Making environmental marketing claims is already difficult. Between California’s evolving requirements, the Federal Trade Commission’s (FTC) Green Guides, and a growing number of state laws, even well-intentioned companies can struggle to determine what they can say on product packaging.

Congress is now trying to simplify things. On August 7, Rep. Lou Correa (D-Calif.) and Sen. Jeff Merkley (D-Ore.) introduced the Truth in Labeling Act of 2026, which would establish national standards for claims such as “recyclable,” “compostable,” “reusable,” and “refillable.” The Environmental Protection Agency (EPA) and FTC would develop the technical standards and standardized on-package labels.

Although the stated goal is greater consistency, it is unclear whether the bill achieves that goal.

Federal Environmental Labeling Meets State Laws

The bill does not broadly preempt state environmental labeling laws. Instead, it largely preserves them, meaning the federal requirements would operate as a baseline rather than a single nationwide standard.

That means complying with the federal law would not necessarily protect companies from California laws such as SB 343 or AB 1201. Companies selling nationally could still find themselves confronted by multiple, overlapping regulatory regimes.

The bill also would diminish the role of the FTC’s Green Guides. Congress expressly describes the current guides as outdated and would replace much of their flexible guidance with statutory requirements. The FTC would remain the primary enforcement agency, but many of today’s Green Guides analyses would give way to more prescriptive rules. 

This will likely present conflicts with state laws that explicitly instruct courts to give deference to the FTC’s guides and interpretations when determining violations under state consumer protection and advertising laws.

One notable change involves Resin Identification Codes. Plastic products could continue using Resin Identification Codes, but the familiar chasing-arrows symbol could only be used if the material qualifies as recyclable. That distinction is intended to reduce consumer confusion, but it may also require new packaging, molds, or state-specific artwork for many companies.

Defining Recyclable Packaging Raises Difficult Questions

Much of the bill’s practical impact depends on future EPA and FTC rulemaking. For example:

• What counts as an “established recycling program” if a material is accepted curbside but routinely sorted out or rejected downstream (given the wide variety of recycling programs, as well as their effectiveness, it seems difficult to conclude as a national definition)?
• How much diligence must a producer conduct before it can conclude that a “responsible end market” exists, and what happens if that market later disappears (revising package artwork can take six months to a year, which seems like a long time to risk being out of compliance)?
• What does “where the item is sold” mean for national or online sales when calculating the bill’s recycling thresholds (and how do online sales play into this)?
• Who is the “producer” responsible for substantiating the claim when multiple parties are involved, as with private-label goods, imports, contract manufacturing, or co-packing?

These questions will likely require significant clarification.

The bill also may create tension with multiple state Extended Producer Responsibility (EPR) programs. A package could receive favorable treatment under an EPR program because it is considered recyclable, while still failing the federal standard needed to advertise that recyclability to consumers. Companies could therefore face the awkward choice between obtaining EPR benefits and making consumer-facing environmental claims.

The proposal requires evaluating individual package components, including caps, sleeves, liners, coatings, and adhesives. Even relatively minor design changes could affect whether a recyclability claim remains accurate. The bill also excludes waste-to-energy processes from the definition of “recycling,” which has significant implications for certain plastics and emerging recycling technologies.

Greenwashing Rules Could Reduce Consumer Guidance

The bill is designed to reduce greenwashing and create more consistent environmental marketing standards. Ironically, however, it may also make it harder for companies to communicate accurate disposal information. Companies would need to substantiate claims using collection, processing, commercial value, and end-market data that they do not control, and that can change over time. If businesses decide the legal risk is too great, consumers could end up receiving less guidance about how to dispose of products responsibly.

One final point bears watching. Much of the proposed legislation appears to borrow from the same policy approach reflected in California’s SB 343. But SB 343 itself is currently on uncertain footing. In California League of Food Producers v. Bonta, a federal district court recently issued a preliminary injunction blocking enforcement of the law after concluding that the challengers were likely to succeed on their claims that key provisions are unconstitutionally vague and that the restrictions likely violate the First Amendment. The case remains pending, and California may ultimately prevail.

California SB 343 Offers a Warning

That raises an obvious question. If Congress ultimately enacts a federal version of many of these same concepts, will it survive similar constitutional scrutiny? The proposed Act differs from SB 343 in important respects, so any challenge would need to be evaluated on its own terms. But the ongoing SB 343 litigation serves as a reminder that aggressive regulation of environmental marketing claims is far from settled. Even if this bill becomes law, it may not be the final word.

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