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Source Reduction Summit

Strategy under uncertainty

What packaging teams were planning around at the summit — and how the draft SB 54 program plan lines up against it.

June 3 & 4, 2026 ·An EPR Readiness Circle live event ·6 min read

The Source Reduction Summit, in June 2026, was a working session to help packaging producers get ready for California’s SB 54 — an extended producer responsibility (EPR) law that makes producers pay to recover, and cut, the packaging they sell. Once running, it will be the largest packaging EPR program in the world, with the highest recycling targets of any U.S. program and source-reduction rules no other state has (CAA draft program plan, Introduction). The catch: at the time of the summit, the rules weren’t finished. The statewide Needs Assessment landed only in February 2026, and CalRecycle’s final regulations were approved on May 1, 2026 — 16 months late (Introduction). Producers were building strategy without a settled rulebook — and most felt it. Going in, only about 5% of producers rated their understanding of what the plan requires as “high” (Source Reduction Summit polling).

Then producers got their first real look at how the program will run. On June 15, 2026, Circular Action Alliance (CAA) — the nonprofit California chose to run the program on producers’ behalf — published its draft program plan for public comment, open through August 14. This piece focuses on what teams were planning around at the summit — and how that lines up with what the draft program plan says.

The variables you’re planning around

Strategy under uncertainty comes down to knowing which variables you can pin down and which you can’t. These are the levers SB 54 source reduction turns on. Each tag shows how settled the variable is — fixed in the statute, set in the draft plan, or still open.

Set in statute

The target

A 25% cut in the plastic packaging the law covers, by 2032 — measured two ways at once: by weight and by number of plastic components.

Statute & CAA guidance

How reduction is credited

Five pathways — reuse/refill, elimination, switching to non-plastic, right-sizing (concentrating, lightweighting, bulk), and PCR. You attribute activity by weight and components to each (draft plan, Ch. 6).

Set in draft plan

Recycled content (PCR)

Post-consumer recycled plastic can count toward the target — but only up to 8 of the 25 points, about a third (draft plan, Ch. 6). A ceiling, not a strategy on its own.

Partly settled

Net reduction vs. growth

Net reduction is measured against a 2023 baseline and doesn’t credit growth. The draft adds a two-tier bonus that also credits a 2026 baseline — recognizing growth between 2023 and 2026 — though the core net measure is unchanged.

Estimates out

Fees and penalties

A penalty on plastic (a “malus”), plus fees that reward better-designed packaging and charge more for worse (“eco-modulation”). Rate estimates came out in May 2026 (draft plan, Ch. 9–10).

Known constraint

Recycling infrastructure

In-state capacity is far below 2032 needs — the Needs Assessment puts film at about 6% (draft plan, Ch. 3). It limits which pathways are realistic.

What this piece does: it takes the questions producers were weighing at the summit — how reduction is measured, which actions count, what it will cost, and whether the infrastructure exists — and sets each against the draft program plan, so producers and their supply-chain partners can see where to act now and where to wait.

At the summit, vs. what the draft plan says

Below are the hot topics from the summit — questions still being discussed by multiple sides. Here’s how the draft program plan addressed each. Open one to compare what teams were planning around with what the plan now says.

How net reduction handles business growth

At the summitTeams called this their single biggest open question. Net reduction is measured against a 2023 baseline, so a growing company can do real work and still show close to zero.

Draft plan, June 15The plan keeps the 2023 net baseline, but adds a two-tier bonus. Producers are still rewarded most for reducing below the 2023 baseline (Tier 1); a smaller credit now also recognizes reduction against a 2026 baseline (Tier 2), which acknowledges business growth between 2023 and 2026. Bonuses are the same across all pathways, to avoid SKU-level reporting (Ch. 6).

Partly resolved

A concrete number for finance to model

At the summitFinance needed a real cost to plan against — a firm penalty figure was what teams kept asking for.

Draft plan, June 15Plastic a producer reduced between 2013 and the end of 2022 carries no base fee, no Reuse Investment Fee, and no PPMF fees — and, because the malus applies uniformly to all plastic, no malus either (Ch. 6). (CAA had asked for 2013 data in the producer workbooks in its March 2026 guidance; the payoff for having it is now clear.) Fee-rate estimates came out in May 2026, so the cost case can be modeled against estimates.

Resolved enough to model

How far PCR can carry the target

At the summitPCR — especially in film — was seen as viable and well-rewarded, but supply of certified material was tight.

Draft plan, June 15PCR counts toward the target, but only up to 8 of the 25 points — about a third (Ch. 6). Useful, but it can’t replace real reduction; the other four pathways still carry most of the load.

Resolved — cap set

Whether the infrastructure can keep up

At the summitA recurring barrier: the technical ceiling for source reduction sits above what recovery facilities can actually process.

