5 Steps to Building a Source Reduction Plan the CAA Will Accept
This is not about checking a box. Regulators will be looking for plans that are specific, measurable, and grounded in your actual packaging data. Vague commitments and aspirational goals will not cut it. What they want is a clear roadmap showing how your company will reduce the amount of covered plastic packaging material it puts into the California market.
Here are 5 steps to build a source reduction plan that holds up to scrutiny.
Step 1: Establish Your 2023 Baseline
Everything starts with your baseline. Under SB 54, 2023 is the reference year against which your reductions will be measured. Before you can plan for reductions, you need an accurate, defensible picture of your packaging footprint as of that year.
Your baseline inventory should capture:
- Total weight of covered packaging sold into California (in pounds)
- Number of plastic components sold into California
- Packaging categories (rigid plastic, flexible plastic, glass, metal, fiber, etc.)
- Sales volume data tied to California specifically, not national totals
One of the most common questions we hear from brands is how growth factors into baseline calculations. If your 2023 baseline was 100 lbs of covered packaging and your California sales double, your reduction target is still calculated off that 100 lb baseline, not 200 lbs. The law is focused on absolute weight reduction, not intensity-based metrics. That means growing companies need to get ahead of this now.
Step 2: Understand What Counts as Source Reduction
Source reduction under SB 54 is not just about switching materials. It means physically reducing the amount of plastic packaging material used. There are several paths to get there, and your plan should identify which ones apply to your products.
Accepted source reduction strategies include:
- Eliminating plastic components: Removing the component entirely
- Switching to non-plastic covered materials: Replacing plastic components with a non-plastic alternative
- Right sizing: Lightweighting, concentrating product, reducing headspace
- Increase Post Consumer Recycled (PCR) Content
- Reuse/refill: Shifting to reuse or refill models where applicable
Reuse and refill often come up as a source of confusion. Many brands feel they have limited opportunity in this area, particularly in food, frozen goods, medical, or pharmaceutical categories. The good news is that plans can account for technical or regulatory barriers, including food safety requirements and FDA compliance obligations. If reuse is genuinely not feasible for your packaging, you can document that and make the case. But it needs to be substantiated, not assumed.
Step 3: Map Your Packaging Portfolio Against Reduction Opportunities
Not all of your packaging will have the same reduction potential. The goal of this step is to identify where the biggest opportunities are and prioritize them in your plan.
A useful approach is to tier your packaging by:
- Volume sold into California (high volume = high impact opportunity)
- Current plastic component weight versus industry benchmarks
- Technical feasibility of lightweighting or elimination
- Regulatory or food safety constraints that limit options
- Timeline for packaging redesigns or supplier changes
This exercise will also help you build the quantitative projections regulators expect to see. Your plan should include year-over-year weight reduction estimates that tie back to specific packaging changes, not just a target number with no pathway.
Step 4: Factor in PCR Content Credits
Under SB 54, post-consumer recycled (PCR) content is one of the tools available to offset source reduction requirements. A sliding scale applies: the more PCR content you incorporate into your packaging, the more credit you receive toward meeting your targets.
Key things to know about the PCR credit system:
- Higher PCR percentages can increase the amount of source reduction attributed to a package, up to the maximum contribution allowed under the regulations.
- PCR content data must be traceable, verifiable, and supported by appropriate documentation.
- PCR content is only one of several source reduction pathways and is subject to a maximum contribution cap.
Brands should work closely with packaging suppliers early to understand what PCR options are available at the material and format level. Locking in PCR supply now will be critical as demand increases across the industry heading into 2027.
Step 5: Build a Plan That Can Evolve
One thing that comes up frequently is whether source reduction plans can be modified after submission. The answer is yes, and building in that flexibility is smart planning.
Your plan should anticipate that business conditions will change. California sales may fluctuate. New packaging technologies may become available. Supplier relationships will shift.
A credible plan accounts for this by:
- Documenting assumptions clearly so they can be revisited
- Identifying trigger conditions that would prompt a plan update (significant sales volume changes, supply chain disruptions, regulatory changes)
- Building annual review milestones into the plan structure
- Keeping detailed records of packaging changes so progress can be demonstrated over time
The CAA will be evaluating your plan for credibility, which means they want to see that your commitments are realistic and that you have a real process behind them. A plan that acknowledges uncertainty and builds in review points is more credible than one that overpromises and ignores the complexity of getting there.
The Bottom Line
The brands that will be in the best position are the ones building their baseline data, mapping their packaging portfolios, and starting supplier conversations now.
If your team has questions about what a credible source reduction plan looks like for your specific product categories, contact us with your questions and your packaging challenges and let us work through them together.
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Watch our webinar: The 2027 Credibility Test, Building A Source Reduction Plan CAA Will Accept