On October 12, the California Office of Administrative Law (OAL) approved California Air Resources Board’s (CARB) initial regulation covering fees and scoping. The regulation took effect the same day and CARB can now enforce the November 10, 2026 reporting deadline for SB-253.
The initial regulation incorporates the July modifications to (1) move the first-year reporting deadline for SB-253 from August 10 to November 10, 2026, (2) clarify applicability, (3) refine certain definitions, (4) allow use of a parent's consolidated report, and (5) codify first-year enforcement relief and Scope 3 reporting relief. CARB released an Addendum to the Final Statement of Reasons for Rulemaking with responses to comments received on the modifications.
On September 1, CARB also released materials to support first-year (2026) reporting for SB-253. These include (1) a guidance document covering the 2026 reporting process, acceptable report formats, Scope 2 emission-factor options and key definitions, and (2) a voluntary online intake platform for submitting fee contact information and emissions data. These resources provide practical clarifications but do not impose any new requirements.
Looking ahead to reporting under SB-253 for 2027 and beyond, CARB is developing a separate regulation that it previewed at its July workshop.
Stay up to date…Bookmark this page for breaking news delivered on a timely basis. Read our Hot Topic, which is updated periodically, for an executive summary of the climate laws. Refer to our newly issued in-depth guide on the California climate laws for further discussion and analysis. |
Here you’ll find key information to help you navigate the evolving landscape of the California climate laws. Use the jump links below to quickly access specific topics: a fast overview of the climate laws, details about the California legislative process under the APA, and key points covering the latest CARB developments.
Click on the links to understand what each of the three climate laws cover.
The Climate Corporate Data Accountability Act, as amended by SB-219, mandates the disclosure of GHG emissions. It applies to US businesses that meet specified revenue thresholds and do business in California. The effective date for reporting is 2026 for scopes 1 and 2 and 2027 for scope 3.
Read more
The Greenhouse Gases: Climate-related Financial Risk Act, as amended by SB-219, mandates the disclosure of climate-related financial risks and measures adopted to reduce and adapt to such risks. It applies to US businesses that meet specified revenue thresholds and do business in California. The effective date for reporting is on or before January 1, 2026.
Read more
The Voluntary Carbon Market Disclosures Act mandates disclosures about voluntary carbon offsets and emissions reduction claims. It applies to US and international companies that undertake specified activities in California or make certain claims. The effective date for reporting is January 1, 2024. Proposed amendment AB-2331 would change this date to July 1, 2025 but failed to pass before the end of California’s 2024 legislative session.
Read moreIn developing regulations, CARB is following California’s structured process for adopting regulations set forth in the Administrative Procedure Act (APA). The objective of the APA process is to ensure that regulations are developed with public input, legal clarity and accountability.
CARB has one year from the date of releasing proposed regulations for public comment (Notice of Proposed Action) through to final approval and filing.
For an overview of the APA process, click on the steps below.
- Authority. CARB must have legal authority (under SB-253 and SB-261) to adopt the regulations.
- Reference. The regulations must properly cite the relevant statutes or other legal provisions.
- Consistency. The regulations must not conflict with existing laws or other regulations adopted by CARB and should align with the broader legal and regulatory framework.
- Clarity. The regulations must be written so that they are easily understood by those who are directly affected. This includes using plain language, avoiding jargon and ensuring the regulations are internally consistent and unambiguous.
- Non-duplication. The regulations must not in effect duplicate any other state law or regulation.
- Necessity. The regulations must be essential to carry out the purpose of the law.
CARB’s fifth public workshop focused on proposed reporting requirements that would apply from 2027 onwards under SB-253. While many of the proposals build on those presented during the March workshop, staff provided additional detail on how regulation would align with the GHG Protocol Standards, specific recalculation and disclosures, as well as supplemental reporting by insurance companies. Here are the key takeaways.
CARB's proposed 2027 requirements to quantify and account for Scope 1, Scope 2 and Scope 3 emissions in adherence to the GHG Protocol's Corporate Standard, Scope 2 Guidance, and Scope 3 Standard. The version of the GHG Protocol Standards would be fixed by the regulation — future revisions would require further rulemaking. Scope 3 reporting phase-in is limited to five commonly reported categories.
