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Posted: Jul 14, 2026 / 04:46 PM PDT

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Grocery prices in California could soar even higher as preliminary fees tied to Senate Bill 54 are scheduled to go into effect next month.

Passed in 2022,  the Plastic Pollution Prevention and Packaging Producer Responsibility Act aims to reduce single-use plastics and ensure all packaging sold in California is recyclable or compostable by 2032. The state plans to achieve this goal by holding companies responsible for the types of materials reaching California landfills. Companies that produce more nonrecyclable packaging will face higher fees than those that are compliant with the state’s new restrictions.

The State of California estimates that households will pay an extra $66 to $190 per year as a result of the nonrecyclable packaging fees.

_File: Jaqueline Benitez pushes her cart down an aisle as she shops for groceries at a supermarket in Bellflower, Calif., on Monday, Feb. 13, 2023. (AP Photo/Allison Dinner)__File: Jaqueline Benitez pushes her cart down an aisle as she shops for groceries at a supermarket in Bellflower, Calif., on Monday, Feb. 13, 2023. (AP Photo/Allison Dinner)_Read More

“Individuals may face heightened costs for goods as producers bear the expenses of meeting regulatory requirements … as these costs trickle down from producer to consumer,” the state’s extensive program plan reads.

CalRecycle estimates that 5,741 companies, which are responsible for producing a bulk of the packaging, will face annual compliance costs of $457,114.

“Many factors will contribute to the actual costs incurred by any individual producer including the type and amount of material they represent and the compliance pathways they choose,” the state’s program plan reads.

  • File: Heavy machinery is used to process trash at the Otay Landfill in Chula Vista, Calif., on Friday, Jan. 26, 2024. (AP Photo/Damian Dovarganes)Read More »
  • File: A tractor sorts garbage at the Altamont Landfill owned by Waste Management in Livermore, Calif., Friday, Dec. 18, 2009. (AP Photo/Marcio Jose Sanchez)Read More »
  • File: Heavy machinery is used to process trash at the Otay Landfill in Chula Vista, Calif., on Friday, Jan. 26, 2024. (AP Photo/Damian Dovarganes)Read More »
  • File: A tractor sorts garbage at the Altamont Landfill owned by Waste Management in Livermore, Calif., Friday, Dec. 18, 2009. (AP Photo/Marcio Jose Sanchez)Read More »

File: A tractor sorts garbage at the Altamont Landfill owned by Waste Management in Livermore, Calif., Friday, Dec. 18, 2009. (AP Photo/Marcio Jose Sanchez)Read More »

Businesses with gross annual sales of less than $1 million, which use packaging materials covered in the plan, are eligible for exemption from many of the requirements outlined in SB 54.

“Small producers will incur a small biennial cost of approximately $309 for record keeping and application costs, an average of $155 per year,” the state plan reads. “CalRecycle estimates that 7,874 producers will be eligible for this exemption.”

However, an estimated 546,269 businesses in the state are expected to see the cost of goods increase if producers raise prices in response to the newly imposed fees. On average, these businesses are estimated to pay an additional $4,806 annually.

“These costs could be lower depending on how the producer responsibility organization and producers comply with the Act and the proposed regulations,” the state report reads. “If all producers of covered material pass on 30% of the cost of the Act and the Proposed Regulations, rather than 100%, to consumers, the average annual cost to non-regulated businesses would decrease from $4,806 to $1,442 (a decrease of $3,364).”

Anticipated cost increases related to SB54. (CalRecycle)

If businesses also passed 30% of the cost of the new regulations onto basic consumers, instead of 100%, each person would pay roughly $20 more per year, the state estimates.

The executive director of the Dairy Institute of California, Katie Davey, told SFGate that her group estimates Californians will actually pay $1,300 more per year, on average, due to the new regulations.

“It’s going to get really expensive here in California,” Davey told SFGate. “And as a Californian for my whole life, it already is expensive.”

Although preliminary fees designed to recoup the cost of funding the new program are scheduled to go into effect in August, the state won’t require companies to be compliant with the new regulations until 2027.

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