Introduction

California’s SB 54 program is set to make packaging EPR a major budget line in 2027. Under CAA’s proposed plan, producers would fund a $1.105 billion first-year program, with invoices under the preliminary 2027 fee schedule planned for January 2027, pending CalRecycle’s decision on the plan. Because California’s 2027 fees are calculated from 2025 supply data that producers reported by May 31, 2026, the task for 2027 is to forecast and budget the bill accurately, while packaging changes made now reduce fees from 2028 onward.

California is the third state in this cost cycle. According to CAA, Oregon producers have owed fees since the program began on July 1, 2025, and Colorado fee obligations began in January 2026. This guide covers what California’s 2027 program costs, where each fee dollar goes, when invoices are planned, what packaging really costs per pound, what Colorado reveals about fee volatility, and which levers reduce future fees.

Key Takeaways

• Under CAA’s proposed plan, California’s 2027 SB 54 program budget is $1.105 billion, including the $500 million annual Plastic Pollution Mitigation Fund payment.
• California’s 2027 fees are based on calendar year 2025 supply data reported by May 31, 2026, so packaging changes made now affect fees from 2028, not the January 2027 invoice.
• 2027 rates are preliminary and non-binding until CalRecycle acts on the plan, and its 75-day review window closes around December 27, 2026.
• Base fees understate plastic costs: PVC and polystyrene film carry a $0.30 per pound base fee plus $0.29 per pound in plastic surcharges and $0.001 per plastic component.
• In Colorado, one producer reports paying more than $575,000 to two separate organizations, showing how fees can shift after a program launches.

How Much Will California’s Packaging EPR Program Cost Producers in 2027?

California’s SB 54 program carries a proposed 2027 budget of $1.105 billion, funded by producers through CAA. The figure is down from as much as $1.87 billion in the June 2026 draft. CAA calls it a 50/50 forecast and will update budgets and fees each year, so executives should treat it as a planning baseline.

The Circular Action Alliance’s revised California program plan, submitted to CalRecycle on October 13, 2026, sets a 2027 budget of $1.105 billion. According to Resource Recycling’s analysis of the plan, the five-year budget for 2027 to 2031 now ranges from $7.81 billion to $13.05 billion, compared with $9.35 billion to $17.2 billion in the June draft.

The 2027 figure is a 50/50 forecast, meaning CAA assumes an equal chance of overspending or underspending. Later years carry low and high scenarios based on managed tons, reimbursement levels, system performance and investment needs.

The plan also arrived under a compressed timeline. CAA notes that SB 54’s final implementing regulations, due by January 1, 2025, were not approved by California’s Office of Administrative Law until May 1, 2026, a delay of 16 months.

This cost base is shared across a large producer population. As of October 2026, more than 4,000 participant producers had registered with CAA. Each producer’s share is allocated from the supply data it reports, and CAA’s Producer Resource Center lists the annual supply report covering calendar year 2025, due May 31, 2026, as the report for the 2027 California program.

The program budget does not capture every cost. CAA has said it will maintain a separate fee mechanism for administrative, legal and other organizational costs that sit outside the plan budget.

Where California EPR Fees Go: Regulatory Costs vs. Program Costs

CAA’s 2027 fee schedule forecasts that 59 cents of every producer fee dollar funds regulatory obligations, led by the Plastic Pollution Mitigation Fund (PPMF) at 49 cents, while 29 cents funds the core program. The largest share of a California producer’s EPR bill is therefore set by statute rather than by recycling operations.

According to CAA’s 2027 California Producer Fees Schedule, published October 1, 2026, each producer fee dollar is forecast to break down as follows:

Forecast allocation from CAA’s October 1, 2026 fee schedule. The October 13 program plan budget uses different figures; treat this split as indicative.

These shares come from the October 1 fee schedule. The October 13 program plan budget, as reported by Resource Recycling, puts regulatory-driven spending, including the $500 million PPMF payment, at $600 million of the $1.105 billion total. The two documents were published two weeks apart and their figures do not reconcile exactly, so finance teams should treat the fee-dollar split as indicative and model the PPMF as a fixed amount.

