palletcentral

Pallet C e nt ral • Ma rch -Ap r il 2 0 26 1 1 Kate Doherty serves as Director of Government Affairs at NWPCA and manages the association's Political Action Commiee, PalletPAC. She can be reached at kdoherty@palletcentral.com or 703.519.6104. California Senate Bill 54 California SB 54 positioned the state to become the national model for packaging EPR. For industries reliant on reusable transport packaging, especially wooden pallets, the stakes could not be higher. e law's implementation carries significant potential to influence costs, supply chain decisions, and regulatory frameworks far beyond California's borders. e bill requires producers of single-use packaging to register with a Producer Responsibility Organization (PRO) and pay fees to fund end-of-life processing. e rulemaking process will determine which packaging materials are covered under the bill and set rates for each covered material. Proposed implementation guidance included wood packaging products, meaning that if wooden pallets are misclassified as single-use, clients in California could face fees on the weight of the pallet, estimated anywhere from $0.60 to $2 per pound. Understanding The Risk: What SB 54 Could Mean For Pallets SB 54 targets packaging that is "single use" and "typically not reused." at definition simply does not apply to wooden pallets. e industry already achieves what SB 54 intends to encourage: reuse, repair, recovery, and recycling at scale. But early implementation materials from CalRecycle incorrectly included pallets as examples of covered material, creating major challenges. Some companies estimated $1 million–$2 million annually in new pallet related fees if wooden pallets remained in scope. In some cases, these fees could more than double the cost of a pallet. If SB 54 misclassified pallets, not only would manufacturers, distributors, and retailers face higher operational costs but pallet users might even be incentivized to switch to alternative, less sustainable options. Because California often sets the benchmark for state legislation, any misclassification in California could cascade into national policy, making it critical to correct the record now. Association Advocacy: A Multi Front, Data Driven Strategy NWPCA deployed a coordinated approach leveraging research, coalition partnerships, and direct engagement with state officials. We are leading an aggressive advocacy effort to ensure that wooden pallets are not misclassified as "covered material" under SB 54. Doing so is essential to avoiding unnecessary cost burdens, fee assessments, and market distortions that could ripple throughout national commerce Our comments, research, and advocacy emphasized a robust set of undisputed facts: wooden pallets are engineered for long term use, with life cycle analyses showing from 10 to 66 trips per pallet; over 95% of wooden pallets nationwide are repaired, remanufactured, or recycled, making them the highest recovering packaging product in the US; only 0.8% of California's Municipal Waste Stream consists of wooden pallets; and 88% of pallets entering California landfills are recovered or diverted. In short, wooden pallets already embody circularity. ey do not belong in the same regulatory category as disposable packaging. anks to NWPCA's continued engagement, the industry has made significant headway. CalRecycle has formally acknowledged that most wooden pallets are not single use and therefore may be considered reusable rather than covered material under the law. Additionally, CalRecycle acknowledged in discussions that there is a potential avenue for exclusion under specific provisions of the regulation. ese conversations mark a significant breakthrough, confirming that regulators recognize the unique nature of pallets and their alignment with SB 54's broader environmental goals. However, the agency has not yet issued the clear, undisputable exclusion NWPCA continues to seek. While more work remains as the regulators move to finalize implementation, this milestone demonstrates real progress grounded in data, advocacy, and a unified advocacy effort across industries. To achieve this, NWPCA will continue to press CalRecycle for explicit guidance that wooden pallets fall outside SB 54's scope, utilize our coalition to emphasize the critical cross sector importance of wooden pallets, increase political engagement in Sacramento to ensure policymakers fully understand the downstream economic impacts of misclassification, and continue to elevate the industry as a model for circular, sustainable packaging. Protecting A Circular Success Story Wooden pallets are everything SB 54 aims to promote: durable, reusable, repairable, recyclable, and essential to the efficient movement of the global supply chain. ey are not the problem SB 54 was crafted to solve. However, without continued vigilance and active engagement, the industry could face unnecessary, costly consequences. "SB 54 targets packaging that is "single use" and "typically not reused." That definition simply does not apply to wooden pallets."

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