Three years ago, California Governor Gavin Newsom, a Democrat, signed off on the country’s strongest plastic reduction policy. The legislation, known as SB 54, gave the state recycling agency until 2025 to write rules to dramatically slash sales of single-use plastic. At the time, Newsom called the law “nation-leading,” and said he was “holding polluters responsible and cutting plastics at the source.”

California’s recycling agency, CalRecycle, has been crafting rules around the law’s implementation since 2022, negotiating the specifics with industry groups and environmental advocates and incorporating public feedback. Earlier this month, however, the governor’s office unexpectedly rejected CalRecycle’s proposed rules. He told the agency to go back to the drawing board, leaving California no closer to addressing its plastic waste management problem.

“It’s kind of like we just got slapped with a wet fish,” said Shira Lane, founder and CEO of a zero-waste organization in Sacramento called Atrium 916. Lane said she’d participated in two years of long, complicated meetings with CalRecycle officials to provide input on the regulations, and that it was unclear why the governor had now decided to reject them. His office’s statements on the issue pointed only vaguely to concerns about fairness and “minimizing costs for small businesses and working families.”

Newsom’s one-eighty arrived as plastics industry groups — many of which claim publicly to support the legislation — ramped up complaints behind closed doors about the potential impact of the law. In the absence of a clear explanation from the governor, many environmental groups suspect that he responded to industry pressure. “A lot of people were hurt,” Lane said, describing the good-faith effort they had put into shaping the rules only for them to be rejected for unclear reasons.

When it passed in 2022, SB 54 was hailed as the United States’ “most comprehensive policy for reducing sources of plastic waste,” and a “huge win” in the fight against ocean plastic pollution. It gave companies until 2032 to reduce their in-state sales of single-use plastic packaging and foodware, both by weight and by the number of items, by 25 percent. It also required them to achieve significantly higher recycling rates for plastic products, finance a $500 million annual fund to clean up existing pollution, and make all of their single-use packaging and foodware — even if it wasn’t made of plastic — recyclable or compostable by 2032. 

CalRecycle was in charge of writing more specific rules to enforce the law, like delineating which products it applied to. Another body, known in industry parlance as a “producer responsibility organization,” would coordinate companies’ cooperation, requiring plastic producers to become paying members, managing the $500 million fund, and making sure the industry was complying with the law. An existing organization called Circular Action Alliance, composed of plastics industry representatives, was designated as the producer responsibility organization for SB 54.

SB 54 had gained ground in the California legislature thanks to the threat of a more aggressive ballot initiative, which would have given plastic producers less control over the implementation of plastic reduction targets, placed a 1-cent-per-item tax on plastic producers and distributors, and banned polystyrene food packaging outright. 

Supporters of the referendum, which had received the requisite 623,212 signatures to be included on the ballot, mostly included grassroots environmental groups. The initiative’s three sponsors agreed to withdraw it in exchange for the passage of SB 54, which was seen as preferable by business and industry groups. The American Chemistry Council, for instance — a plastics and petrochemical trade group — said in 2022 that SB 54 was “not the optimal legislation to drive California toward a circular economy,” but that it was a better outcome than the withdrawn ballot initiative. The group pledged to “work constructively with lawmakers and CalRecycle to support appropriate implementation of SB 54.”

The California Chamber of Commerce similarly said that the policy would ensure “long-term policy certainty around recycling and packaging.” The Plastics Industry Association declined to endorse SB 54 but said it was better than the ballot initiative.

Still, industry groups appeared to hold out hope in 2022 that unidentified changes would be made to the legislation. The American Chemistry Council vowed to “support subsequent legislation to make the necessary improvements to help ensure the intent of SB 54 is carried out effectively.” The California Chamber of Commerce’s president noted that the bill “allows the Legislature to make changes to the proposal in the future,” and the president of the California Business Roundtable said in a CalMatters op-ed that lawmakers should “come back to the conversation prepared to make changes that can open doors for a more circular economy.”

After the passage of the law, CalRecycles held several information sessions and workshops about its forthcoming rules, with opportunities for participation from the public and plastic producers. The agency began the formal rulemaking process for SB 54 on March 8, 2024 and held two comment periods, during which industry groups provided feedback, over the course of that year. CalRecycles finished drafting the regulations in the fall, and in September began notifying industry groups that they would soon be going into effect. The rules were set to be adopted one year from the start of rulemaking, on March 8, 2025.

