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California Enacts Sweeping Climate Measures

On September 16, 2022, California Governor Gavin Newsom signed a broad legislative package into law that aims to aggressively address climate change. The material aspects of each of these new measures is discussed below.

Assembly Bill ("AB") 1279

AB 1279 codifies California's statewide carbon neutrality goal. The measure requires statewide carbon neutrality "as soon as possible," but no later than 2045, and to achieve and maintain net negative greenhouse gas emissions ("GHG"). In addition, AB 1279 requires a reduction in California's anthropogenic GHG emissions to at least 85% below 1990 levels. The California Air Resource Board ("CARB") is tasked with ensuring that its scoping plan identifies and recommends measures to achieve these goals, such as by encouraging carbon dioxide removal technologies to complement emission reductions.

Senate Bill ("SB") 1020

SB 1020 codifies into law that renewable energy and zero-carbon resources supply 90% of all retail sales of electricity to California end-users by 2035, 95% by 2040, and 100% by 2045.

SB 905

SB 905 requires CARB to establish a "Carbon Capture, Removal, Utilization, and Storage Program" to evaluate the efficacy, safety, and viability of carbon capture, utilization, or storage ("CCUS") technologies and carbon dioxide removal ("CDR") technologies. The bill instructs CARB to establish a clear regulatory framework for these technologies and bans their use for enhanced oil recovery as well as prohibits the practice of injecting carbon dioxide obtained through these technologies into wells for enhanced oil recovery.

AB 1757

AB 1757 requires the California Natural Resources Agency ("NRA"), in collaboration with other agencies, to determine a range of targets for carbon sequestration and emissions reductions on natural and "working lands" (i.e., lands used for farming, grazing, or the production of forest products) for 2030, 2038, and 2045. The NRA must also establish an expert committee to advise state agencies on modeling and implementation of natural sequestration projects to ensure that the projects are rigorously vetted. Lastly, CARB is required to develop standard methods for state agencies to track GHG emissions and reductions and carbon sequestration by January 1, 2025.

Given the numerous new regulations that will need to be proposed to support this ambitious legislative package, companies should monitor notices of proposed rulemakings carefully and submit comments to preserve challenges going forward.

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