California’s EPR rules need a real path to chemical recycling

CalRecycle must approve, conditionally approve or reject Circular Action Alliance’s (CAA) SB 54 plan by about December 27, while even PET and HDPE bottles, jugs and jars are more than 10 percentage points short of the 30% recycling rate due in 2028.

California is implementing packaging extended producer responsibility (EPR) under SB 54 and textile EPR under SB 707. I see a policy mismatch between their legal reach and their practical markets. The state has left one door open while building a narrow hallway.

Forty years ago, in the final hours of negotiations over California’s CRV law, a major bottling executive forced a concession he believed served his interests. I knew it did the opposite. I let him have it anyway, then used the opening to tighten processing-fee language. It cost his industry 10 times as much, though it may not have been best for the state.

What must CalRecycle decide by December 27?

CAA’s final SB 54 program plan, filed Oct. 13, permits pyrolysis, depolymerization and physical recycling. CalRecycle says: “The statute did not categorically exclude pyrolysis.” The plan also introduces mass balance accounting for the first time, but its legal opening stops short of a commitment.

Oct. 16 CAA advisory board slides read “Mechanical Recycling Prioritized First” and show no current plan to pursue complementary options. The plan prefers mechanical recycling, drops support for responsible use of other methods and shifts earlier technology-agnostic language toward technology consideration.

Producers face recycling and source-reduction deadlines, major fines and bans if they miss the law. CalRecycle estimates that even PET and HDPE bottles, jugs and jars, California’s best-performing container formats, remain more than 10 points short of the 30% recycling rate due in 2028.

CAA is seeking exemptions for 56 material categories, including 14 that it says have no viable pathway and must phase out.

Those exemptions expose the immediate risk: legal targets can outrun the collection and processing systems built to meet them.

Can chemical recycling support mechanical recyclers?

Some advocates oppose meaningful chemical recycling because they fear plastic melting at large refineries will perpetuate overconsumption and turn waste into fuel. I share the concern, but a blocking strategy will backfire environmentally and economically.

Material recovery facilities and mechanical lines face a basic market problem. Most plastic packaging contains chemicals and has no legitimate outlet for years, if ever, unless it can be co-processed at large chemical facilities, some owned by oil companies that mainly make fuel.

Pyrolysis oil is an intermediate, not a finished plastic product. Refineries and crackers must blend it with fossil feedstock; nobody will build a parallel petrochemical industry solely for recycled oil. Once molecules mix, no one can identify which pellet began as which pouch.

Mass balance assigns recycled input to outputs through bookkeeping, and its rules determine whether an output earns recycled-content credit. CAA accepts it only under fuel-excluded allocation, rejects free attribution, never mentions co-processing and requires APR to certify recycled-content claims. APR offers no path for chemically recycled content, and CAA declined commenters’ request to recognize ISCC PLUS.

Chemical recycling need not threaten mechanical recyclers. Pyrolysis suits films, pouches and multilayer laminates that mechanical lines reject and that contaminate PET and HDPE bales. Giving those materials a destination can make mechanical PCR cleaner and more valuable.

Chemical recycling can help mechanical recycling, but only if producers can certify and sell the resulting output.

What happens if CalRecycle leaves the market narrow?

An ideal outcome would be companies eliminating plastic packaging or consolidating resins into a few mechanically recyclable formats. Reality is less cooperative. Without buyers for co-processing output, most brands will probably abandon the law’s rates, pay fines and seek political relief.

Fine revenue could become a political prize for vested interests, with little money reaching effective reduction or recycling. The bill would fall on companies and workers or, more likely, California consumers, who could take their frustration to lawmakers at the next election.

Without chemical capacity, compliance costs will rise without a matching increase in diversion.

What can California’s textile program teach packaging?

California is launching a broad EPR program for textiles, where the technical case for mixed methods is visible in one cotton-polyester shirt. Cellulose fiber is spun together with synthetic polymer. Like plastic, textiles are made of chemicals. Mechanical recycling can shred the garment, but each pass shortens fibers and lowers quality, making mechanical-only recycling a form of legally mandated downcycling.

Landbell USA’s application to run the textile program proposes mechanical recycling at domestic hubs and chemical recycling for blends and harder fractions, under safety and yield obligations. The filing remains an application, not an approved plan. Still, it offers a more practical structure than the current packaging approach.

Californians landfill roughly 1.2 million tons of textiles each year. In 2024, CalRecycle counted about 1.5 million tons of film, flexible and multilayer plastic packaging in state landfills. If the textile program cannot find diversion pathways for blends, most of that clothing stays buried.

Textiles show that EPR can work when it sets outcomes and allows different recycling methods to compete.

Should CalRecycle regulate outcomes rather than designs?

CalRecycle can keep the market open by conditioning approval on two changes:

• A certification path for chemically recycled content alongside APR.
• Recognition of verified co-processing under free-attribution mass balance, which lets a certified operator assign recycled content to chosen products rather than spread it evenly across all outputs.

Those conditions would set outcomes and let mechanical, chemical and biological recycling compete to deliver them.

Source reduction remains my first preference. Banning practices alone is not enough because unintended consequences can be predictable and costly, especially for the planet.

Packaging and textile EPR can succeed only if policy preserves room for innovation in reduction and recycling without making life harder for working and middle-class Californians. California should not have to lose its shirts to prove the point.

Some advocates may win the chemistry fight and lose the system. The textile program is about to test what packaging has just ruled out.

The next milestone is CalRecycle’s decision on CAA’s plan by about December 27. That choice will determine whether California has opened a recycling market or merely written one on paper.