California's Source Reduction Reporting Requirements
EXECUTIVE SUMMARY
California’s EPR program continues to unfold in real time with new clarity on reporting requirements unveiled by CAA in February 2026. The requirements include:
Pre-determined source reduction targets for plastic materials by 2027, 2030, and 2032.
Pre-determined material recycling rates by 2028, 2030, and 2032.
Failure to report or failure to meet covered material reductions carries fines up to $50,000 per day.
To implement these program requirements, California producers must submit two additional reports beyond the annual supply report in 2026:
Annual Source Reduction Report by May 31, submitted alongside your annual supply report.
Individual Source Reduction Plan by August 1 (anticipated deadline).
Producers must use these reports to prove they are on track to meet the upcoming reduction targets on covered plastic materials that are part of SB 54’s 2032 program goals. The initial materiatargets to meet are:
10% reduction on introduced covered materials by January 1, 2027.
30% recycling rate on covered materials by January 1, 2028.
These rates are measured against 2023 baseline data, and there are multiple pathways to achieving source reduction. All 2023 baseline data must be confirmed or resubmitted within 30 days of SB 54 rules being finalized.
Background
California's EPR program SB 54 (the Plastic Pollution Prevention and Packaging Producer Responsibility Act) is unlike any other extended producer responsibility (EPR) law in the United States. While states like Oregon, Colorado, and Maine focus primarily on recycling infrastructure and fee collection, California goes a step further: it requires producers to actively reduce the amount of plastic packaging they put on the market in the first place.
Two of the most distinctive and consequential compliance obligations under SB 54 in 2026 are the Annual Source Reduction Report and the Individual Source Reduction Plan. Understanding these requirements now is essential for any brand selling packaged goods in California.
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The Big Picture: California's Source Reduction Mandate
At the heart of SB 54 is an ambitious target: by January 1, 2032, producers must achieve a 25% reduction in both the weight and number of single-use plastic packaging components sold or distributed in California as measured against a 2023 baseline. The milestones are as follows:
| Plastic Material Reduction Rates | Plastic Material Recycling Rates |
|---|---|
|
10%
reduction in covered plastic material
By January 1, 2027
|
30%
covered plastic material recycling rate
By January 1, 2028
|
|
20%
reduction in covered plastic material
By January 1, 2030
|
40%
covered plastic material recycling rate
By January 1, 2030
|
|
25%
reduction in covered plastic material
By January 1, 2032
|
65%
covered plastic material recycling rate
By January 1, 2032
|
On December 31, 2024, CalRecycle published the Source Reduction Baseline Report, establishing that over 2.9 million tons of plastic representing approximately 171.4 billion plastic components were used in covered products during calendar year 2023. This baseline is the benchmark against which all future reductions will be measured.
California is the only state in the country with specific, enforceable source reduction targets already on the books. That makes the reporting obligations tied to these targets especially important.
What Is the Annual Source Reduction Report?
The Annual Source Reduction Report is a yearly filing that captures each producer's progress toward the 2032 source reduction goals. It provides a transparent, data-driven picture of how the packaging landscape in California is evolving over time.
Key Details
What It Covers: The report must document the total amount by weight and number of covered plastic materials a producer supplied into California for the relevant calendar year. Producers must also account for any source reduction achieved relative to prior years.
First Filing Deadline: The initial Annual Source Reduction Report, using calendar year 2025 data, is due by May 31, 2026.
Ongoing Obligation: This becomes an annual requirement going forward, tracking cumulative progress toward the 2032 goals.
Who Files It: Obligated producers who have registered with the Circular Action Alliance (CAA), California's designated Producer Responsibility Organization (PRO), and who supply covered materials into the California market.
What Is the Individual Source Reduction Plan?
The Individual Source Reduction Plan (ISRP) is a forward-looking strategic document that each obligated producer must prepare. It goes beyond simply reporting past performance by requiring producers to demonstrate a credible roadmap for achieving their share of the overall 25% reduction target.
What the Plan Must Include
A detailed accounting of how much covered plastic material the producer has source reduced since January 1, 2013 (by weight and number of components).
Projections for source reduction through 2032.
The specific strategies the producer intends to use to achieve reductions.
Accepted Source Reduction Strategies Under SB 54
Concentration: Reducing packaging by increasing product concentration.
