California’s upcoming restrictions on compostable packaging have raised concerns among some in the foodservice industry, according to public reporting and trade group statements. The new law, which addresses materials allowed in organic waste streams, may impact the types of compostable products accepted in California, depending on final enforcement and guidance. Some operators, distributors, and manufacturers have expressed concern that the policy could reduce access to compliant packaging and increase costs, according to statements shared by industry groups.
The policy, expected to take effect in 2026, outlines new criteria for what qualifies as compostable packaging in California’s organic collection systems. Local jurisdictions may face penalties under state law if enforcement requirements are not met, based on existing provisions under SB 1383. Industry groups have suggested the move could slow adoption of compostable packaging and complicate sourcing strategies for some operators.
Compostable Packaging May Be Subject to Stricter Standards
The law, Assembly Bill 1201, restricts what can be marketed or sold as “compostable” for use in California’s organic waste collection. Packaging must be either:
Approved by the Biodegradable Products Institute (BPI)
Included on a list of acceptable items for organic waste programs
Certified as made of 100% fiber with no added fluorinated chemicals
Mixed-materials packaging, including PLA-lined fiber products, could be impacted unless listed as approved or certified, based on current interpretations.. This requirement impacts many items commonly used by restaurants and distributors, from clamshell containers to cutlery and hot cup lids.
Industry Groups Highlight Potential Impacts on Packaging Availability
The Sustainable Packaging Coalition, which includes major compostable suppliers, has expressed concern over the law’s implementation. In a letter to the state, the group stated that “the policy may have a chilling effect on compostable packaging use.”
They argue that the lack of a centralized, authoritative statewide list of acceptable packaging materials adds confusion and could lead to inconsistent enforcement across jurisdictions. Without additional clarity, some manufacturers may reconsider distribution to California, which could present compliance questions for operators.
Restaurants and distributors operating in multiple regions may also find it more difficult to standardize packaging across locations.
Operational Complexity Could Increase For Foodservice
For operators currently using compostable packaging, the law may introduce added steps to ensure compliance.
Verifying BPI certification or approved product status
Working with distributors to audit SKUs and confirm regulatory alignment
Identifying fiber-based alternatives that meet chemical restrictions
While the state’s intention is to reduce contamination in organic waste streams, some industry stakeholders have raised concerns that the approach could unintentionally limit compostable packaging innovation.
Looking Ahead: 2026 Enforcement & Preparation
The California Department of Resources Recycling and Recovery (CalRecycle) will oversee enforcement starting in 2026. Jurisdictions that allow unapproved compostable packaging in their organic streams could face penalties under SB 1383, the state’s broader organic waste law.
Foodservice stakeholders are encouraged to prepare now by evaluating existing packaging portfolios, discussing alternatives with suppliers, and staying updated on CalRecycle guidance. Trade associations are actively advocating for clearer criteria and a centralized process to identify compliant materials.
For many in the foodservice space, the next two years will be critical for adapting to the new rule while maintaining operational efficiency and sustainability targets.
This article is intended for informational purposes only and does not constitute legal advice. Operators and businesses should consult with regulatory experts or legal counsel to ensure compliance with California state regulations.
