New Law Sets Strict Standards for Compostable Packaging by 2026

Effective Date: January 1, 2026

Key Changes:

• California’s AB 1201, the Compostable Product Standards Act, will enforce some of the nation’s toughest labeling rules for “compostable” and “home compostable” products.
• Under the law, products must qualify as allowable organic inputs under the USDA National Organic Program (NOP).
• Currently, only unprinted, virgin paper qualifies—excluding most compostable plastics and packaging in use today.
• The law aims to reduce harmful substances, such as PFAS ("forever chemicals"), from entering the compost stream.
• AB 1201 aligns with California’s broader plastics regulations, including SB 54, which mandates all single-use plastics be either recyclable or compostable by 2032.

Industry Concerns:

• Most existing compostable packaging will not meet the new standards.
• Producers and advocacy groups like the Biodegradable Products Institute (BPI) are calling for regulatory clarity and an expanded definition of compostable materials at the federal level.
• A BPI petition to include compostable plastics under NOP rules is still under federal review, with delays expected due to recent administrative changes.

Potential Extension:

• AB 1201 allows for a possible five-year extension for products likely to become eligible under evolving federal standards.
• BPI has formally requested this extension, but approval is uncertain and depends on federal decisions still in progress.

What Companies Should Do:

• Prepare for the likelihood that most compostable packaging won’t qualify for labeling in California by 2026.
• Monitor both state and federal regulatory updates.
• Develop contingency plans for packaging and labeling strategies.

Without changes at the federal level, the majority of compostable packaging today will be non-compliant in California by 2026.