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Source Reduction Summit

Strategy under uncertainty

Name: The Source Reduction Summit
Start: 2026-06-03
End: 2026-06-04
Location: RTI International Headquarters

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 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 the rulebook moved. On June 15, 2026, Circular Action Alliance (CAA) — the nonprofit California chose to run the program on producers’ behalf — submitted its draft plan to the state’s advisory board, with public comment open through August 14. This piece does one thing the event recap didn’t: it sets what teams were planning around at the summit against what the draft now says — and what’s worth acting on while it’s still in comment.

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.

Set

How reduction is credited

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

Set in the draft

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 bonus that also rewards a 2026 baseline — but the core 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 Tiered Bonus that also rewards reduction against a 2026 baseline, with a greater incentive for net reduction. Bonuses are the same across all pathways to avoid SKU-level reporting (Ch. 6). The core measure still doesn’t credit growth — the bonus is the lever.

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 15The malus is applied uniformly to plastic, and producers carry no malus on the plastic they reduced from 2013 through 2022 (Ch. 6). Fee-rate estimates were published in May 2026, so the cost case can be modeled now — against estimates, not final numbers.

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). Plan your pathways around the gap, not around the target alone.

Confirmed & quantified

SB 54 against the wider regulatory web

At the summitSB 54 interacts with recyclability-labeling law, other-state EPR, and unsettled definitions. 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. Cross-state conflicts are out of scope, so multi-state modeling 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 15Compliance targets begin in 2027, but the plan is a draft in public comment through August 14, so figures can still change before it’s finalized later in 2026. Plan around ranges, not fixed points.

Still moving

What you can use moving forward

The draft answers more than the summit could, but it is still a draft. Some variables are settled enough to build on now; others are worth holding loosely until the final plan.

Settled enough to act on

Model against the 25% target by weight and components, and map every reduction to one of the five pathways — the categories won’t change.
Build the cost case around the malus and the tiered bonus: the cheapest pathways clear the malus, and net reduction against 2023 earns the most bonus.
Treat the 8% PCR cap as a ceiling. Size the other four pathways to carry the rest.
Assume the infrastructure gap is real — film especially — and choose pathways your end markets can actually absorb.

Keep flexible until final

Exact fee and malus rates — you have May 2026 estimates, not final numbers.
How growth is treated in the net measure — the comment period (through August 14) may shift it.
Definitions still in play, including what counts as recyclable and how components are counted.
Anything that depends on the final plan: file the August 1 ISRP on what’s settled, and revisit when it lands.

The bottom line

Act on what’s settled. Stay flexible on what isn’t.

The draft answers more than producers had at the summit, but it’s still a draft. The strongest move is to build now on what’s fixed — the 25% target, the five pathways, and the shape of the fees — while keeping the open items under review: final fee rates, how growth is treated in the net measure, and definitions that could still change. Waiting for full certainty isn’t an option, because the first Individual Source Reduction Plan (ISRP) is due August 1.

The draft is open for public comment through August 14 — producers and their supply-chain partners can weigh in directly — with a final plan expected later in 2026.

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).