As producers prepare to comply with California extended producer responsibility law SB 54, the state is becoming a testing ground for reusable packaging collection and refill programs.
CalRecycle issued a set of source reduction needs assessments earlier this year that gave an initial look at what this means for collection systems in the state. These reports — one focused on the actions and investments needed across the value chain, and another delved into opportunities and barriers — lay out the costs, benefits and complexities of reuse and refill packaging systems.
SB 54 requires producers to reduce plastic packaging materials by 10% by 2027, 20% by 2030 and 25% by 2032. At least 10% of that must come from source reduction – meaning actually eliminating some single-use packaging through strategies like transitioning to refillable or reusable packaging or foodservice ware.
Research and consulting firms Eunomia and Perpetual contributed to the studies, which explore various reuse models and strategies. The assessments note that closed-loop reuse systems, where haulers are not needed if collection and cleaning is done onsite, are among the most attractive in the near term.
The most effective examples included transitioning from single-use to reusable foodservice ware in schools or stadiums, expanding business-to-business reuse models and scaling business-to-consumer models that are based on “prefill” packaging.
A prefill model relies on reverse logistics operations to collect and clean reusable packaging. In California, Straus Family Creamery uses returnable glass bottles for some of its milk products. Consumers pay a $3 deposit, which is refunded when they return the empty bottle to the store. According to Straus, customers return and reuse more than 3.5 million bottles annually.
Elizabeth Balkan, a zero-waste policy and systems consultant who worked with Perpetual on the assessment, said prefill models reduce consumer burden while allowing the producer to reduce packaging waste.
In a retail setting, the product looks no different than a single-use package, she said. “It doesn't ask that the consumer provide their own packaging. It doesn't require the consumer to remember to bring it to the store and then to engage in the act of the filling.”
But moving from single-use to a refillable approach could require the producer to make potentially expensive changes to its supply chain, Balkan noted. The needs assessment estimated each new packaging design can cost $100,000.
Learning from Petaluma’s reuse pilot
The Petaluma Coffee & Tea Co. is a well-liked coffee shop in the Bay Area, known for its on-site roasting and casual approach. But there’s something that the shop’s retail and marketing manager, Ashley Harris, really hates.
During the early days of the COVID-19 pandemic, a plumbing problem in the cafe reduced its dishwashing capacity. And ever since, the cafe has had to rely on single-use cups.
“We see the waste that goes in and out with the to-go cups. It’s pretty painful,” she said.
So in early 2024, when Harris learned about a citywide cup reuse program, she was excited to participate.
Petaluma Coffee & Tea was one of 30 businesses in the Sonoma County town, which has around 59,000 residents, to participate in the Petaluma Reusable Cup Project. The pilot launched in August of 2024 and ran for 12 weeks.
Led by Closed Loop Partners’ NextGen Consortium, it sought to test the feasibility of a citywide reuse program designed to displace reliance on single-use cups. It also helped inform the project partners — which included Starbucks, Coca-Cola, McDonald’s and Yum! Brands — how reuse and refill models could factor into their businesses as they look to comply with EPR in California
“Reuse is not something that any one brand can solve alone,” said Carolina Lobel, senior director at the Closed Loop Center for the Circular Economy, Closed Loop Partners’ innovation arm. “We need full citywide programs to scale use.”
Participating businesses served beverages in purple cups, made from polypropylene, that customers were asked to return to one of 60 large purple bins placed around Petaluma.
Lobel called the results of the Petaluma pilot encouraging. The program was supported by Muuse, a company that supports reusable packaging systems through operations and logistics, and Dispatch Goods, which provided cleaning services.
Recology, Petaluma’s contracted hauler, supported the program by setting up a special collection stream to capture any purple cups that ended up in the recycling stream. Of the 220,000 purple cups deployed during the pilot, Lobel said, Recology captured 24,000 of the cups. The cups were then baled and recycled, rather than reused, due to damage sustained during transit and processing.
Scaling the business model for reuse and refill
As seen in Petaluma, such systems can work but reaching economies of scale also can require more upfront investment.
Costs associated with converting from single-use packaging or foodservice ware to a reuse or refill model are significant, the assessments found.
