California has finalized its sweeping packaging regulations under SB 54, the landmark bill passed in 2022 and now fully implemented by CalRecycle. The law was designed primarily to slash plastic packaging waste, but it was written broadly enough to rope in transport packaging if it is designed for single-use applications. This initially created some ambiguity and concern about how the law would be applied to most wood pallets used in producing a wide variety of goods.
Here’s the bottom line for the wood pallet industry: reusable pallets are out. They’re excluded. And that’s a very big deal for wood pallets.
Melanie Turner, SB 54 communications manager for CalRecycle, explained, “Only single-use packaging and food service ware is considered covered material under SB 54. Pallets that meet the reusable packaging criteria pursuant to PRC section 42041(af) and 14 CCR section 18980.2.1 of the regulations would not be considered covered material. Single-use pallets may be covered material.”
So what separates a reusable pallet from a single-use one under the law? The regulations lay out several criteria. A pallet must be designed and marketed for multiple uses, built for durability, supported by infrastructure that enables reuse and recycling, and actively recovered, inspected and repaired as necessary to facilitate multiple cycles.
That’s not a high bar for most of the wood pallet industry. In practice, virtually all new pallets, all rental and pooled pallets, and the vast majority of used pallets check every one of those boxes. Only a pallet that is genuinely designed or capable of making just one trip would fall into the single-use category.
The research backs this up. Studies from Virginia Tech show that conventional wood pallets are routinely reused or repaired for reuse multiple times, with typical lifecycles estimated between 5 and 10 trips and sometimes more. According to the wood pallet sector’s Environmental Product Declaration (EPD), wood pallets can make 10-66 trips in a typical life cycle. See the official research at https://tinyurl.com/5xd8t4db. Virginia Tech’s life-cycle analysis work has noted average failure points around 11 cycles in certain studies. And research funded by the Pallet Foundation found that 95% of wood pallets are recycled or recovered rather than landfilled. That’s an enviable sustainability record by any measure.
Jason Ortega, senior vice president of Woodpack Global, commented, “We are grateful to CalRecycle for following the data and stating that wooden pallets are assumed to be reusable. This is because pallets can be reused by the pallet user as needed, and there is a robust infrastructure to return them for reuse within the supply chain as the regulation requires.”
CalRecycle’s own noncovered material guidance reinforces this view, specifically listing a white-wood pallet as an example of reusable packaging that falls outside the covered material designation provided in 14 CCR section 18980.2.1.
Ortega of Woodpack Global clarified, “In the guidance, a pallet is listed as an example of reusable packaging, and CalRecycle explains ‘Assumed to meet reusable criteria pursuant to 14 CCR Section 189.80.1.1’…CalRecycle’s guidance makes it clear that when assessing the need to include pallets in a company’s reporting, the company can start from the position that it doesn’t have to.”
What Producers Need to Know Right Now
The new regulations took effect May 1, 2026, and the clock is ticking on compliance deadlines. By June 1, 2026, producers of products that use covered materials must do one of the following: register with the Circular Action Alliance (CAA) and submit supply chain data; comply independently by applying to be an independent producer; or register with CalRecycle and apply for the Small Producer Exemption (for businesses under $1 million in gross sales in the state).
Here’s the important part for most pallet users and shippers: if your transport packaging qualifies as reusable, you are not a producer of covered material under SB 54 , and you are not required to register, pay fees, provide data or otherwise comply with the law. As Turner confirmed, “Entities that are not producers of covered material are not required to register as producers.”
That exemption carries significant financial weight. The example fee schedule recently published by the Circular Action Alliance would assess organic wood material at two cents per pound for covered packaging. On a standard pallet, that translates to roughly 90 cents to a dollar or more per unit depending on weight. Multiply that across a supply chain and the numbers add up quickly. The final rates could be very different depending on how the packaging is classified. The exclusion spares the wood pallet industry from a potentially costly new financial burden that wouldn’t have encouraged greater reuse. For full compliance guidance, visit CalRecycle’s producer guidance page: https://tinyurl.com/nfs67t9x.
A Model the Rest of the Country Should Notice
Other states are watching California and moving toward similar packaging waste regulations. But what’s happened here sends a clear message: the wood pallet sector is doing things right. Other states that have passed comparable legislation have already exempted or excluded wood pallets for the same reasons California has.
Ortega put it well, “The robust recovery infrastructure required by this regulation exists in our sector thanks to strong economic incentives, resulting in wooden pallets having the highest documented recovery and reuse rates in the supply chain. The data collected and analyzed through funding from the Pallet Foundation, with the support and participation of our members, has proven invaluable in protecting our industry and ensuring that policy-makers recognize we are setting the gold standard for circularity and reuse.”
If you’re using wood pallets to ship your products, you should be in good shape under these emerging regulations. The industry has built a genuine sustain-ability story — one grounded in data, infrastructure and decades of practice.
Which brings me back to a phrase we never get tired of saying around here: Wood is good.
