Environmental Groups Challenge California’s SB 54 Plastics Regulations

On June 2, 2026—one day after producers were required to register or seek an exemption—three major environmental organizations sued CalRecycle in San Francisco Superior Court, challenging final regulations implementing SB 54, California's Plastic Pollution Prevention and Packaging Producer Responsibility Act.  The petitioners contend that CalRecycle failed to implement SB 54 faithfully and instead adopted regulatory carve-outs that weaken the statute's plastic-reduction and recycling mandates.

Key Allegations

Petitioners allege that the final regulations depart from SB 54 in four principal respects: 

• Hazardous-waste standard. SB 54 uses a quantity-based hazardous waste exclusion, focused on how much hazardous waste a technology generates. The regulations allegedly substitute a risk-of-harm inquiry with no numeric threshold and treat any hazardous waste managed under a valid permit as posing no substantial risk—so a permitted facility can qualify as recycling regardless of the volume of hazardous waste it produces. 

• Definition of hazardous waste. The regulations allegedly improperly adopt the federal definition rather than California's more stringent one. 

• Chemical recycling. They fail to presumptively exclude chemical recycling technologies, including pyrolysis, from qualifying as recycling.

• Federal-conflict exclusion. Packaging is treated as exempt the moment a producer asserts a federal conflict—without any agency determination that a conflict actually exists, and with no expiration date for the exemption. 

The lawsuit further asserts the rulemaking was arbitrary, inadequately explained, and reversed—without sufficient justification—the agency’s prior 2024 position, under which a chemical recycling technology could not count as recycling unless an independent, peer-reviewed study confirmed it did not generate a significant amount of hazardous waste, and pyrolysis was treated as disposal rather than recycling.

What’s at Stake

If successful, this challenge could narrow the scope of compliant recycling pathways under SB 54, alter hazardous waste criteria for recycling technologies, and create uncertainty for producers relying on the current regulatory framework for packaging compliance and producer responsibility planning. Because the petition seeks interim enforcement of SB 54 pending re-promulgation, a ruling for petitioners could require producers to adjust compliance plans built on any of the challenged provisions before new regulations are in place.

Key Takeaways / What Companies Should Do Now

This lawsuit underscores the continuing regulatory uncertainty surrounding SB 54 and the implementation of California's extended producer responsibility regime for packaging. Companies with environmental compliance, product stewardship, packaging, or corporate governance exposure in the packaging and plastics space should consider consulting with counsel to assess their risk profiles and ensure compliance strategies remain sound and adaptable while the matter is pending.