Cumulative investments to meet SB 54 requirements could range from $8 billion to $15 billion. This is an overall cost, not specific to any producer, and the report notes that efficiencies in design and logistics could reduce costs. Refill and reuse project costs could be reallocated from elsewhere in the business, or covered by new spending.
Still, the report’s modeling suggests providers would need to make investments in reusables quickly, noting that capital expenditures could more than double between 2027 and 2030.
Most of the costs detailed are operational, such as those related to transportation, logistics and labor. The report also estimates the infrastructure changes and reuse systems needed to support source reduction strategies could create between 2,700 and 5,400 jobs in California.
The needs assessment specifically did not model or analyze the role that waste haulers could play in reuse systems. Early last year, when CalRecycle first issued its RFP for the source reduction study, haulers and recycling service providers were among the constituencies that vendors were asked to engage.
In an email, CalRecycle spokesperson Melanie Turner said the list was “refined to prioritize stakeholders most directly involved in source reduction and reuse/refill systems, including retailers, manufacturers, trade associations, and reuse/refill operators.”
Turner noted that haulers and recyclers remain important stakeholders under SB 54 and that they were included in other studies, including a report about the state of collection, processing and end markets.
The agency’s source reduction report did include a short case study about Cyclei, a reusable container collection system that has been piloted in Berkeley, in collaboration with the Ecology Center, the city’s recycling service provider.
Julia Heath, the city’s recycling manager, confirmed via email that the pilot is not currently active.
The opt-in system was designed to offer consumers a way to send packaging such as food serviceware from participating restaurants or consumer brands, including Straus Creamery, back to those providers. Cyclei provided customers with a collection bag, designed to be hung from the handle of the city’s residential recycling totes, to return these items.
Another possible example of reuse and refill intersecting with more traditional recycling systems is in Washington.
Recology operates five stores in Seattle suburbs which provide residents a place to drop off items not collected in curbside systems, such as electronics and batteries. Co-located with these centers are retail stores where customers can bring their own reusable containers, or buy them, to purchase soaps, detergents and other household items in bulk.
Recology spokesperson Robert Reed said the company plans to open the same type of reuse stores in California, but does not yet have a timeline or location. Reed said generally that Recology is committed to partnering with cities to meet SB 54 goals.
Perpetual Executive Director Ellie Moss said she’d like to see haulers involved in reuse systems, starting at the design stage.
“It's really important that we think about what infrastructure already exists and where it's feasible to leverage that. It reduces the upfront investment needed to get the reuse systems off the ground,” she said. “I think we all want to avoid things like stranded assets and duplicating vehicles on the road.”
She noted, however, that reusables require specific material handling, for which conventional recycling trucks would not be well suited.
In the Petaluma pilot, Lobel said, Recology installed special computer vision systems to segment the purple cups received at the MRF. Being able to segment those cups created cleaner, more valuable PP bales than would have otherwise been sorted, she added.
While the costs of setting up reuse systems could be significant, so could the improvements to public health and to the environment. That’s according to comments made during an April 17 meeting of SB 54 advisory board.
Renée Sharp, who is the director of Natural Resource Defense Council’s plastics and petrochemical advocacy, pointed to a recent study from Duke University that calculated the total ecological and social costs of plastic production and use are between $436 billion and $1.1 trillion annually across the U.S.
Advisory board member Thomas Helme, who co-founded Valley Improvement Projects, noted that the lifecycle costs of single-use plastic packaging fall disproportionately on overburdened communities.
Helme also urged fellow board members to think expansively about what “closed loop” means. “Small, ethnically-connected communities are already a closed loop,” he said, noting that community members already frequent the same markets and restaurants, which could offer efficiencies when setting up reuse systems. He suggested turning to community-based groups to experiment with pilots.
Looking ahead, Lobel of Closed Loop Partners said SB 54 could be a major driver of reuse beyond just California. “If we figure out how to do this in California, we'll have a playbook to scale reuse in the rest of the country.”
Back at Petaluma Coffee & Tea, Harris said she hopes to see another local reusable foodware system in the future.
Closed Loop Partners does not have any immediate plans to bring a program back to Petaluma, but is working on a new concept. The group is now building Reuse Cities, a “city-by-city” reusable service ware program that’s set to launch in San Diego early next year.
In the meantime, Petaluma Coffee & Tea is saving up so it can upgrade its plumbing and bring coffee mugs back to the cafe.
