Navigating California SB 54: ISR Plans and Annual Source Reduction Reporting Requirements  

Under California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54), producers of covered material must demonstrate measurable progress toward statutory plastic source reduction targets.  

Two distinct, but related, deliverables are required of producers: 

1. Individual Source Reduction (ISR) Plan – a forward‑looking planning submission that describes how a producer intends to achieve future source reduction targets. 

2. Source Reduction Report – an annual, backward‑looking report documenting actual plastic supplied and verified source reduction outcomes. 

Although closely linked, these documents serve different purposes, follow different timelines, and rely on different types of data (strategy vs. actuals). 

Statutory Source Reduction Targets (SB 54) 

SB 54 establishes statewide plastic source reduction targets relative to a 2023 baseline: 

• 10% reduction by 2027 

• 20% reduction by 2030 

• 30% reduction by 2032 

These targets apply to the total weight and number of plastic covered material components supplied into California. The targets will always apply against the 2023 baseline, regardless of the company’s growth.  

Minimum pathway requirements 

Within the overall source reduction targets, SB 54 requires that a portion of reductions be achieved through specific qualifying source reduction pathways. In particular: 

• Reuse, refill, and elimination, where these pathway‑specific minimums must equate to 2%, 4%, and 10% reductions, respectively, for the applicable target years. 

• Any reductions achieved by switching to non-recyclable or less likely to be recycled or composted materials, do not count. 

Not all reductions are treated equally: only reductions that meet SB 54’s pathway criteria may be counted toward statutory targets. 

1) Source Reduction Report (Annual Source Reduction Reporting) 

Purpose and role 

The Source Reduction Report is a recurring, annual compliance report documenting actual plastic supplied and actual source reduction outcomes achieved in the prior calendar year. 

This report serves as the mechanism by which producers demonstrate real‑world compliance with SB 54 source reduction obligations. 

Timing 

• Due May 31 of each year, beginning with reporting on post‑baseline activity. 

• Submitted alongside, or as part of, the producer’s annual supply report. 

Core content of the Source Reduction Report 

Unlike the ISR Plan, this report is backward‑looking and based on measured data. 

1. Actual plastic supplied (prior year) 

• Verified plastic weight and number of plastic components supplied into California during the reporting year. 

• Reported consistently with annual supply reporting requirements. 

2. Total source reduction versus baseline 

• Calculation of net source reduction achieved relative to the 2023 baseline. 

• Expressed in both:  

• plastic weight, and 

• number of components. 

3. Attribution by pathway 

• Actual reductions assigned to recognized source reduction pathways. 

• Uses the same conceptual structure as the ISR Plan, but reports actual outcomes rather than projections. 

2) Individual Source Reduction (ISR) Plan 

Purpose and role 

The ISR Plan is a recurring planning document submitted by each producer to CAA. It outlines the producer’s intended strategy for achieving SB 54 source reduction targets in future compliance years. 

The exact submission deadline has not yet been set.  

It will be 60 days after CalRecycle’s decision but certainly before August 1, 2026.  

ISR Plans are used by CAA to: 

• Aggregate producer‑level strategies, 

• Support program‑level planning, 

• Inform mechanisms such as eco‑modulation, and 

• Demonstrate to CalRecycle that the program is structured to meet statutory targets for 2027, 2030, and 2032. 

Core content of the ISR Plan 

The ISR Plan is forward‑looking and based primarily on projections rather than verified results. 

1. Baseline and prior reduction inputs 

• 2023 baseline plastic supply, expressed as:  

• total plastic weight, and 

• total number of plastic components in scope. 

• Documentation of any reductions already achieved prior to the baseline period, where available, to provide context (though baseline remains fixed at 2023). 

2. Projected supply volumes 

• Projected plastic weight and component counts for future years’ data corresponding to statutory targets:  

• projections supporting 2027, 2030, and 2032 reductions. 

• Projections should reflect expected business activity, packaging redesigns, and planned interventions. 

3. Projected source reduction activity by pathway 

Producers must describe how reductions will be achieved, allocated across recognized pathways, including: 

• Reuse / refill systems 

• Elimination of plastic components 

• Shifting to non‑plastic covered material 

• Right‑sizing / lightweighting / concentration / bulk formats 

• Alternative compliance (subject to limits) 

4. Methodology narrative 

• Explanation of calculation methods and assumptions, 

• Description of planned design changes or programs, 

• Rationale for pathway allocation and timing. 

The ISR Plan does not require certainty or verification, but it must be credible, coherent, and internally consistent. 

Source Reduction Pathways 

Source reduction pathways define the acceptable methods by which producers may reduce plastics supplied into California. 

