Key Takeaways

• CAA submitted its first program plan on June 15, 2026, opening a 60-day public comment period through Aug. 14, ahead of a final submission to CalRecycle in October 2026.

• Producers owe early fees in 2026, charged on a simplified schedule, while the full EPR base fees and selected eco-modulation factors will begin in 2027 once the feeschedule is finalized in October 2026.

• The Plastic Pollution Mitigation Fund (PPMF) is expected to raise $5 billion over 10 years, funded primarily by plastic packaging producers plus up to $150 million annually from resin manufacturers.

• CAA is weighing a three-year exemption request from the 2027 source reduction target, citing the regulatory delays, with a decision expected after producers' Individual Source Reduction Plans are due in August 2026.

• 15 covered material categories (CMCs) are to be phased out as there is no viable recycling pathway at scale. 41 CMCs have yet to reach California’s recycling targets but may remain in the market (if approved); CAA is to invest in the infrastructure to increase their recycling rate and reach compliance. 

• Producer registration closed June 1, 2026, 5,700 large producers are now fully regulated under the law. The next deadline is the Individual Source Reduction Plan, which is due for submission on August 1, 2026.

A first-of-its-kind plan, built under regulatory pressure

SB 54 was signed into law in 2022, making California the fourth U.S. state (after Maine, Oregon, and Colorado) to pass a packaging EPR law. But no other state, or country, has attempted anything at this scale: SB 54 sets the highest plastic recycling rate targets (65% by 2032) of any U.S. EPR law and is the only one with binding source reduction requirements (25% reduction is single-use plastic). Once implemented, it will be the largest packaging EPR program in the world given California's population.

CAA has been developing this program plan against a compressed timeline. CalRecycle's statewide Needs Assessment, originally due much earlier, wasn't published until February 2026, and the law's final implementing regulations weren't approved until May 1, 2026, 16 months after SB 54's original deadline. CAA nonetheless launched producer reporting in fall 2025, ahead of final regulations, to avoid losing more time. Managing an ambitious EPR program at this scale is not an easy feat. 

What the plan confirms for 2027

The plan lays out a phased fee structure. In 2027, CAA will charge EPR base fees, calculated per material category by weight and component count, plus a limited set of eco-modulation bonuses and maluses. CAA proposes to defer most eco-modulation factors, along with the complete fee framework, to 2029. California's formula has four separate components (a base fee, a Reuse Investment Fee, a PPMF weight fee, and a PPMF component fee). This is meaningfully more complex than Oregon or Colorado's approach, where producers pay a single per-volume fee.

On source reduction, SB 54's targets are reaffirmed in the plan: producers must cut plastic packaging by 10% by weight and by component count in 2027, rising to 20% by 2030 and 25% by 2032, versus a 2023 baseline, with at least 2% of the 2027 target met through reuse and refill. Up to 8% of the full 25% target can instead be met using post-consumer recycled (PCR) content.

The PPMF is also proposed at scale: it's expected to raise $5 billion over 10 years, with CAA proposing to calculate each plastic producer's share of the fund using a formula weighted 80% toward plastic weight and 20% toward component count.

What's still open

Several pieces of the plan remain unsettled. The fee schedule published alongside the plan is a draft range, not a final number. CAA has said the actual 2027 EPR base fees won't be locked in until October 2026, based on 2025 supply data.

More notably, CAA is considering seeking a three-year exemption from its own 2027 source reduction target, arguing that the 16-month regulatory delay left producers too little runway to hit it. The 2027 targets include a 10% reduction in weight and number of components, and 2% “reuse, refill, and elimination” rate, both against a 2023 baseline. CAA says it will decide after reviewing producers' Individual Source Reduction Plans, due in August 2026. If those plans show the target is achievable, CAA won't pursue the exemption.

CAA's plan also offers a first look at its compliance roadmap for the 95 covered material categories, though exemption statuses remain pending approval and may change. Of these, 15 categories, including polystyrene and PVC film, are slated for phase-out: CAA has determined there's no viable recycling pathway at scale, and producers must discontinue their use by the designated timeline. 41 other categories have not yet reached target recycling rates but do have a viable pathway forward. For these, CAA has applied for a 2-5 year exemption while it builds out the necessary recycling infrastructure. The actual plan and exemption status of each material category will depend on whether these approvals are granted. 

The program plan itself isn't final, either. CAA expects to keep revising it through the comment period and advisory board review before submitting a final version to CalRecycle in October 2026.

What to do now

1. Read the chapters most relevant to your packaging portfolio, materials strategy, compostables, source reduction and fee-setting, in CAA's published plan. 

2. Submit comments through CAA's before Aug. 14, 2026, if any part of the draft affects your compliance strategy.

3. Start modeling fee exposure for 2027 and beyond, understanding the final numbers may shift in October. Neta AI’s Fee Projection module can help you do this in one click.

4. Watch for CAA's decision on the source reduction exemption request, which will directly affect 2027 obligations if it's granted.

What you’ll find out in this series

Over the next several posts, we'll break down the rest of the program plan in the order producers will actually need it: source reduction targets and the exemption CAA is weighing, which materials are being phased out and what replaces them, how California's fee formula actually calculates what you owe, the eco-modulation bonuses and maluses to plan for, the compostable packaging deadline most producers are missing, and exactly what data your team needs to start collecting for SB 54 reporting. Subscribe to Neta AI’s blog or LinkedIn page for more SB54 insights!  

Staying ahead

This is the first program plan submitted under SB 54, and it won't be the last word. CAA will keep revising it through the public comment period and into its October submission to CalRecycle. For compliance teams, that means the details that matter most, including final fees, the source reduction exemption decision, and eco-modulation specifics, are still moving targets over the next few months.

At Neta AI, our proprietary AI agent tracks changes like these as they happen, across CalRecycle's rulemaking, CAA's program plan updates, and the advisory board's public meetings. Our EPR module helps producers of all size forecast fees and consolidate opportunities for fee reduction. If you want help getting ahead of SB 54's program plan, reach out! We'd love to walk you through it.