CARB to Use Enforcement Discretion to Reduce Burden of Initial Emissions Reporting Under SB 253

Last week, the California Air Resources Board (CARB) published an Enforcement Notice providing reporting companies with additional flexibility in preparing their initial greenhouse gas (GHG) emissions reports under the Climate Corporate Data Accountability Act (SB 253), which will be due sometime in 2026. 

The Act, which we summarized in our prior alert, imposes GHG emissions reporting obligations on public and private companies with annual revenues over $1 billion that operate in California. Beginning in 2026, the Act will require reporting entities to annually report their scope 1 and 2 GHG emissions for the prior fiscal year. Additional reporting requirements for scope 3 GHG emissions will begin in 2027. 

The exact deadline in 2026 for reporting entities to submit their initial scope 1 and 2 emissions reports will be established in CARB’s forthcoming SB 253 implementing regulations. Under the original language of the Act, CARB was required to publish its implementing regulations by January 1, 2025, but earlier this year the Act was amended to extend this deadline to July 1, 2025. 

Recognizing that the delayed publication of its implementing regulations will give companies less lead time to prepare their initial emissions reports, CARB recently issued an Enforcement Notice stating that the agency will exercise its enforcement discretion “such that, for the first report due in 2026, reporting entities may submit scope 1 and scope 2 emissions from ‘the reporting entity’s prior fiscal year’ that can be determined from information the reporting entity already possesses or is already collecting” as of December 5, 2024. The Enforcement Notice goes on to state that “for the first reporting cycle, CARB will not take enforcement action for incomplete reporting against entities, as long as the companies make a good faith effort to retain all data relevant to emissions reporting for the entity’s prior fiscal year.”

CARB expects to provide additional details on emissions reporting requirements for future years in its SB 253 implementing regulations. In the meantime, companies subject to the Act should take care to preserve any previously collected scope 1 and 2 emissions data and should continue any current data collection efforts to ensure that they are well-positioned to prepare their initial scope 1 and 2 emissions reports.