SB 54 Source Reduction: Your ISR Planning Questions, Answered

We asked the 300+ attendees of our unPacked: Source Reduction Bootcamp what's still unclear about implementing source reduction. Only 2% said they feel clear on next steps.

The rest are split across four gaps: 36% don't know how to set realistic reduction targets. 18% aren't sure which materials or formats to prioritize. Another 18% don't know how to make the internal business case. And 9% don't know which suppliers or tools are even available to help.

That's not surprising given the regulation is dense, the CAA workbook only went live recently, and the August 1 deadline doesn't leave much room to figure it out slowly.

There's one bright spot: 33% feel confident about reducing material at the design stage, and 32% see a clear case for cost savings from lighter, simpler packaging. Producers know what direction to go. The gap is in the specifics of how.

That's what this post is for. Below are the most common questions from the 127 asked at bootcamp, answered by our compliance team, and organized by topic.

Please note: the answers below are for general reference only and do not constitute legal advice. Consult your own legal counsel to determine the requirements applicable to your business.

Who Has to Comply

Is submitting an ISR Plan actually required?

Yes. If you have supplied single-use plastic packaging in California in any capacity, you are required to submit an Individual Source Reduction Plan to CAA by August 1, 2026. Do your best to put together the most reasonable plan you can.

Who qualifies as a covered producer?

All single-use plastic packaging producers registered with CAA in California are legally required to submit. This includes B2B — source reduction applies to industrial and commercial packaging, not just consumer-facing products. If you are a small producer (less than $1M in California revenue in the most recent calendar year), you can file for an exemption for up to two years.

If the producer doesn't ship to California, but the distributor or retailer does, is the producer still responsible?

This depends on how you're classified in the supply chain. If you are a contract manufacturer producing packaging for other brands, you would likely not be the obligated producer. Confirm your producer status directly with CAA.

Does this assume that all producers can reduce or eliminate single-use plastic?

All covered producers are expected to make reductions. However, where federal law mandates packaging that conflicts with California's requirements, CalRecycle accepts federal-conflict exemption requests through the PEPRS portal.

The 25% Goal and How It's Measured

What are the required reduction targets and dates?

Reductions are measured against your 2023 baseline — by both total plastic weight and total number of plastic components. The milestones are:

Is the 25% target per company or collective?

Collective. The 25% belongs to CAA as the producer responsibility organization, not to individual producers. CAA asks each producer to submit a realistic, good-faith plan that contributes to that overall goal. Your individual plan doesn't have to hit 25%.

Is reduction measured by weight, component count, or both?

Both. A brand that reduces weight but increases component count — by adding a plastic insert, for example — may not satisfy the threshold. Both dimensions need to move in the right direction.

Is PCR content capped at 8%?

PCR can be counted toward source reduction as alternative compliance, up to 8% in aggregate — meaning it limits how much of the 25% collective goal can be met through PCR across all producers. It has to be PCR used over and above your 2023 baseline. There's no limit on how much PCR you can put in your packaging — producers are encouraged to include as much as possible — and bonuses apply to all APR-certified PCR used above baseline.

It's worth using PCR for the bonuses, knowing that the collective cap is being monitored and the incentive mechanism may change if that threshold is reached.

Building Your ISR Plan

What is the ISR Plan, exactly? Is it a binding commitment?

At this stage, it is a data collection exercise — a projection of what you plan to do, not a contract. CAA understands plans don't perfectly reflect reality. After submission, CAA will individually review and approve each plan. The binding legal agreement (the ISR Agreement) comes later this year as a separate step.

What if our plan doesn't meet the milestone goals because it isn't realistic?

Submit what is genuinely achievable. A plan with modest reductions and clear explanations of why certain pathways aren't feasible counts as a valid submission. Don't overcommit. The incentive structure — not penalties — is CAA's primary mechanism right now. Under-reducing means more maluses. Exceeding your plan means more bonuses.

What if a reduction of single-use plastic is not realistic for our packaging at all?

