The state of soft plastic recycling in the USA in 2026

For decades, store drop-off was the only option for most Americans to recycle soft plastics and flexi. Now, seven states have packaging EPR laws that will collectively force the infrastructure investment and packaging redesign the system needs. 

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Where Things Stand Right Now

A large market with almost no curbside soft plastic collection

Flexible packaging accounts for roughly 20% of the US packaging market by sales value, making it the second-largest segment behind corrugated [^1]. Within that, plastic-based flexibles dominate, and the gap between what is collected and what needs to be recovered is the defining flexible packaging challenge in the US.

Despite the signficiant volume of flexible packaging on the market inthe US, there is no curbside collection for soft plastic in the vast majority of American municipalities.

Soft plastic is one of the most problematic contaminants in mixed recycling: when flexible film enters MRFs, it wraps around rotating shafts, screens, and augers, jamming equipment and disrupting operations. Most MRFs actively screen out soft plastic to protect their rigid packaging streams.

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Around 70% of US residents live within a 3-mile drive of a retail store drop-off site for film plastics, according to a 2025 Sustainable Packaging Coalition study. Access exists; the consumer behavior change required to use it largely doesn't. Only 9% of total US plastic recycling capacity is dedicated to the resins that make up most soft plastic film.

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How Soft Plastic Is Collected in the USA

Store drop-off: the primary consumer route

The How2Recycle Store Drop-Off label is the main consumer-facing system for soft plastic recycling in the US. Qualifying packaging carries the label directing consumers to bring the material to drop-off bins at participating retailers. Major participating chains include Walmart, Target, Kroger, and CVS. 

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The bins accept clean, dry PE film: carrier bags, bread bags, produce bags, and packaging film that meets the quality standard. After collection, film is baled and sold to independent recyclers who process it into PE pellets or recycled lumber products.

This requires consumers to collect and transport packaging separately from curbside collected recycling. As a result, participation rates are low. The range of formats accepted is narrow: about 36% of How2Recycle member flexible packaging receives the Store Drop-Off label, and 64% is classified as Not Yet Recyclable. The long-term capacity of the store drop-off stream to handle the volume of flexible packaging in the US market is recognised across the industry as insufficient.

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Hefty ReNew and municipal pilots

The Hefty ReNew programme, available in select municipalities, offers consumers an orange bag system for curbside collection of plastics that normally cannot go in the recycling bin, including flexible film. The bags are collected separately by waste haulers and sent to designated processors.

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These pilots demonstrate technical feasibility. They have not yet scaled to a national model.

The Flexible Film Recycling Alliance

The Flexible Film Recycling Alliance (FFRA), backed by the Plastics Industry Association, launched in 2024 to improve film recycling from consumer, commercial, and industrial perspectives. It released a film recycling directory at major retail chains in late 2024 and is working to increase consumer awareness, expand drop-off availability, and develop stronger end markets for recycled film.

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It represents the industry's acknowledgment that the store drop-off system alone cannot solve the problem.

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What Actually Happens to the Material

Where store drop-off film goes

Film collected through the store drop-off network is baled at retailers and sold to a small number of national film recyclers. After cleaning and processing, the material is converted into recycled PE pellets used primarily in composite lumber products (decking, park benches), agricultural film, pipe, and bin bags. A growing but still small proportion is recycled back into new flexible packaging film.

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The MRF contamination problem

Even when soft plastic is separately collected and sent to a film recycler, input quality matters. Inks, adhesives, barrier coatings, and mixing of PE with PP or PET contaminate bales and reduce the quality of recycled output.

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WM's MRF pilot found that flexible film materials required secondary sorting before they could become feedstock even for chemical recycling. Without a clean, well-sorted input, the output is lower-grade and has fewer end market options.

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What the Regulations Require and When

Seven-state EPR momentum: the structural shift

Seven US states have enacted packaging EPR laws: California, Oregon, Colorado, Maine, Minnesota, Maryland, and Washington. These laws require producers to fund the collection and recycling of their packaging, with eco-modulated fees that make non-recyclable packaging more expensive. For flexible packaging, this creates a direct financial incentive to switch to formats with better recyclability classifications.

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Oregon's programme is live with fees active from July 2025. Colorado is live from January 2026. California launches January 2027. 

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READ MORE: For a detailed breakdown of each state's requirements, deadlines, and implications for flexible packaging, see our EPR series.

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California SB 54: the most consequential law

California's SB 54 goes further than any other US state or most global EPR laws. By 2032, all covered packaging must be recyclable or compostable, plastic packaging must achieve a 65% recycling rate by category, and total single-use plastic packaging must be reduced by 25% from a 2023 baseline.

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For flexible film, that 65% recycling rate target is described by packaging industry experts as requiring recycling rates five to six times higher than current levels for most flexible formats. Meeting it requires infrastructure investment and packaging redesign at scale, not incremental system improvement.

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What Soft Plastic Recycling in the USA Will Look Like

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State EPR programmes are now the mechanism through which the US market will fund its first real infrastructure investment in flexible film recycling. The voluntary store drop-off model could not force MRF upgrades, processing facility investment, or packaging redesign. Fee structures that penalise non-recyclable formats will.