The PPMF is the single largest driver. SB 54 requires producers to fund it at $500 million a year, and Resource Recycling reports that producers must raise $5 billion for the fund over 10 years. CAA collects these fees and remits them to the California Department of Tax and Fee Administration. Plastic resin manufacturers may contribute up to $150 million a year, which would reduce producers’ share.

Statutory obligations account for more than half of 2027 spending in the plan. Alongside the $500 million PPMF payment, the budget includes $50 million in regulatory costs and $50 million for a closure and transfer fund.

For budgeting, the practical point is that the PPMF portion is billed on its own schedule. Finance teams should forecast it as a separate line from the material-based program fees.

California SB 54 2027 Invoice Calendar and Cash-Flow Timing

Under CAA’s preliminary schedule, California producers would receive their 2027 annual fees in two equal invoices, in January and July, plus a single January invoice for the PPMF portion. CalRecycle’s review window for the plan closes around December 27, 2026, so finance teams must plan these payments while the rates remain under review.

CAA’s 2027 fee schedule states that producers will receive two invoices for their annual fees, 50% in January and 50% in July, each showing fees by material category, plus one invoice for the full PPMF portion in January. Because the plan is still pending, these dates describe CAA’s proposed schedule. If they hold, this structure front-loads cash outflow into the first quarter.

The key dates for 2027 budgeting are:

Planned dates depend on CalRecycle’s decision on CAA’s program plan.

December 27 is a response deadline, not a guaranteed decision date. Waste Dive reports that CalRecycle may respond with an approval, disapproval or conditional approval, or with a request for additional information or a timeline for a decision.

A conditional approval would not by itself delay the program. Packaging World reports that if CalRecycle approves the plan with conditions, it would be considered approved while CAA addresses them. The larger timing variable is implementation: Resource Recycling reports that CAA will implement the plan within 90 days of approval, which would run to late March 2027 if approval comes at the end of the review window.

The 2027 budget also absorbs earlier costs. CAA invoiced early fees in August 2026 to recoup part of its start-up costs, and the remaining $33 million is included in the 2027 budget.

What Does California Packaging EPR Really Cost per Pound?

California’s preliminary 2027 base fees range from $0.01 per pound for aluminum non-aerosol containers to $0.30 per pound for PVC and polystyrene film. For plastic, the base fee is only part of the cost: every plastic category also carries $0.29 per pound in surcharges plus a per-component fee, so budgets built on base fees alone understate plastic exposure.

Preliminary 2027 rates, non-binding until CalRecycle approves the program plan. Rates include CAA’s passive eco-modulation factors (5% bonus or 5% malus). Plastic categories pay all three plastic-component charges in addition to the base fee. The proposed virgin plastic malus ($100 per ton in 2027) comes from CAA’s program plan and is not reflected in this schedule.

Plastic components add three further charges on top of the base fee: a reuse investment fee of $0.03 per pound of plastic components, a PPMF weight fee of $0.26 per pound of plastic components, and a PPMF component fee of $0.001 per plastic component.

Adding the published components shows the all-in 2027 cost per pound, calculated from CAA’s schedule. For PVC or PS flexible and film items, the $0.30 base fee plus the $0.03 reuse investment fee and the $0.26 PPMF weight fee comes to $0.59 per pound, plus $0.001 per plastic component. For clear or natural PET bottles, jugs and jars, $0.12 plus $0.03 plus $0.26 comes to $0.41 per pound, plus $0.001 per plastic component. Cardboard without a plastic component costs $0.03 per pound, with no plastic surcharges.

Adding a plastic component can also move packaging into a higher base-fee category. Paperboard without a plastic component carries a $0.02 base fee, while paperboard with a plastic component carries $0.05. Waxed cardboard rises from $0.04 to $0.19 per pound when it includes a plastic component.

The 2027 rates include passive eco-modulation factors. A 5% bonus applies to materials with a recycling rate above the 2028 target, and a 5% malus applies to materials that are both non-recyclable and not compostable. CAA applies these factors automatically to invoices based on reported supply data.

All California 2027 rates remain preliminary and non-binding until CalRecycle approves the program plan.

