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California’s New Organic Waste Diversion Rules Take Effect

January 12, 2022

On January 1, 2022, The California Department of Resource Recovery and Recycling (“CalRecycle”), a Division of California EPA, began enforcing new regulations under SB 1383, a 2016 bill aimed at reducing methane emissions from short-lived climate pollutants (SLCPs). The regulations primarily aim to divert organic waste from California’s landfills through a variety of requirements that will present both significant costs and opportunities for public and private sectors in a variety of industries. CalRecycle has announced that “SB 1383 is the largest change to the waste and recycling industries in 30 years”, requiring most impacted businesses to establish food recycling programs over the next year while also reducing organic waste shipments to landfills 70% over the next three years.

Deadlines for Food Recovery Requirements

To reduce food waste and help address food insecurity, SB 1383 requires that by 2025 California will recover 20% of edible food that would otherwise be sent to landfills. To reach this target, cities and counties must establish food recovery programs and must oversee mandated donation activities by commercial edible food generators.

The new law separates mandated food donors into two tiers. Commercial edible food generators, including grocery stores, food service providers, food distributors and wholesalers, make up the first tier and are required to donate the maximum amount of their edible food that would otherwise be disposed starting January 1, 2022. The second tier extends this requirement to other businesses, including restaurants, hotels, health facilities and large venues and events, starting January 1, 2024.

To ensure compliance with the SB 1383 food recovery requirements, the implementing regulations require mandated food donors to establish contracts or written agreements with food recovery organizations and services. Depending on the amount and types of food that must be recovered, a mandated food donor may need to contract with multiple food recovery organizations or services in order to satisfy the “maximum” food recovery requirement under SB 1383. CalRecycle has Model Food Recovery Agreement for use in negotiating contracts with food recovery organizations and services.

Grocery stores must comply with the maximum food recovery requirement unless they can prove that “extraordinary circumstances” prevented such compliance. “Extraordinary circumstances” include only (1) the failure of local authorities to increase food recovery capacity and (2) acts of god. The grocery store will bear the burden of proving that an “extraordinary circumstance” was present in any enforcement action.

SB 1383 also requires mandated food donors to maintain records of their food donation activities, and CalRecycle has created a Model Recordkeeping Tool to help donors keep adequate records.

Local agencies will request each of the following types of records during inspections:

  • Information about contracts with food recovery organizations and services;
  • Schedules for food donation deliveries or collections;
  • Quantity of food donated in pounds per month; and
  • Types of food each food recovery organization and service will receive or collect.

Organic Waste Recovery Requirements

To achieve SB 1383’s goal of reaching 75% organic waste reduction by 2025, the regulations also require all cities and counties that provide trash services to create food recycling programs and to increase the amount of organic waste product recovered per resident each year. “Recovery” of organic waste can be satisfied via composting or mulching programs, or by the disposition of organic waste at biofuels facilities.

All cities and counties that provide trash services must also adopt ordinances requiring organic waste generators and other entities subject to SB 1383 to comply with CalRecycle’s implementing regulations. Businesses subject to SB 1383, including commercial food generators, should keep an eye out in the coming months for applicable local ordinances.

Enforcement and Penalties

Each city and county is required to inspect and enforce SB 1383’s requirements as they apply to businesses located within the jurisdiction. While inspection efforts must begin now, enforcement actions for violations will not commence January 1, 2024.

For violations occurring after January 1, 2024, the enforcing agency must issue a Notice of Violation requiring compliance within 60 days. If after 60 days, the regulated entity is still not in compliance, the jurisdiction must impose penalties. Penalties for noncompliance escalate from $50-$100 per violation for the first one or two violations up to $250-$500 per violation for the third and subsequent violations.

CalRecycle has an active enforcement team, which has historically issued enforcement orders that can aggregate multiple violations to large penalty demands for solid waste regulations violations. These include regulations pertaining to plastics, waste paper and used tires.

Costs and Opportunities

SB 1383 and its implementing regulations will impose significant costs on both public and private actors. One of the most significant burdens on private actors will fall on commercial food generators, including grocery stores, who must immediately begin contracting with food recovery organizations to recover the “maximum” amount of food that would otherwise be disposed. Failure to meet this stringent requirement may result in significant penalties beginning in 2024.

Businesses should take steps now to ensure compliance with SB 1383 and its implementing regulations. Additional requirements are also likely to take effect over the coming years, including ordinances from cities and counties that will be responsible for enforcing SB 1383’s requirements within their jurisdictions.

Regulated Businesses should also examine their waste reduction targets and related public both to ensure compliance with the new deadlines and to harmonize these targets with metrics developed under the new records requirements.

SB 1383 may also present opportunities for growth from both a business perspective and from environmental, social and governance (ESG) perspectives. As California’s organic waste recovery requirements continue to become stricter, businesses that provide organic waste recycling and disposal services, including food recovery, will benefit from increased demand. Organic waste-generating businesses may benefit by including organic waste recovery programs within their broader ESG initiatives. CalRecycle believes that organic waste in landfills contributes 20% of California’s methane emissions, and considers organic waste to therefore be a climate “super pollutant.” CalRecycle projects that reducing SLCPs like organic waste may be one of the more effective measures for mitigating global climate change.

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. M. Elizabeth Dubeck, an O’Melveny partner licensed to practice law in California, Michael D. Hamilton, an O’Melveny partner licensed to practice law in California, John Rousakis, an O'Melveny partner licensed to practice law in New York, Geoff Yost, an O'Melveny partner licensed to practice law in California, Eric Rothenberg, an O'Melveny of counsel licensed to practice law in New York 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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