On July 27, the California Air Resources Board (CARB) released proposed modifications to its initial SB 253/SB 261 implementing regulation and launched a 15-day public comment period (“Notice”), with comments due August 11. The proposed revisions follow CARB's withdrawal in June of the regulation it had approved in February (“February Regulation”) to make targeted revisions and clarifications. The current proposal addresses implementation issues applicable to the 2026 reporting year.
Among other changes, as summarized in the Notice, CARB proposes to:
- Revise the transition provisions applicable to the 2026 reporting year. CARB proposes to retain the existing framework for determining the applicable reporting year based on a reporting entity's fiscal year-end, while adding a one-time reporting option for the November 10, 2026 reporting deadline. Under the proposal, reporting entities may report Scope 1 and Scope 2 emissions from their prior fiscal year that can be determined from information already possessed or already being collected on or before December 5, 2024 (the date of CARB’s Enforcement Notice), or, where applicable, submit a statement that they were not collecting such information. The Society had previously recommended that CARB adopt a uniform reporting framework rather than the existing bifurcated approach, which the proposed revisions retain.
- Extend the 2026 Scope 1 and Scope 2 reporting deadline from August 10 to November 10, 2026, providing reporting entities with an additional three months to prepare their initial reports. This change appears responsive to concerns repeatedly raised by the Society and other stakeholders regarding the feasibility of the previously adopted reporting timeline.
- Confirm that Scope 3 emissions reporting will not be required for the 2026 reporting year and incorporate into the regulation CARB's previously announced first-year transition relief. These revisions appear responsive, in part, to the Society's recommendation that key elements of CARB's implementation approach be incorporated into the regulatory text rather than informal guidance.
- Clarify that reports and annual fees may be submitted on a consolidated parent-company basis where permitted by the regulation, and make various revisions to the fee provisions.
- Clarify several applicability and administrative provisions, including how "doing business in California" and revenue will be evaluated, the treatment of intercompany transactions and certain wholesale electricity transactions, recordkeeping requirements, and other technical and conforming changes. Several of these revisions respond to stakeholder requests for greater clarity regarding implementation of the regulation.
CARB's Notice emphasizes that comments submitted during the 15-day comment period must be limited to the proposed modifications. The Society will review the revised proposal with members of its CARB Working Group to determine whether additional comments are warranted.
If you are interested in participating in the Society’s CARB Working Group and have not already expressed an interest in doing so, please contact Randi Val Morrison.
This post first appeared in the weekly Society Alert!