Colorado EPR Fee Volatility: Overlapping PRO Charges and Methodology Changes

Colorado shows how EPR costs can multiply after a program launches. Producers of petroleum-related products report that they pay two separate producer responsibility organizations for packaging on the same product, and that one of them changed its fee methodology in October 2026, tripling fees in many instances.

Colorado’s Department of Public Health and Environment (CDPHE) approved an individual program plan from the Lubricants Packaging Management Association (LPMA), powered by Interchange 360, for packaging used with petroleum and automotive products. On October 15, 2026, the Auto Care Association moved to intervene in National Association of Wholesaler-Distributors v. Ryan, the pending federal challenge to Colorado’s EPR law. According to Foley & Lardner’s analysis of the filing, affected producers report primary packaging for those products to LPMA and secondary packaging and paper to CAA.

Figures from member declarations in the Auto Care Association’s October 15, 2026 motion to intervene, as reported by Foley & Lardner.

One member’s example illustrates the split. A diesel exhaust fluid container is reported to LPMA, while the cardboard shipper around that same container is reported to CAA. Each organization has its own registration, reporting portal, data format, material categories, deadlines and fee schedule.

The fee bases differ as well. According to one member, LPMA charges a flat $0.56 per gallon of fluid sold, applied retroactively to April 1, 2025, regardless of container size, weight or material. CAA charges a weight-based fee for the same container.

The member declarations put numbers on the burden:

• One member was invoiced more than $160,000 by CAA and more than $415,000 by LPMA, and reports paying more than $575,000 to the two organizations in Colorado alone, on top of roughly $390,000 in consultant and software costs.
• Another member was invoiced more than $350,000 by CAA and expects LPMA fees to exceed $500,000.

In October 2026, LPMA notified producers that it was moving to a material-type methodology while tripling fees in many instances. The filing alleges this happened without producer input.

The budgeting lesson extends beyond the auto aftermarket. EPR costs include compliance overhead such as consultants and software, and fee methodologies can change mid-cycle. The motion does not change any compliance deadline, so affected producers continue to owe both sets of obligations while the case proceeds. For an overview of EPR litigation across Oregon, Colorado and California, see our article on the Oregon EPR lawsuit.

What Financial Risks Should CFOs Build Into the 2027 EPR Budget?

Seven risks should shape a 2027 EPR budget: fees locked to 2025 data, non-binding California rates, approval and implementation timing, annual revisions, a plastic component fee that can rise, a proposed virgin plastic malus, and materials assigned to phase-out. Each can move the final bill after the budget is set.

A sound EPR budget plans for a range of outcomes. The following risks are drawn from CAA’s published documents and recent industry reporting:

• Data lock-in: CAA lists the calendar year 2025 annual supply report, due May 31, 2026, as the basis for the 2027 California program. Any error in that report flows into 2027 invoices.
  
• Rate uncertainty: CAA states that California’s 2027 rates remain preliminary pending regulatory approval of the program plan and should be considered non-binding until that process is complete.
  
• Approval and implementation timing: CalRecycle may respond by around December 27, 2026 with an approval, disapproval, conditional approval, a request for more information or a decision timeline. CAA will implement the plan within 90 days of approval.
  
• Annual revision: the 2027 budget is a 50/50 forecast, and the five-year budget spans $7.81 billion to $13.05 billion. CAA will update budgets and fees each year.
  
• Component-count sensitivity: the PPMF fee splits each producer’s share 80% by plastic weight and 20% by component count. Resource Recycling reports that if de minimis and exclusion rulings shrink component counts, the per-component fee will rise.
  
• Virgin plastic malus: CAA’s plan estimates a malus on all virgin plastic of $100 per ton in 2027, rising to $200 per ton in 2029, which is not shown in the October 1 fee schedule.
  
• Material phase-out: CAA sorted every covered material into three paths: maintain and strengthen, phase in, or phase out. Materials in the phase-out group show no reasonable path to the targets and must be discontinued in California, as SB 54 requires.

The phase-out risk deserves particular attention in plastic-heavy portfolios. By CalRecycle’s calculation, even PET and HDPE bottles, jugs and jars are more than 10 percentage points short of the 30% plastic recycling rate SB 54 requires in 2028. CAA has said it will seek temporary exemptions for many plastic types while it works to increase collection.