Right-Sizing: Minimizing excess packaging around products.
Lightweighting: Reducing the amount of plastic used per unit.
Eliminating plastic components entirely.
Shifting to reusable or refillable packaging.
Bulk or large-format packaging that allows consumers to refill reusable containers at home.
Substituting plastic with non-plastic covered materials.
One important caveat: no more than 8% of a producer's total source reduction obligation can be met by switching to post-consumer recycled (PCR) content alone. True physical reduction or material elimination is required, and failure to achieve your ISRP targets can carry noncompliance fees of up to $50,000 per day under SB 54’s enforcement framework.
First Filing Deadline
While SB 54 does not specify an exact statutory deadline for the ISRP, CAA's first annual program plan is due to CalRecycle by January 1, 2027, and that plan must include summaries drawn from individual producer plans. Producers should expect to submit their ISRPs to CAA no later than August 1, 2026, with the exact date to be confirmed once regulations are finalized.
Why 2026 Is the Year to Act
California is currently operating under interim rules, with final SB 54 regulations expected in 2026 following Governor Newsom's direction to CalRecycle to restart rulemaking in March 2025. Despite the regulatory uncertainty, the statutory deadlines set in SB 54 itself remain in effect, so compliance obligations are moving forward regardless of when final rules are issued.
Here's a snapshot of the 2026 deadline calendar for producers:
| Milestone | Type | Deadline |
|---|---|---|
|
Final Baseline Report
CY 2023 data
|
Reporting | May 31, 2026 Internal CAA deadline |
|
Annual Source Reduction Report
CY 2025 data
|
Reporting | May 31, 2026 |
|
Producer Supply Report
CY 2025 data
|
Reporting | May 31, 2026 |
|
Individual Source Reduction Plan
Forward-looking reduction strategy
|
Planning | By Aug 1, 2026 Exact date TBD |
|
Early Fee Invoices Issued
Based on 2025 packaging data
|
Payment | August 2026 |
Critically, California's early-fee structure is unique among U.S. EPR states: 2026 early fees will be based on 2025 packaging data not 2024, as in Oregon and Colorado. This means the data producers report this year directly determines how much they pay.
Download our free EPR bulletin for a quick reference on critical EPR deadlines and noncompliance penalties.
What "Source Reduction" Actually Means (and What It Doesn't)
It's worth being precise about what qualifies as source reduction under SB 54, because not all packaging changes count equally.
Source reduction means reducing the total quantity of plastic covered material created by a producer relative to the 2023 baseline. Methods like making your packaging lighter, smaller, or switching from plastic to fiber all qualify. However, simply adding recycled content to your packaging is not a substitute for actual physical reduction.
By 2032, at least 10% of the total required source reduction must come from shifting to reusable or refillable packaging, or by eliminating plastic components entirely. The remaining 15% can be achieved through the broader range of qualifying strategies listed above.
What Producers Should Do Now
With deadlines approaching rapidly, here are the steps producers should be taking today:
Register with CAA: Registration was required by September 5, 2025, but late registrations may still be possible.
Audit Packaging Inventory: Understand exactly what covered materials you are placing on the California market, their weights, and component counts.
Audit 2023 Data: All 2023 baseline data must be accurately submitted within 30 days of the approval of finalized SB 54 regulations.
Gather 2025 Packaging DataImmediately: Get prepared ahead of the May 31, 2026 reporting deadline.
Draft Individual Source Reduction Plan: Map your packaging portfolio against the qualifying reduction strategies and identify where you have the most opportunity to cut plastic use by 2032.
Engage Your Team & Suppliers: Achieving 25% source reduction will require upstream design changes. The sooner those conversations begin, the better.
Monitor CalRecycle's Rulemaking: Final regulations are expected in 2026 and may clarify or adjust some requirements. Stay current with CAA's guidance updates.
Take Action Today
California's Annual Source Reduction Report and Individual Source Reduction Plan represent something genuinely new in U.S. packaging regulation: a legally mandated obligation not just to fund recycling, but to design and sellless plastic in the first place. For producers, these requirements demand a level of packaging transparency and long-term strategic planning that goes far beyond what any other state currently requires.
The compliance window for 2026 is narrowing quickly. Brands that start building their data infrastructure and reduction roadmaps now will be far better positioned than those who wait for final regulations to act.
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