There is no regulatory exemption, but CAA recognizes that safety, shelf-life, barrier requirements, and federal regulatory conflicts can make certain reductions infeasible. If none of the five pathways works for your packaging, explain that clearly. A plan that honestly documents why reduction isn't feasible still counts as a good-faith submission.

Will we be able to update our plan if we need to pivot?

The ISR Plan is a one-time submission — not a recurring document. What you actually achieve — and how it diverges from the plan — is captured through your annual source reduction reporting each year. That's the ongoing mechanism for reflecting pivots as your approach evolves.

What level of detail is required?

You'll need to project your total plastic weight and component count for supply data years (2026, 2029, 2031), describe your methodology, and outline planned reductions by pathway. The CAA workbook, available to registered producers in the producer portal, mirrors exactly what the portal will ask for — use it to prepare before you go into the portal.

Do you need to be registered as a producer to access the workbook?

Yes. Registration is the first step to accessing the CAA portal and workbook.

The Five Source Reduction Pathways

Do we have to use all five pathways?

No. Submit a plan that reflects what's genuinely realistic for your portfolio. If two pathways apply to your business, plan around those. The plan should be credible and achievable — not exhaustive.

Does downgauging on films like shrink film or pallet wrap count?

Yes. Downgauging falls under Pathway 4: Rightsizing, Lightweighting, Concentration and Bulk. It qualifies as long as you can demonstrate a net reduction in plastic weight per unit.

How can we meet the reuse/refill requirement if we don't sell food, beverages, or bulk products?

Reuse and refill is not limited to food or beverages. It applies to any packaging format — personal care, transport packaging, B2B packaging, and more. If any of your formats can transition to a reusable or refillable model, that qualifies.

If we switch from plastic to a compostable pouch, does it count as source reduction — even if we can't label it compostable after June 2027?

Yes, but only if the replacement is a genuinely non-plastic material. Switching to a different plastic, including PLA or PHA bioplastics, does not earn source reduction credit, because those are still classified as plastic under SB 54. A true material switch away from plastic counts regardless of whether you can label the result “compostable."

Do SKU discontinuations count toward source reduction?

Yes. Discontinuing a SKU removes its packaging from your baseline, which counts as source reduction. Note that it's measured at the portfolio level — if that volume shifts to another plastic SKU, the net reduction can wash out.

Historical Reductions (2013–2022)

What if we don't have data going back to 2013?

The historical source reduction section is entirely optional. If you don't have 2013 data, leave it blank and focus on your forward-looking plan from the 2023 baseline onward. If you want to claim a historical reduction and have data from 2017 or 2018, use a defensible methodology — approximate your 2013 figures, explain your approach, and CAA will review it individually.

‍What types of documents substantiate a 2013–2022 reduction?

Technical drawings, sales reports, and BOM (bill of materials) records are the primary forms of evidence. Team or public communications that corroborate packaging changes alongside sales data can also work. You don't need to submit these with your plan — you just need to be able to provide them if CalRecycle requests them.

The section only asks for 2013 vs. 2022 data. What about if we made reductions in between?

CAA is only looking at two data points: your total plastic weight and component count in 2013 compared to 2022. They are not looking for incremental year-by-year changes. If your 2022 totals were lower than 2013 — net of sales growth — you get credit.

Fees, Bonuses, and Maluses

How does the bonus and malus system work?

Maluses are charged on plastic you supply into the California market, and bonuses are earned through reductions. There are two bonus tiers: Tier 1 is tied to the difference between your 2026 and 2023 supply (capped at that 2026-minus-2023 amount), and Tier 2 is tied to the difference between your 2027 and 2023 supply (no cap, and it can't be combined with Tier 1). The maluses fund the bonuses.

CAA has published illustrative incentive amounts to help producers model, but stresses these are not final. As an illustration of scale, CAA has modeled that funding the bonuses associated with meeting the 2032 targets could imply a malus level in the range of several hundred dollars per ton. The financial case for reducing plastic strengthens over time — worth factoring into your planning now. Final rates publish in October 2026.

