On September 4, 2013, the California Air Resources Board (ARB) proposed more than 100 amendments to the regulations governing the state's greenhouse gas cap-and-trade program. Some of the most important amendments include:
Natural Gas Suppliers: California's cap-and-trade requirements will be expanded to cover natural gas and transportation fuels beginning in 2015. The proposed amendments establish specific compliance obligations for natural gas suppliers and specify a formula according to which they would receive an allocation of free emission allowances from the ARB but be required to auction off a percentage of those allowances to auction. The California Public Utilities Commission would determine how the proceeds of those auctions can be used (including the extent to which proceeds must be passed through to ratepayers/customers).
New Offset Protocol for Mine Methane Capture: California's cap-and-trade program allows covered entities to satisfy up to eight percent of their compliance obligations with carbon offset credits. The ARB previously approved offset protocols for forest, urban forestry, livestock and ozone-depleting substance projects. The proposed amendments would add a new protocol for mine methane capture.
United States Forest Offset Projects: The proposed regulations would effectively shift invalidation risks associated with United States forest offset projects from landowners to offset buyers.
Closure Obligations: The proposed regulations include several new requirements for covered entities planning to close one or more facilities in California.
Allowance Allocation and Leakage Protection: The amendments would make several changes in the formulas for allocating allowances to industrial emission sources, nearly all of which would increase the number of free allowances allocated to covered entities.
The ARB plans to consider all of the proposed amendments at its October 24, 2013, board meeting. Written comments may be submitted to the ARB before that time.