CARB proposed specific measurement and disclosure requirements including (1) a 5% recalculation threshold for the base year and all intermittent periods, (2) measurement uncertainty (e.g. confidence intervals) or a qualitative assessment where quantitative estimation is not feasible, and (3) biogenic CO₂ would be reported separately with flexibility of measurement standard.
The initial regulation exempted insurance companies from 2026 reporting to avoid duplication with California Department of Insurance (CDI) disclosures. CDI reporting does not satisfy SB-253’s assurance requirements and does not require scope 3 reporting. From 2027, insurers may submit their CDI report to CARB, supplemented with any additional information needed to meet CARB's requirements.
CARB’s fourth public workshop focused on early-stage proposals for SB-253 reporting for 2027 onwards, on which CARB staff are seeking stakeholder feedback to inform the development of the next regulation. Here are the key takeaways.
CARB staff outlined options for defining organizational boundaries for 2027 reporting. The equity share, operational control and financial control approaches would all be allowed (with appropriate disclosure). There would also be flexibility in selecting calculation methodologies (spend-based, activity-based, supplier-specific and/or hybrid), depending on data availability and feasibility.
CARB staff outlined three potential options for phasing in scope 3 reporting starting in 2027: (1) all categories with flexibility to treat de minimis categories as non‑reportable, (2) sector‑based phase‑in for higher‑emitting industries, or (3) category‑based phase‑in starting with commonly reported scope 3 categories.
CARB plans to provide more guidance on the assurance standards to be followed in 2027 for scope 1 and 2 reporting – including AICPA attestation standards, standards issued by the International Auditing and Assurance Standards Board, and ISO standards. Staff are seeking feedback ahead of the 2030 transition to reasonable assurance.
The approval finalizes the framework first outlined in the proposed regulatory text released in December, providing clarity on the program's fees, applicability and reporting timelines. This approved regulatory text was submitted to OAL on May 20 for its review against the APA standards. This represents Step 5 (Submission to the OAL) in the rulemaking process, after which the regulation may be approved to become law.
CARB received multiple public comments requesting a delay in the reporting deadline for the first SB-253 reports. However, the Board decided not to change the August 10 deadline, citing its December 2024 Enforcement Notice, which allows good faith efforts based on data availability. CARB staff indicated that companies are encouraged to engage with CARB ahead of the deadline if they face challenges.
The proposed regulation would have exempted insurance companies from the scope of SB-253 to avoid potential duplicative reporting requirements because insurers already report GHG emissions to the California Department of Insurance. The Board amended its resolution to direct the CARB Executive Officer to assess that reporting for consistency with SB-253, and to recommend further regulation if necessary.
Consistent with the proposed regulation, key terms like ‘revenue’ and ‘doing business in California’ have been clarified. They are aligned with the California Revenue and Taxation Code. CARB believes this provides a more standardized and verifiable way for companies to determine if they are in the scope of the laws. The regulation establishes a flat annual fee for each company subject to each program regardless of the number of reports submitted.
With the holiday season approaching and based on the level of public interest, CARB released its proposed regulatory text, a staff report and notice of public hearing ahead of formal publication by the Office of Administrative Law.
CARB’s formal proposals on the definitions of ‘revenue’ and ‘doing business in California’ (under both SB-253 and SB-261) are consistent with its Nov 18 workshop, as is the Aug 10, 2026 proposed reporting deadline under SB-253. The method of calculating fees is described in more detail than previously outlined.
The proposals are accompanied by a CARB staff report that explains the underlying objectives and rationales supporting the proposed regulation.
CARB expects the Office of Administrative Law to issue formal notice for public comment on Dec 26, with a 45-day comment period. Public comments will be accepted from Dec 26, 2025 to Feb 9, 2026. On that basis, CARB has scheduled its public hearing for Feb 26, 2026.
CARB staff plan to present their proposed initial regulation to the Board in Q1 2026. This would contain details of the fee program and the 2026 reporting deadline for SB-253, with further regulation to follow. CARB’s third workshop focused on these three topics related to the regulation.
