Bill Text: CA AB2331 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Voluntary carbon market disclosures.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2024-08-29 - Assembly Rule 77 suspended. [AB2331 Detail]

Download: California-2023-AB2331-Amended.html

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Amended  IN  Assembly  March 21, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2331

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Introduced by Assembly Member Gabriel

February 12, 2024

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An act to amend Sections 44475 and 44475.3 of, and to add Section 44475.4 to, the Health and Safety Code, relating to carbon offsets.

LEGISLATIVE COUNSEL'S DIGEST

AB 2331, as amended, Gabriel. Voluntary carbon market disclosures.

Existing law imposes various limitations on emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. Existing law requires a business entity that is marketing or selling voluntary carbon offsets, as defined, within the state to disclose on the business entity’s internet website specified information about the applicable carbon offset project. Existing law also requires an entity that makes claims regarding the achievement of net zero emissions, claims regarding carbon neutrality, or other claims implying the entity, related or affiliated entity, or a product does not add net carbon dioxide or greenhouse gases to the climate or has made significant reductions to its carbon dioxide or greenhouse gas emissions, as described, to disclose on the entity’s internet website specified information pertaining to all greenhouse gas emissions associated with its claims. Existing law requires these disclosures to be updated no less than annually. Existing law makes a person who violates these provisions subject to a civil penalty of not more than $2,500 per day, as specified, for each violation, not to exceed a total amount of $500,000, as provided.

This bill would express the intent of the Legislature to enact future legislation that would clarify the law relating to voluntary carbon market disclosures.

This bill would exclude from the definition of “voluntary carbon offset” a renewable energy certificate issued through an accounting system of a governmental regulatory body, as specified, or a low-carbon fuel standard credit. The bill would also require disclosures made pursuant to these laws to be initially posted on January 1, 2025.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 44475 of the Health and Safety Code is amended to read:

44475.

 A business entity that is marketing or selling voluntary carbon offsets within the state shall disclose on the business entity’s internet website all of the following information:

(a) Details regarding the applicable carbon offset project, including all of the following information:

(1) The specific protocol used to estimate emissions reductions or removal benefits.

(2) The location of the offset project site.

(3) The project timeline.

(4) The date when the project started or will start.

(5) The dates and quantities when a specified quantity of emissions reductions or removals started or will start, or was modified or reversed.

(6) The type of project, including whether the offsets from the project are derived from a carbon removal, an avoided emission, or, in the case of a project with both carbon removals and avoided emissions, the breakdown of offsets from each.

(7) Whether the project meets any standards established by law or by a nonprofit entity.

(8) The durability period for any project that the seller knows or should know that the durability of the project’s greenhouse gas reductions or greenhouse gas removal enhancements is less than the atmospheric lifetime of carbon dioxide emissions.

(9) Whether there is independent expert or third-party validation or verification of the project attributes.

(10) Emissions reduced or carbon removed on an annual basis.

(b) Details regarding accountability measures if a project is not completed or does not meet the projected emissions reductions or removal benefits, including, but not limited to, details regarding what actions the entity, either directly or by contractual obligation, shall take under both of the following circumstances:

(1) If carbon storage projects are reversed.

(2) If future emissions reductions do not materialize.

(c) The pertinent data and calculation methods needed to independently reproduce and verify the number of emissions reduction or removal credits issued using the protocol.

(d) For the purposes of this part, the following definitions apply:

(1) “Durability” means the duration of time over which an offset project operator commits to maintain its greenhouse gas reductions and greenhouse gas removal enhancements, as applicable, exclusive of any aspirational outcomes that exceed or extend beyond the mandatory outcomes required of the offset project pursuant to its offset protocol.

(2) “Protocol” means a documented set of procedures and requirements to quantify ongoing greenhouse gas reductions or greenhouse gas removal enhancements achieved by an offset project and to calculate the project baseline, including specification of relevant data collection and monitoring procedures, emission factors, and methodologies used to conservatively account for uncertainty and activity-shifting and market-shifting leakage risks associated with an offset project.

(3) (A) “Voluntary carbon offset” means any product sold or marketed in the state that claims to be a “greenhouse gas emissions offset,” a “voluntary emissions reduction,” a “retail offset,” or any like term, that connotes that the product represents or corresponds to a reduction in the amount of greenhouse gases present in the atmosphere or that prevents the emission of greenhouse gases into the atmosphere that would have otherwise been emitted.

(B) (i) “Voluntary carbon offset” does not include products that represent or correspond to legal or regulatory mandates for either of the following:

(i)

(I) Reduction of the amount of greenhouse gases present in the atmosphere.

(ii)

(II) Prevention of the emissions of greenhouse gases into the atmosphere.

(ii) “Voluntary carbon offset” does not include a renewable energy certificate issued through an accounting system of a governmental regulatory body, such as the state board, or a virtual power purchase agreement, of which such a renewable energy certificate corresponds to one unit of electricity that was generated by an eligible renewable energy resource, or a low-carbon fuel standard credit.

SEC. 2.

 Section 44475.3 of the Health and Safety Code is amended to read:

44475.3.

 (a)A person who violates this part is subject to a civil penalty of not more than two thousand five hundred dollars ($2,500) per day, for each day that information is not available or is inaccurate on the person’s internet website, for each violation, not to exceed a total amount of five hundred thousand dollars ($500,000), which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General or by a district attorney, county counsel, or city attorney in a court of competent jurisdiction.

(b)Disclosures pursuant to this part shall be updated no less than annually.

SEC. 3.

 Section 44475.4 is added to the Health and Safety Code, to read:

44475.4.

 Disclosures made pursuant to this part shall be initially posted on January 1, 2025, and updated no less than annually.

SECTION 1.

It is the intent of the Legislature to enact future legislation that would clarify the provisions of Part 10 (commencing with Section 44475) of Division 26 of the Health and Safety Code, relating to voluntary carbon market disclosures.