EPR-driven infrastructure investment

Oregon, Colorado, and California's EPR programmes require producers to fund recycling infrastructure through their fee contributions. As fee collection builds over 2025 to 2027, capital becomes available for MRF upgrades, film sorting equipment, and new processing facilities. The Recycling Partnership's CalFFlex initiative is already working to improve collection, processing, and end market development for flexible film in California ahead of SB 54's 2027 launch.

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Advanced recycling for complex formats

Chemical recycling is the pathway for multi-layer laminates and contaminated film that mechanical recycling cannot handle. Advanced recycling capacity reached close to 1 million tonnes per year globally by end 2024. K&L Gates noted that the 2026 regulatory outlook for advanced recycling is broadly positive, and EPR laws are making advanced recycling an attractive compliance tool for producers.

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The US advanced recycling market is projected to grow materially through 2035.

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Mono-material design momentum

At the 2025 FPA Flex Forward panel discussion, value chain leaders agreed that simplifying flexible packaging structures, reducing inks, and shifting toward mono-material formats (primarily polyethylene) is "the starting point for everything." When brands consolidate material types, sortation improves, bale quality improves, and end markets see predictable feedstock.

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EPR fees that penalise complex laminates are accelerating this design shift faster than voluntary brand commitments ever did.

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AI-driven MRF sorting

Advanced AI-assisted near-infrared sorting technology is being deployed at MRFs to identify and separate flexible film from mixed streams. WM's MRF pilots, Myplas opening its first US flexible film recycling facility in Minnesota in 2023, and growing investment in film-capable MRF equipment are all evidence of the infrastructure investment starting to follow the policy commitments.

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By 2030, the number of US MRFs capable of handling film at commercial quality should be materially higher than today.

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The US outlook: The seven-state EPR wave, led by California's scale, creates investment certainty for processors, MRF operators, and technology companies that the store drop-off model never could. The flexible packaging formats of 2030 will be under far greater recyclability pressure than those of today. Brands that invest in mono-material recyclable structures now will be better positioned on cost, compliance, and consumer perception.

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What This Means for Your Packaging Decisions in the USA

Know your state EPR obligations

If you sell flexible packaging in California, Oregon, Colorado, Maine, Minnesota, Maryland, or Washington, you have current or imminent EPR registration, reporting, and fee obligations. Oregon and Colorado are live now. California launches January 2027.

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Act on registration now, not at deadline. Oregon's first fees were active from July 2025, and Colorado's from January 2026.

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The How2Recycle label matters

If your flexible packaging qualifies for the Store Drop-Off label, use it. It is the most widely recognised consumer recycling guidance for flexible packaging in the US and supports the store drop-off collection system. If your packaging does not qualify, be accurate in how you communicate end-of-life options.

California's SB 343 and AB 1201 create legal liability for inaccurate recyclability claims from late 2026.

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The EPR fee signal for flexible packaging

Oregon's 2025 fee schedule sets the average rate for flexible plastic at 76.7¢/lb — roughly ten times the paper/fibre rate (7.6¢/lb) and 1.7× the rate for rigid plastic (45.5¢/lb). These are the highest packaging fees among non-organic material classes in any active US EPR programme. Producer-level eco-modulation bonuses and maluses are then applied on top of these base rates. As more states go live with comparable material-cost logic, the compounded annual EPR exposure for a brand carrying flexible film across multiple states becomes a real line item.

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Frequently Asked Questions

Why can't soft plastic go in my curbside recycling bin in the US?

Soft plastic causes equipment problems at MRFs. Flexible film wraps around the rotating machinery used to sort rigid packaging, jamming sorting screens and augers and requiring manual clearing. MRFs also have difficulty distinguishing film from paper using near-infrared optical sorting, causing contamination of paper streams. 

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What is the How2Recycle Store Drop-Off label?

The Store Drop-Off label is issued by How2Recycle to flexible packaging that meets the quality standards for the store drop-off stream: PE film (resin codes 2 or 4), clean and dry, and free from features that contaminate the stream such as multi-layer structures, metallisation, or other resins. Submitting your packaging to How2Recycle for assessment is the way to determine whether your specific structure qualifies.

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Will California's SB 54 require my flexible packaging to be recyclable?

The 2032 mandate requires all covered packaging sold in California to be recyclable or compostable, and plastic packaging to achieve a 65% recycling rate by category. Most flexible plastic film formats are currently classified as not recyclable under CalRecycle's covered material category framework. Brands with California sales volumes need to be planning packaging transitions now to meet the 2032 deadline.

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Sources and Further Reading

• [^1] Flexible Packaging Association, 2025 State of the US Flexible Packaging Industry Report (2024 data). Available at flexpack.org.
• SPC North American film recycling analysis: sustainablepackaging.org
• Film recycling curbside challenges (GreenBlue, 2025): greenblue.org
• End markets and flexible film in California (Packaging World, 2025): packworld.com
• 2026 regulatory outlook advanced recycling (K&L Gates, 2026): klgates.com

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