Cost allocation is also contested in court. In the Colorado case, producers argue that because they negotiate national pricing and cannot isolate Colorado costs, EPR fees end up borne by customers in states with no EPR program. That is a litigant’s argument rather than an established finding, but it shows how state fees can surface in national pricing decisions.

How Can Producers Reduce Packaging EPR Costs From 2028 Onward?

Packaging changes made in late 2026 cannot lower the January 2027 invoice, because California’s 2027 fees are calculated from calendar year 2025 supply data. Producers can still act on four levers that reduce fees in later years: plastic source reduction, lower-fee materials, fewer plastic components, and accurate supply data for each future reporting year.

Timing comes first. CAA’s Producer Resource Center lists the 2025 annual supply report, due May 31, 2026, as the basis for the 2027 California program, and CAA notes that fee rates change annually. Following the same annual cycle, packaging changes made now would first appear in supply data reported in later years and in the fees that follow. For 2027 itself, the practical action is verification: reconcile invoices against the supply data your company reported, by material category.

The first lever is plastic source reduction. To reach SB 54’s 25% plastic source reduction target by 2032, CAA proposes paying producers bonuses for cutting plastic, using recycled content and switching to reuse and refill. Bonuses start at $500 per ton for reductions against a 2026 baseline and $1,500 per ton against a 2023 baseline. A malus on all virgin plastic funds them, estimated at $100 per ton in 2027, $150 in 2028 and $200 in 2029, and CAA has designed the malus to be revenue-neutral over the plan period.

The second lever is material and format. All-in costs in the 2027 schedule range from $0.03 per pound for cardboard without a plastic component to $0.59 per pound for PVC and polystyrene film, plus $0.001 per plastic component. With a spread that wide, shifting volume between categories is one of the most direct ways to change future bills.

The third lever is plastic components. Any plastic component triggers the $0.03 reuse investment fee and the PPMF fees, and it can move the whole package into a higher base-fee category, as with paperboard rising from $0.02 to $0.05 per pound.

The fourth lever is data accuracy. CAA calculates producer fees using producer-reported supply data and applies passive eco-modulation factors automatically based on that data, so misclassified materials or estimated weights flow directly into invoices. Supply chain data platforms such as ASUENE can help keep material and weight data consistent across reporting years and business units.

Executives can turn these levers into a plan with five steps:

1. Reconcile 2027 invoices against your 2025 supply report by material category.
2. Build a SKU-level packaging inventory by material category, weight and plastic component count.
3. Model 2028 fees in scenarios, using the 2027 schedule as a starting point and assuming rates change annually.
4. Identify plastic reductions that would qualify for the proposed bonuses against the 2023 and 2026 baselines.
5. Flag packaging in phase-out or non-recyclable categories for redesign before maluses and discontinuation apply.

Conclusion: Turning Packaging EPR Into a Managed Cost

California’s 2027 EPR bill is largely set by data producers have already reported, so 2027 is a forecasting year and 2028 is the first year packaging decisions can change the outcome. A proposed $1.105 billion first-year budget, all-in plastic costs of up to $0.59 per pound, and Colorado’s mid-cycle fee changes all point to the same conclusion: the producers best positioned are those that know exactly what packaging they place on the market.

The next milestones are close. CalRecycle’s response window on the plan closes around December 27, 2026, the first invoices are planned for January 2027, and the next annual supply report will shape the fees that follow. Each milestone rewards producers whose packaging data is already organized.

Every step in this guide depends on one dataset: material category, weight and plastic component count for each SKU. Producers need it to verify 2027 invoices, model 2028 scenarios, qualify for proposed source reduction bonuses and avoid maluses on non-recyclable materials. The same packaging data also feeds Scope 3 measurement and carbon accounting, so building it once serves both EPR budgeting and climate disclosure. For more on that connection, see our article on how EPR compliance data builds a Scope 3 Category 12 inventory.

Now is the time for executive teams to commission a SKU-level packaging data inventory and a multi-year EPR cost model, before the first California invoices arrive. ASUENE supports companies in building the supply chain data foundation that connects packaging, Scope 3 and carbon accounting. Contact ASUENE to start planning your EPR and decarbonization data strategy.

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