Draft plan, June 15The plan confirms and quantifies the gap. Against 2032 needs, estimated in-state capacity is PET 27%, HDPE 58%, PP 27%, and film 6% (Ch. 3) — a reminder to weigh pathways against supply-chain realities, not the target alone.

Confirmed & quantified

SB 54 against the wider regulatory web

At the summitSB 54 interacts with recyclability-labeling law and other states’ EPR programs. A switch that satisfies one rule can break another.

Draft plan, June 15The plan sets California’s own path: 100% of packaging recyclable or compostable by 2032, plus recycling-rate targets of 30% (2028), 40% (2030), and 65% (2032) (SB 54) — recycling goals that sit alongside, not inside, the 25% source-reduction cut. The plan also notes how state programs differ — other states focus on single-use packaging, California on plastic — so multi-state modeling for your portfolio is still on you.

Partly resolved

How final the rules are

At the summitDeadlines were outrunning the rules; the first Individual Source Reduction Plan was due August 1 regardless.

Draft plan, June 15The draft is in public comment through August 14. The final program plan is due in October 2026, and it will take producers’ Individual Source Reduction Plans into account to gauge whether the 2027 statutory targets are reachable. The first of those plans is still due August 1 — so the time to read the draft, model against it, and give feedback is now.

Still moving

Planning individual action for a system-level change

At the summitParticipants noted that reuse and refill targets take more than redesigning a package — they need whole return systems and new infrastructure. How does a single producer plan individual action for that?

Draft plan, June 15The plan shows where CAA intends to invest. Its Reuse, Refill & Elimination Investment Plan (sections 6.3–6.4) and Table 8 (p. 225) lay out the system investments CAA is prioritizing — a signal of where shared infrastructure may be built, and where a producer’s own moves can plug in.

Still moving

What counts as recyclable — and how SB 343 fits

At the summitParticipants flagged ongoing uncertainty about which materials will ultimately qualify as recyclable under SB 54, and how that meshes with SB 343, California’s Truth in Recycling law (in effect October 2026).

Draft plan, June 15There’s more clarity, with open questions remaining. The draft suggests CalRecycle will operationalize SB 343 through its Covered Material Category (CMC) list, turning statutory criteria into material-specific designations. CAA notes it may ask CalRecycle to consider materials “trending toward recyclability” — which ones isn’t specified, though the plan points to carton and aseptic packaging, molded paper, and certain bulky rigid formats as below today’s acceptance thresholds but with a near-term path to broader acceptance through system investment (Ch. 3).

Still moving

What you can use moving forward

We have more answers in the draft than we did at the summit — but it’s still a draft. Here’s what we’re hearing producers feel more sure about, and the variables they’re still watching closely.*

What producers feel more sure about

Modeling against the 25% target — by weight and by components — and mapping reductions to the five pathways, since those categories are set.
Building the cost case around the malus and the two-tier bonus, now that May 2026 estimates are out.
Treating the 8% PCR cap as a ceiling and sizing the other four pathways to carry the rest.
Choosing pathways with supply-chain and infrastructure realities in mind, not the target alone.

What they’re still watching

Final fee, malus, and bonus rates — the May 2026 figures are estimates, and many are budgeting around ranges.
How growth is treated in the net measure — the comment period (through August 14) could shift it.
How “recyclable” gets defined — CalRecycle’s Covered Material Category list and its link to SB 343 add clarity, with room for materials “trending toward recyclability” still to be added.
What hinges on the final plan — many are filing the August 1 ISRP on what’s settled and revisiting when it lands.

* Circle is a neutral convener, not an advisor. This reflects what we heard producers say they’re focused on — an observation we’re passing along, not guidance or a recommendation from Circle.

The bottom line

Now’s the time to read it, model it, and weigh in.

The draft answers more than producers had at the summit, but it’s still a draft — open for public comment through August 14, with a final program plan due in October 2026 that will weigh producers’ Individual Source Reduction Plans against the 2027 targets.

Producers and their supply-chain partners can read the draft and submit feedback now — and the first Individual Source Reduction Plan is due August 1.

Draws on the June 2026 Source Reduction Summit, an EPR Readiness Circle convened by Circle (The Circular Policy Leadership Network) and hosted by RTI, and on CAA’s draft California EPR Program Plan submitted June 15, 2026. Summit material is anonymized and aggregate under Chatham House Rule; plan figures are cited inline. Reviewed for antitrust compliance.

This is a summary, not legal advice or an endorsement of any pathway or strategy. Each organization must make its own decisions, and should rely on the official program plan and CalRecycle regulations.

One of three companion products from the summit, alongside What Ready Looks Like (the build-it playbook) — coming soon — and State of the Summit (the polling).