Ben Allen, a Democratic senator who represents parts of Los Angeles and who sponsored SB 54, learned that industry groups objected to the rules less than a week before the March 8 deadline. He sat down with Circular Action Alliance and came up with what he called a “roadmap” to address their concerns: If industry groups would not object to CalRecycle’s regulations moving forward on schedule, then he and other lawmakers would pass legislation to make minor changes to the law itself and to empower CalRecycle to make slight adjustments to the rules it had spent so long working on.

The proposed changes, laid out in a letter shared with Grist, included exemptions for biosciences packaging, less frequent reporting from packaging companies, and a more lenient timeline for plastic producers to become members of the producer responsibility organization. Allen said he had nearly reached a compromise by the time the governor’s office made its announcement. “People were not expecting the governor to pull back the drafted regulations,” Allen said. “That was a surprising development.”

Newsom’s office declined to say whether it had held meetings with business or industry groups, and emphasized that the rulemaking delay would not change “the timeline” for SB 54, presumably referring to the statutory deadlines for plastic companies to reduce the amount of packaging they sell and meet certain recycling rates. When asked to elaborate on its cost concerns, a spokesperson for the governor pointed Grist to a regulatory impact assessment published by CalRecycle last October, which estimated SB 54-related compliance costs for California businesses and individuals.

For businesses that sell more than $1 million of products covered by SB 54 each year, the annual costs would average about $791,000, the report found. The typical small businesses would see increased expenses of just $309. Households could end up paying a mean of $329 a year by 2032, though the report said this number would likely be mitigated by increases in personal income, as well as health and environmental benefits totaling more than $40 billion over 10 years.

Allen objected to Newsom’s characterization of the bill’s toll on entrepreneurs and families. The whole point of the bill, he said, was to address an “untenable” rise in the cost of waste collection and pollution management in California, as cities are being forced to manage ever-increasing amounts of plastic garbage.

“We knew that there might be some modest increases in consumer costs, but they would be more than made up for in ratepayer benefits on the back end,” he added. 

Of the six business and industry groups that Grist reached out to, only Circular Action Alliance elaborated on its specific concerns over CalRecycle’s proposed rules for SB 54. A spokesperson said these had involved “clarifying producer obligations, compiling data to build the program plan, and fixing timing and sequencing issues.” The group said it had “actively engaged with interested parties” including the governor’s office, CalRecycle, and Allen “to address any feasibility concerns and ensure the successful implementation of the legislation.”

“We look forward to continued engagement with all parties to move SB 54 forward,” the spokesperson said.

Two groups — the American Chemistry Council and California Chamber of Commerce — sent Grist statements affirming their support for SB 54. The California Business Roundtable, the California Retailers Association, and the Plastics Industry Association did not respond to Grist’s requests for comment, though Plastics Industry Association President and CEO Matt Seaholm released a statement calling for policymakers “to craft practical, effective regulations that drive economic growth, foster innovation, and enhance circularity.”

In the absence of clearer information about Newsom’s intentions, environmental advocates are concerned that business and industry groups are trying to claw back parts of the statute, despite their nominal support for it in 2022.

“The more they can delay the implementation, the more they can make a case for the deadlines being unreasonable,” said Jennifer Savage, associate director of California policy for the nonprofit Surfrider.

Plastic makers and business groups are already seizing on the SB 54 kerfuffle to argue that similar legislation shouldn’t be pursued in other jurisdictions. Last weekend, more than 100 companies and groups signed a letter obtained by Politico opposing a proposed New York bill on the grounds that it would “go beyond the California statute in key areas, … indicating that the impacts of New York’s proposal would be even more severe.”

Allen said the governor’s office wants to move “expeditiously” to complete CalRecycle’s revisions by this summer. That includes initiating another 45-day public comment period, incorporating any changes, and submitting final documents to the state’s Office of Administrative Law to make sure they are clear and legal. 

Nick Lapis, director of advocacy for the nonprofit Californians Against Waste, said his organization will be ready to participate however possible, whether by engaging in a public workshop or by submitting written comments on a draft of the new rules. He also hinted that the ballot initiative that environmentalists withdrew when SB 54 was passed may still be on the table.

“We remain committed to reevaluating all possible avenues,” Cohen said, “including reviving the initiative to let voters decide on this.”