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with fees tied to how recyclable or reusable those materials are. These fees fund recycling infrastructure, education, and compliance monitoring.
Pallets and Transport Packaging: In or Out?
When it comes to wooden pallets and other secondary or tertiary packaging, items not seen by consumers but essential to distribution, the EPR picture gets complicated.
“Oregon has mostly set pallets aside,” Owens explains. “They consider most pallets to be reusable and not subject to fees, unless they’re clearly designed for single use.” He says untreated, one-way pallets or custom wooden crates used for shipping large or fragile goods may still fall under reporting requirements.
California, on the other hand, has taken a stricter stance. “California puts all transport packaging in scope,” Owens warns. “Unless you can prove reuse, wooden pallets may be classified as single-use and subject to fees.” The current draft suggests untreated wood packaging could be assessed up to $2.10 per pound—a steep cost for heavy-duty shipping materials.
“If you’re shipping a 100-pound crate, that could mean over $200 in fees, just for the packaging,” he says.
Colorado is following a similar path but is still in earlier stages of program de- velopment.
Data and Documentation: The New Compliance Frontier
One of the key challenges with EPR is data tracking. Producers must document how much packaging they use, what type, and where it ends up. For whitewood pallet users—where reuse is often informal and decentralized—this creates new pressure to monitor and report accurately.
“There’s a big shift coming,” Owens says. “If you can’t show where your pallets go, or prove that they’re reused or recycled, you could be hit with significant fees. Auditors will be looking for gaps in reporting, and if they find discrepancies, producers could be fined and back-charged.”
That’s why companies need to get ahead of the curve—by improving asset tracking, partnering with reliable recyclers, and maintaining documentation for up to five years, as required by California’s law.
“If a Kroger DC sends 5,000 pallets a week to a recycler, they may need proof showing how many were repaired, reused, or scrapped,” Owens explains. “Otherwise, the unrecovered portion could be deemed single-use and penalized.”
Plastic Pallets and Microplastics
Plastic pallets also face scrutiny—especially in California, where concerns about microplastic pollution are part of the regulatory discussion.
“There are provisions targeting plastic shedding from friction,” says Owens. “Reusable plastic pallet providers need to understand their product’s performance and be ready to answer customer questions about micro-particle release. That may even influence what materials are acceptable in certain applications.”
Owens points out that major players in the plastic pallet sector likely already have lifecycle data and environmental impact assessments. “They’ll be better positioned to navigate these rules than smaller operators who don’t have that level of insight.”
Competitive Advantage Through Proactive Compliance
Despite the challenges, Owens believes EPR could be a strategic opportunity for smart pallet companies.
“Look, this is a lot to take in. But the reality is that most of your competitors aren’t ready either,” he says. “If you get fluent in the language of EPR—reuse rates, eco-modulation, net recycling—you can build trust with your customers and create switching costs. That’s how you lead in a market like this.”
Owens says companies that embrace data, tracking, and EPR reporting requirements may not only reduce compliance risk, but also win business from brands that are under pressure to meet sustainability targets.
He adds that reusable transport packaging, including wood and plastic pallets, offers another advantage: simplicity. “The recordkeeping burden for recycling is heavy. If you shift to reuse models, you cut down on bureaucracy while hitting sustainability goals.”
What Comes Next?
Final rules and fee schedules in California and Colorado are still in development. “It’ll be another six months before we get clarity,” Owens says. “But don’t wait until it’s all finalized. Start building your systems now.”
He recommends pallet companies take the following steps:
Audit your pallet programs to determine which products are truly reusable.
Work with recyclers to document outcomes and recovery rates.
Educate your team on EPR language and responsibilities.
Prepare to report packaging data accurately and on time.
Final Thoughts
EPR is here—and growing. While the rules are still forming, West Coast pallet providers can’t afford to sit back and hope they’ll be exempt. With millions of pounds of wood and plastic packaging in motion every day, the stakes are high.
“This isn’t just a regulatory issue,” Owens concludes. “It’s a business risk and a business opportunity. The companies that get this right will gain a competitive edge—not just in compliance, but in how customers perceive their value.”