O’Melveny Worldwide

US and International Development in Plastics Stewardship Law and Policy

April 4, 2023

Regulators, companies, and other stakeholders around the world continue to address the issues of plastic waste reduction, recycling, and increasingly, plastic product re-design to improve sustainability attributes. Plastic stewardship has also become both a key element of new initiatives mandating sustainability due diligence, and a focal point for greenwashing claims. We recently discussed California’s implementation of its SB 54 plastic pollution reduction initiative in a previous client alert. This update provides an overview of recent developments in California, other states, and abroad.

California Developments

California has begun implementing its Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54), enacted in June 2022. SB 54 requires that 30% of plastic items sold or bought in California be recyclable by 2028. This target will increase to 65% in 2032. In addition to these aggressive recycling targets, the state has provided for the establishment of a $500 million annual fund to clean up legacy plastic pollution, starting in 2027. A Producer Responsibility Organization (PRO) will be created to manage the fund under a framework developed by CalRecycle, with input from an advisory council. The PRO will collect fees from plastics manufacturers and packaging users based on a fee schedule to be developed by the PRO. These fees will then be used to fund the $500 million annual fund. If producers fail to meet the recycling targets, they could face monetary fines up to $50,000 per day or a complete ban on producing the nonrecyclable material. Chemical recycling of plastics, including breaking down plastics to create fuel, will not be counted towards the recycling targets under SB 54.

The California Attorney General’s office has also started focusing its enforcement efforts on plastics advertising claims. In November 2022, the office sent demand letters to six companies under Sections 17508 and 17580 of the Business and Professions Code, requesting information about their plastic waste reduction initiatives. Section 17508 prohibits false or misleading advertising claims, and Section 17580 requires companies that make environmental claims in advertising materials to maintain documentation supporting such claims. The demand letters asked the recipients to substantiate their advertising claims that certain reusable plastic bags are recyclable in the State of California. This enforcement action serves as a reminder to businesses of the importance of ensuring that advertising claims related to recyclability are accurate, substantiated, and reasonable with respect to deadlines and goals. The European Union (EU) and the United Kingdom have also issued guidance indicating an intent to prosecute false claims around plastics recyclability, as discussed in our previous client alert.

Other US States

A growing number of states continue to adopt legislation aimed at reducing plastic waste. As of March 2023, at least 20 states have passed legislation promoting the chemical recycling of used plastics. Many states and local governments have also banned certain single-use plastics, including bags, straws, and takeout containers. Businesses in the plastics supply chain need to stay current on these initiatives and include them within the scope of product planning to assure compliance with proliferating regulation. 

Colorado, Maine, and Oregon were early adopters of “extended producer responsibility” (EPR) rules, which aim to impose the primary financial burden of achieving waste reduction and recycling targets on plastics manufacturers. Each state plans to structure their EPR programs differently as highlighted below:

Maine: Law LD 1541, passed in 2021, is the first packaging producer responsibility law in the US. The law requires the Maine Department of Environmental Protection to contract with a stewardship organization to operate a packaging stewardship program. Companies selling packaged goods in Maine will be required to pay fees to the stewardship organization, which will use those fees to assist municipalities in providing expanded recycling services. The first producer payments will be due in 2026.

Oregon: Oregon’s Plastic Pollution and Recycling Modernization Act (SB 582), also passed in 2021, focuses on plastic packaging, paper products, and food service ware. Producers will be required to join a PRO and pay membership fees, which will be used to fund expanded recycling programs at the local level. SB 582 also ensures industry representation by including industry members on a new recycling advisory council. Unlike Maine’s statute, SB 582 will only require producers to fund 30% of the expanded recycling systems.

Colorado: Colorado’s Producer Responsibility Program for Recycling (HB 22-1355), passed in June 2022, covers all consumer-facing packaging and printed paper. Like Oregon’s statute, HB-1355 creates a PRO and a statewide recycling advisory board. Over the next two years, the PRO will be required to conduct a needs assessment of the state’s existing recycling system and develop a plan to improve the system. The PRO’s activities and the ultimate implementation of the new recycling system will be funded entirely by waste producers.

Several other states, including New York, North Carolina, Illinois, Rhode Island and Hawaii, have also proposed new EPR legislation within the last three months. 

As discussed in our previous client alert, plastics have become a focal point in recent US greenwashing suits as well, with plaintiffs alleging that claims such as “recyclable” and “from recycled product” in labels and advertising are false or misleading.

European Union Developments

The EU has also taken steps to reduce plastic waste and improve recycling systems. EU Regulation 2022/1616, which targets single-use plastics that come into contact with food, took effect last October. The regulation bans certain plastic products and imposes extended producer responsibility schemes on others, building on the EU’s broader 2021 Directive on Single Use Plastics (discussed in our previous client alert). A proposed regulation on packaging and packaging waste, which would require each EU member state to introduce a deposit-return scheme for beverage containers, is also under consideration.

EU member states also continue to focus on plastic waste at the national level. France set an ambitious goal of recycling 100% of plastic packaging by 2025, as part of its broader strategy to transition towards a circular economy. Additionally, Germany has introduced a packaging law that aims to boost recycling rates and improve product design for recyclability. France, Germany, and the Netherlands have also enacted broad ESG “due care” laws, which allow for consumer claims around plastics stewardship. Notably, three environmental groups brought an action earlier this year under France’s due care law, alleging that dairy conglomerate Danone failed to take action to reduce its plastic waste footprint. Large EU companies may also need to consider plastics stewardship under the EU’s proposed Corporate Sustainability Due Diligence Directive, which would require such companies to identify and mitigate the environmental impacts of their operations and supply chains.

Other International Developments

In March 2022, the United Nations Environment Assembly adopted a resolution creating a committee to develop a legally binding instrument on plastic pollution by the end of 2024. The committee will consider mandatory and voluntary approaches to reducing plastic pollution, along with financial support for countries in need. At the end of last year, the World Health Organization also convened a conference (including business representatives) to consider a new multilateral treaty on plastics stewardship. The broad-ranging agenda included consideration of a global ban on single-use plastics and measures to address plastic waste contamination in the ocean and unregulated land-based disposal areas. The WHO has proposed that a treaty be concluded by the end of 2024.

In June 2022, Canada finalized its ban on single-use plastic bags, joining more than three dozen other countries with similar bans.

The global regulatory landscape around plastic recycling and waste management is evolving quickly. It is crucial for businesses and organizations to stay informed on these developments to remain compliant and mitigate any potential legal risks. We will continue to monitor and provide updates on the latest developments in this area.

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, 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 Missouri, Chris Bowman, an O’Melveny associate licensed to practice law in California, and William Tamposi, 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.

© 2023 O’Melveny & Myers LLP. All Rights Reserved. Portions of this communication may contain attorney advertising. Prior results do not guarantee a similar outcome. Please direct all inquiries regarding New York’s Rules of Professional Conduct to O’Melveny & Myers LLP, Times Square Tower, 7 Times Square, New York, NY, 10036, T: +1 212 326 2000.