In defining the key terms ‘gross receipts’ and ‘doing business in California’, which underpin the determination of which companies are in scope, the staff plan to revert to using the California Revenue and Taxation Code as a basis. The scoping assessment would be based on the lesser of a company’s two previous complete fiscal year revenues.
CARB staff clarified that a foreign parent may submit the consolidated report which provides the required reporting on behalf of its in-scope US subsidiaries; however, fees would be assessed on each in-scope company. In addition, the SB-261 exemption for insurance companies would be extended to SB-253 in the draft regulation.
CARB staff proposed August 10, 2026 (extended from June 30) as the first reporting deadline for SB-253. The staff reiterated that companies should take advantage of the first-year enforcement relief announced in December 2024 (read our Hot Topic), including in cases where assurance has not been obtained.
CARB has continued releasing resources to support reporting under the California climate laws.
On September 24, CARB posted a preliminary list of companies that are in scope of the laws. The list uses California Secretary of State data based on active filings through March 2022 and CARB acknowledges that it may be missing companies. Companies need to complete their own analysis rather than rely on the list.
On October 10, CARB released a draft template for reporting scopes 1 and 2 GHG emissions under SB-253. Use of the template would be voluntary for 2026 reporting. The draft includes specific data fields for granular reporting on GHG emissions, including by source and gas. The deadline for comments is Oct 27.
Draft regulations were expected mid-Oct with finalization mid-Dec. On Oct 14, CARB announced a delay that would push initial rulemaking (including related to fees) to Q1 2026. The reason for the delay – which does not change the 2026 reporting deadlines – is the volume of public comments that CARB is working through.
The August 21 workshop was the second in a planned series – read more about the key proposals (subject to public comment and change) in our Hot Topic – followed by publication of a draft disclosure checklist.
CARB staff confirmed that the ‘prior fiscal year’ for SB-253 reporting would be fiscal year 2025, and they are seeking public feedback on the proposed deadline. A draft reporting template is set to be released by the end of September.
SB-261 reporting on January 1, 2026 would include streamlined disclosures based on the 2017 TCFD recommendations. On September 2, CARB released a draft disclosure checklist to be used as a starting point for companies complying with SB-261. Opportunities would be included, GHG emissions could be excluded from the first report, and resilience disclosures need not include a formal qualitative scenario-based assessment.
Non-profits would be excluded from the scope of SB-253 and SB-261. CARB staff are exploring public databases to help establish which companies are ‘doing business in California’.
The FAQs generally emphasize previous points made (download our Hot Topic).
The FAQs confirm that a company’s first climate risk report – due by January 1, 2026 – may cover either fiscal year 2024 or fiscal year 2025 depending on what is reasonable for the organization.
The FAQs note that CARB will post a public docket on December 1 for a company to register the URL of where its climate risk report is hosted on its website – to facilitate transparency and public review.
The FAQs indicate that the timeline for verification of GHG emissions – limited assurance on scopes 1 and 2 in the first instance – will be determined through additional public consultation and the rulemaking process.
The workshop was the first in a planned series – here are key takeaways.
At the workshop, it was repeatedly emphasized that the reporting dates cannot be changed – despite delays in developing the underlying regulations – because they are in the laws. This means that the first reporting under SB-261 (climate risks) is due by January 1, 2026, and the first reporting under SB-253 (GHG emissions) is due in 2026.
To facilitate reporting before regulations are final, CARB will not seek to impose penalties for ‘good faith efforts’ – relying on the relief in the laws and the CARB enforcement notice issued in December 2024. Read more in our Hot Topic (see link below). In addition, CARB staff indicated they will keep lines of communication open during 2025 to provide their latest thinking.
Notwithstanding the enforcement relief in the first year, CARB acknowledges that there are a significant number of interpretative questions that remain unresolved. Through a series of workshops to be held in 2025, it will work through the issues, focusing on scoping first. In the May workshop, CARB staff revealed tentative thinking that ‘doing business in California’ would be based on the California Revenue and Taxation Code. However, CARB remains open to discussion and encouraged constituents to express their views in writing.
Receive the latest financial reporting and accounting updates with our newsletters and more delivered to your inbox.
Access our accounting research website for additional resources for your financial reporting needs.
