon

Two separate lawsuits have been filed challenging Oregon’s Plastic Pollution and Recycling Modernization Act.

On July 30, 2025, the National Association of Wholesaler-Distributors (NAW) filed suit in the U.S. District Court for the District of Oregon challenging the Act on five grounds: Dormant Commerce Clause, unconstitutional conditions, Due Process (federal and state), Equal Protection, and nondelegation (Oregon Constitution). The court granted a preliminary injunction on February 6, 2026, finding likelihood of success on Dormant Commerce Clause and Due Process claims — particularly challenging CAA's fee-setting methodology. The injunction is limited to NAW members as of that date; the law remains fully enforceable against all other producers. Trial is set for July 13, 2026. Additional trade associations' motions to intervene were denied as untimely.

On June 25, 2026, Lollicup USA, Inc., filed a class action complaint in the same court on behalf of itself and all producers not protected by the NAW injunction, raising Dormant Commerce Clause and Due Process claims and seeking declaratory and injunctive relief on substantially the same constitutional theories. No injunctive relief has been granted in the Lollicup case, and the Act remains enforceable against all non-NAW member producers.

Colorado — Independent Lubricant Manufacturers Association v. Colorado Department of Public Health and Environment

The Independent Lubricant Manufacturers Association (ILMA) filed suit on March 12, 2026, in Colorado state court raising due process, nondelegation, and First Amendment claims — challenging the delegation of significant governmental authority to private PROs (CAA/LPMA) and alleging restrictions on producers informing consumers about compliance costs. ILMA contends its members are smaller, independent producers disproportionately affected compared to multinationals controlling the PROs. This case tests whether the constitutional arguments brought in Oregon can succeed in other jurisdictions. No trial date has been set.

California — Nebraska v. Heller and Natural Resources Defense Council v. California Department of Resources and Recycling Recovery

Two separate lawsuits have been filed challenging California's Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54). On June 2, 2026, a coalition of environmental groups filed suit in California state court alleging that CalRecycle's regulations are inconsistent with SB 54 and arbitrary and capricious — specifically challenging provisions that allow chemical recycling (pyrolysis), fail to define "viable" responsible end-markets or address toxic materials, and permit indefinite federal-law-conflict exclusions without adequate safeguards. On June 22, 2026, a coalition of 17 state attorneys general (led by Nebraska) and the National Association of Wholesaler-Distributors (NAW) filed a separate complaint in California federal court raising sweeping constitutional challenges, including Dormant Commerce Clause violations (discriminating against interstate commerce and imposing unfairly apportioned fees), First Amendment claims (content-based restrictions on disclosing fees to consumers and compelled association with the CAA), and unlawful delegation of government authority to the CAA without adequate legislative standards — mirroring the constitutional arguments that secured a preliminary injunction in Oregon's parallel EPR litigation. No injunctive relief has been granted in either California case, and the regulations remain in full force and effect.

Key Takeaway

Pending litigation does not currently provide grounds for non-NAW producers to delay or avoid compliance in any state. Producers should maintain full compliance with packaging laws, including EPR, while monitoring litigation developments.

New Jersey's Recycled Content Law

New Jersey has set minimum required levels of recycled content in rigid plastic containers, plastic beverage containers, glass containers, paper and plastic carryout bags, and plastic trash bags. See N.J.S.A. 13:1E-99.135 et seq. The state also prohibits the sale of polystyrene loose-fill packaging. Id. Notably, food packaging was exempt from the minimum recycled content requirements for the first several years of implementation, but that ends in January 2027. Thus, food companies need to act quickly to ensure compliance. Additionally, as the minimum thresholds for recycled content increase, companies must prepare for potential cost increases and/or limited availability of quality recycled content. The purpose of this law is to stimulate the market for recycled content, especially Post-Consumer Resin (PCR), by regulating a minimum level of demand. While New Jersey is not an EPR state, this law is an adjacent requirement mandating packaging changes.

Chemicals of Concern (COCs)

When assessing the environmental impact of packaging, companies should also consider chemicals of concern. For example, more than a dozen states have banned PFAS in food packaging. Additionally, the California Department of Toxic Substances Control (DTSC) is in the process of designating microplastics as a "Candidate Chemical," which would enable the state to impose specific regulations on consumer products and packaging. While EPR frequently prompts packaging sustainability analyses, a complete evaluation looks beyond EPR and includes COCs. Doing so not only ensures compliance but also allows for proactive regulatory planning and mitigation of litigation risks.

Recommended Next Steps

• Assess producer status and covered material definitions across all seven EPR states, and register with CAA (or applicable PRO) where required.
• Prepare and submit a California ISR Plan by August 1, 2026 — Identify source reduction strategies across the five pathways, and budget for bonus/malus fees taking effect in 2027.
• Monitor EPR litigation — Oregon trial (July 2026); California AG and environmental groups challenges; Colorado proceedings.
• Secure recycled-content supply and assess COCs — PFAS and microplastics are increasingly scrutinized substances.
• Consider engaging experienced counsel to develop a coordinated multistate compliance strategy and evaluate litigation exposure related to packaging sustainability.

For More Information

For further information, you may contact the authors.