Do we have to apply for bonuses separately, like Oregon's EPD bonus?

No. The bonus/malus calculation is applied automatically through your annual supply reporting. The illustrative bonus/malus schedule is available now in the CAA producer portal. Final rates will be confirmed in October 2026.

Where do we find the eco-modulation factors and bonus rates?

In the illustrative incentive schedule in the CAA producer portal. Final rates will be published in October 2026.

When do pre-program fees start? How do they differ from program fees?

Pre-program fees are expected in 2026, ahead of full program fees that begin in January 2027. The illustrative fee schedule (published May 2026) in the producer portal helps you model costs now, with final rates confirmed in October 2026.

Confidentiality and Public Disclosure

Will our ISR Plan be made public?

Plans aren't guaranteed to be public, but government FOIA-type laws mean they could be released if requested. The ISR Plan includes a Confidentiality Claims section (Question 14) where you can flag information you believe should be treated as a trade secret. CalRecycle — not CAA — makes the final call on disclosure. Be conservative about what sensitive details you include, and use the trade secret section for anything genuinely proprietary.

Specific Packaging Situations

What about products with federal packaging requirements that conflict with California's rules?

If your packaging is required by federal law but conflicts with California's requirements, you can request an exemption from CalRecycle via the PEPRS portal. The SB 54 producer guidance page on the CalRecycle website has a full section on how to apply.

We ship to California warehouses, but products are then shipped to other states before consumers see them. Does that plastic count?

This comes down to what enters California's waste stream. Work with your distributors to document that the packaging did not become waste in California. If you can substantiate that it was shipped out of state before reaching consumers or the waste stream, you can justify excluding it — just explain your methodology clearly.

Do RFID anti-theft plastic tags count as a plastic component?

Yes. RFID tags are considered a plastic component and should be counted in your supply reporting.

What about plastic tape on corrugated boxes and pallet wrap?

Plastic tape on corrugated boxes is part of CAA's pending de minimis applications. Explore alternatives like paper tape. If switching isn't feasible, note this in your methodology and flag that you're awaiting de minimis approval. Until CalRecycle approves those applications, include all plastic components in your reporting.

Are de minimis components excluded from source reduction calculations?

Not yet. De minimis plastics must still be counted in baseline and supply reports — do not mark them as zero. Once CAA's de minimis applications are approved by CalRecycle, those components may be removed from source reduction calculations. As of now, nothing has been approved.

We've already maxed out our PCR content at 30% before 2023. There's no room left there. What do we do?

There is no formal exemption for technically constrained packaging. CAA recognizes that safety, shelf-life, and barrier requirements can make certain reductions infeasible. Submit a good-faith plan that explains those constraints clearly, and explore whether other pathways — elimination, rightsizing, or material switching — apply to other parts of your portfolio.

Enforcement

What enforcement authority does CalRecycle actually have?

CalRecycle is the enforcement authority under SB 54. CAA is the producer responsibility organization — it does not enforce. The statute carries penalty provisions, but how enforcement will apply to individual producers is still being defined. For now, the bonus/malus incentive structure is the primary mechanism in use.

Will there be on-site inspections?

CalRecycle retains the authority to audit producers and verify reporting. The specifics of how audits will be conducted are still being defined as the program moves into implementation.

What Comes Next

What's the timeline from here?

SB 54's source reduction requirements are still taking shape in places — de minimis applications are pending, the ISR Agreement details haven't been released, and enforcement specifics are still being defined. What is clear: August 1 is firm, the plan needs to be realistic, and a good-faith effort is what CAA is looking for right now.

If you want to model your ISR pathways before you commit to anything on paper, the rePurpose Packaging Simulator gives you instant projections on EPR cost impact, recyclability tradeoffs, and pathway performance across your actual SKUs — before you finalize anything. Book a demo.

Missed the webinar? Watch the session on-demand.