Key principle 

Reductions are not counted if they result from changes that make packaging less recyclable, less compostable, or otherwise worse from a circularity perspective, even if plastic weight is reduced. 

For example: 

• Switching from recyclable plastic to non‑recyclable plastic does not count. 

• Shifts that simply change material characteristics without genuinely reducing plastic reliance are excluded. 

Supply Limitations by Year (Statutory Caps) 

In addition to pathway‑based reductions, SB 54 imposes absolute limits on how much plastic a producer may supply relative to its 2023 baseline volume: 

The producer’s baseline is the total plastic in scope placed on the California market in 2023. 

Special exclusions 

• Beverage containers subject to California’s beverage deposit system are excluded and do not count toward SB 54 source reduction targets. 

The Five Practical Source Reduction Pathways 

SB 54 groups the reduction methods into the following five core pathways, which support consistent quantification across both ISR planning and annual reporting: 

1. Reuse & refill systems: Transitioning from single‑use packaging to packaging designed for multiple uses or refills, reducing total plastic supplied over time. 

2. Elimination: Removing plastic components entirely (e.g., overwraps, lids, inserts), reducing plastic weight and/or component counts. 

3. Shift to non‑plastic covered material: Replacing plastic covered material with non‑plastic material where the change results in a permanent reduction in plastic supply. 

4. Right‑sizing / lightweighting / downgauging: Optimizing packaging design to use less plastic while maintaining performance and safety. 

5. Concentration / bulk / format changes: Reducing plastic through changes in product‑to‑packaging ratios (e.g., concentrates, bulk packaging). 

Bonus Source Reduction Pathway: Alternative Compliance 

CalRecycle and CAA have agreed on a bonus source reduction pathway to recognize the efforts in use of post‑consumer recycled (PCR) content. 

Generally speaking, post‑consumer recycled (PCR) content is plastic material that: 

• has completed its intended consumer use, 

• has entered a waste management system, and 

• has been recycled into new material. 

PCR excludes pre‑consumer or post‑industrial scrap that is reintroduced without entering the consumer waste stream. 

Role under SB 54 

Increasing PCR content does not automatically constitute source reduction. However, SB 54 allows, in limited, regulated circumstances, PCR increases to be credited toward source reduction targets as alternative compliance. 

Eligibility conditions for PCR alternative compliance 

• Maximum credit limit: PCR credit is capped at 8% of total plastic covered material sold, offered for sale, or distributed in California. 

• Incremental increases only: Only PCR increases above the baseline level are eligible; baseline PCR usage does not qualify. 

• Certification requirement: CAA anticipates requiring third‑party verification. Currently, APR PCR Certification Program (PCT) certificates are expected to be accepted. 

• Calculation methodology: Eligible PCR increases must be calculated using the Alternative Compliance Formula (ACF), designed to “accurately and reliably” quantify the reduction in virgin plastic attributable to PCR increases, accounting for: 

• plastic weight, and 

• number of plastic components. 

Important: The ACF is only valid if it is formally included in CAA’s program plan and approved by CalRecycle. Approval pending.  

How CGlobal Can Help: Navigating California SB 54 

As the regulatory landscape shifts from registration to active reduction, CGlobal, the specialized EPR consulting division of H2 Compliance, simplified these complex obligations. We act as a technical extension of your team to bridge the gap between statutory targets and operational reality through: 

• Strategic ISR Plan Development: We support you with understanding the Individual Source Reduction Plan requirements. Our consultants ensure your strategy aligns with Circular Action Alliance (CAA) expectations and pathways. 

• Annual Reporting & Data Management: CGlobal handles the “administrative heavy lifting” of Source Reduction Reports. We create robust data collection frameworks to help you capture actual plastic weights and component counts, ensuring your annual May 31 submissions are accurate and audit-ready. 

• Technical Compliance: From navigating the Alternative Compliance Formula (ACF) to evaluating your submissions and ancillary obligations, we provide the technical rigor needed to minimize regulatory risk. 

• Proactive Regulatory Monitoring: Our team tracks over 120 global regulations, ensuring you are never blindsided by shifting deadlines or new CalRecycle requirements. To stay ahead of evolving EPR laws in California and beyond, you can also subscribe to our Legislative Compass regulatory tracker. 

Take the Guesswork Out of SB 54 Compliance 

Don’t wait for the deadlines to secure your compliance strategy. Whether you need to establish a 2023 baseline, submit reports, or audit your current source reduction pathways, our experts are ready to assist. 

Ensure your business is prepared for California’s evolving circular economy requirements. 

Contact Our Consulting Team

Published April 10th, 2026

Article generated with the assistance of Artificial Intelligence.