On July 21, 2026, the California Air Resources Board (“CARB”) held a lengthy Public Workshop (“Workshop”) to discuss the evolving landscape of legislation commonly referred to as SB 253. The matters covered, and their implications, are summarized below.
2023 – Initial Climate Laws
In October 2023, California took a leadership role in the area of enterprise climate disclosures with the adoption of three new climate laws – SB 253 (Climate Corporate Data Accountability Act), SB 261 (Greenhouse Gases, Climate Related Financial Risk), and AB 1305 (Voluntary Carbon Market Disclosures).
2026 – Initial Regulation under SB 253
Under the authority of SB 253, CARB made history in February 2026 by issuing the first implementing regulation (“Initial Regulation”) mandating climate disclosures within the United States. At the Workshop, CARB explained that after the final technical package was submitted by CARB staff to the CARB board on May 20, 2026, it was withdrawn to allow for “limited clarifying changes” and delayed the SB 253 reporting deadline to November 10, 2026. CARB staff plans to resubmit the technical package, following a public comment period, by September 1, 2026. At that time, CARB will release a guidance document and instructional video, and an optional platform for gathering information about reporting companies.
Technically, this creates some unexpected regulatory uncertainty. However, we do not see this as a material issue. If CARB adheres to its “limited clarifying changes” statement, one can reasonably expect most of the fundamentals of the Initial Regulation to be preserved, including the following:
· Regarding applicability of SB 253, the “Doing Business in CA” test was specified to require at least $735,000 of revenue derived from CA
· SB 253 reporting for 2026 can be limited to Scope 1 and 2 greenhouse gases only
· Parent and subsidiary entities can consolidate for both reporting and fee payment
· Annual fees are expected to range between $2,000-7,000in the first year
· Disclosures under SB 253 will be due on or before November 10, 2026
· A reporting template for SB 253 has been provided but is not required
· CARB will continue to follow its December 2024Enforcement Notice, which states that for the 2026 reporting cycle CARB will not take enforcement action against companies working in good faith to comply with SB 253
In summary, it appears that the Initial Regulation, and 2026 reporting under it, will continue as anticipated.
2027 – Subsequent Regulation under SB 253
CARB staff spent most of the Workshop talking about the process and general outline of a new regulation to govern SB253 implementation expected to be released in 2027 covering reporting in 2027and afterwards (“Subsequent Regulation”). While the requirements of the Subsequent Regulation will be subject to a lengthy public comment period and legislative process, CARB staff touched on some likely requirements, including the following:
· Required reporting of Scope 1, Scope 2 and Scope3 emissions
· Biogenic emissions will need to be reported separately
· There will be numerous methodologies and guidelines imposed
· Reductions or removals must be reported separately
· Scope 2 reporting may continue to follow the 2015version of the Greenhouse Gas Protocol Scope 2 Standard, and not any new version released before the reporting deadline
· Scope 3 reporting in 2027 will only be required to cover 5 categories: (a) purchased goods and services, (b) fuel and energy, (c)waste from operations, (d) business travel and (e) employee commuting. CARB staff did not specify when reporting of the other 10 Scope 3 categories will be required.
· Reporting deadline will be November 10, 2027,and each subsequent November 10th
· Beginning in 2027, reporting entities will be required to obtain a limited Assurance Report covering their Scope 1 and Scope2 emissions reporting
· While exempted from the Initial Regulation, insurance companies are expected to be covered by and report under the Subsequent Regulation.
This important event further clarified SB 253 compliance for 2026, and outlined the possible requirements for 2027 and thereafter.
Please contact us if you’d like to discuss your compliance obligations, in the U.S. and beyond.
Chip Horton and Jarret Johnson,Esq., Tellus Markets Corp.
