By Leonard L. Gordon, Shahin O. Rothermel, Tyler Welti & Kaelyne Yumul Wietelman

As we anxiously await the Federal Trade Commission’s (FTC) update of the Green Guides, advertisers should keep in mind the various “green” state laws that could affect the production and marketing of certain products. For example

Voluntary Carbon Market Disclosures Act (VCMDA)

The VCMDA is a new California law that imposes disclosure requirements on public and private companies of all sizes that:

  • Operate in California and/or make claims in California regarding their climate performance, including claims regarding the achievement of net zero emissions, that the entity (or its product) is carbon neutral and/or does not add net carbon dioxide or greenhouse gas (GHG) emissions, that the entity has made “significant reductions” to its GHG emissions, or similar claims
  • Operate in California and/or make climate-performance claims in California and use or purchase voluntary carbon offsets (VCOs) sold in California
  • Market or sell VCOs in California (regardless of whether they make climate-performance claims)

These companies must disclose on a website:

  • The name of the business entity selling the offset and the offset registry or program
  • The project identification number, if applicable
  • The project name as listed in the registry or program, if applicable
  • The offset project type, including whether the offsets purchased were derived from a carbon removal, an avoided emission, or a combination of both, and site location
  • The specific protocol used to estimate emissions reductions or removal benefits
  • Whether there is independent third-party verification of company data and claims listed

Disclosures must be updated at least every year.

Additionally, covered companies must disclose on their websites how their “carbon neutral” or similar claims were determined to be accurate or accomplished, how interim progress toward that goal is being measured, and whether there is an independent third-party verification of the company data and claims listed.

The VCMDA became effective on January 1, 2024, but its sponsor has submitted a formal letter to the California Assembly stating that he intended the first annual disclosure to be due on January 1, 2025. 

The law applies to both public and private companies, regardless of size. Companies that do not comply will be subject to a civil penalty of up to $2,500 per violation per day for each day that that information is inaccurate or unavailable on the internet website, up to $500,000. The law can be enforced by California’s attorney general and city and district attorneys. 

Minimum Recycled Content Requirements

In addition, states are passing more laws requiring certain plastic products to be made of a percentage of recycled material. While there are some products that are exempt from these state-mandated requirements such as packaging containers that contain drugs, medical devices, cosmetics, food, or infant formula, these states are applying minimum recycled content requirements broadly. Here is an overview of some states with minimum recycled content requirements: 

Currently in Effect

As of January 18, 2024, New Jersey requires rigid plastic containers to contain on average at least 10% recycled content starting in 2024, increasing by 10% every three years up to 50% by 2036. New Jersey also provides for recycled content standards for plastic beverage containers, glass containers, paper and plastic carryout bags, and plastic trash bags.

Since 2006, California has required rigid plastic packaging containers, defined broadly as any plastic package that has a relatively inflexible finite shape or form with a minimum volume and capacity threshold, to meet at least one of the following criteria:

  • Be made from 25% postconsumer material
  • Have a recycling rate of 45% if it is a product-associated rigid plastic packaging container or a single resin type of rigid plastic packaging container
  • Be a reusable or refillable package
  • Be a source reduced container
  • Be a container containing floral preservative that is subsequently reused by the floral industry for at least two years

Since 1995, Oregon requires any rigid plastic containers to meet one of the following compliance options:

  • Contain at least 25% recycled content
  • Be made of plastic that is being recycled in Oregon at a rate of 25%

Rigid plastic containers, in the aggregate, were recycled in Oregon at a rate of at least 25% that year. All rigid plastic containers have automatically been considered compliant since its effective date in 1995, as the aggregate recycling rate for rigid plastic containers in Oregon has far exceeded 25% every year.

Since 1995, Wisconsin requires that all plastic containers consist of at least 10% recycled or remanufactured material, by weight. Wisconsin defines plastic containers as “an individual, separate, rigid plastic bottle, can, jar or carton, except for a blister pack, that is originally used to contain a product that is the subject of a retail sale.”

Not Yet in Effect

Effective January 1, 2025, Washington will require minimum recycled content for a variety of products such as plastic trash bags and plastic beverage containers. Additionally, the law will require minimum recycled content standards for “household cleaning and personal care products that use plastic household cleaning and personal care product containers,” as well as certain other packaging and containers, such as plastic trash bags and plastic beverage containers.

The law defines household cleaning and personal care products as laundry detergents, softeners, stain removers, household cleaning products, liquid soap, shampoo, conditioner, styling sprays and gels, or lotion, moisturizer, facial toner, and other skin care products. The minimum recycled content standards will become progressively more restrictive over time.

It is critical to keep these specific requirements in mind while manufacturing plastic products. Important to note, the package or product manufacturer or producer is typically responsible for compliance with the above laws. Because certain plastic products must include some recycled content, it may be tempting to advertise products as containing recycled materials. However, businesses should pressure-test the claim to ensure it is properly qualified and fully substantiated, complies with applicable state laws, and can withstand regulatory scrutiny and competitor or class action challenges.

For more insights into advertising green claims and general advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter. To learn more about Venable’s Advertising Law services, click here or contact one of the authors.