California climate change legislation sets legally binding limits on greenhouse gas pollution across the state’s economy, with statutory deadlines to cut emissions 40% below 1990 levels by 2030 and reach carbon neutrality by 2045. The framework runs through a handful of anchor statutes and is enforced by the California Air Resources Board (CARB), the California Public Utilities Commission (CPUC), and the California Energy Commission. It reaches electricity, fuels, vehicles, buildings, and, most recently, corporate financial reporting.
The Statewide Emissions Targets
Three laws set the numerical ceilings everything else works toward.
The California Global Warming Solutions Act of 2006 (AB 32) was the first legally binding cap. It required statewide emissions to return to 1990 levels by 2020, a benchmark the state reached four years early.1California Air Resources Board. AB 32 Global Warming Solutions Act of 2006
Senate Bill 32, signed in 2016, directs CARB to cut statewide emissions to at least 40% below the 1990 level by December 31, 2030.2California Legislative Information. Bill Text – SB-32 California Global Warming Solutions Act of 2006
AB 1279, enacted in 2022, then codified two goals for 2045: carbon neutrality (any remaining emissions fully offset by carbon removal) and an actual emissions cut of at least 85% below 1990 levels. The statute is explicit that the 2045 goal does not replace SB 32’s 2030 deadline. Both apply.3California Legislative Information. California Health and Safety Code 38562.2
Cap-and-Trade
Cap-and-trade is the enforcement backstop for those targets. It covers roughly 85% of California’s greenhouse gas output by placing a hard ceiling on pollution from any facility that emits 25,000 or more metric tons of carbon dioxide equivalent per year. Power plants, oil refineries, cement factories, and large fuel distributors all fall inside the program.
The state issues a fixed number of allowances, each covering one metric ton. Covered businesses must surrender enough allowances to match their annual emissions. The total pool of available allowances shrinks each year, so companies either cut pollution or pay more for a smaller supply. Allowances come from free allocation by CARB, quarterly joint auctions run with Quebec, or purchase of carbon offset credits.
Offset use is limited. For the 2026 through 2030 compliance period, offsets can cover no more than 6% of a company’s total obligation, and at least half of any offsets used must come from projects delivering direct environmental benefits inside California.4California Air Resources Board. Compliance Offset Program
Renewable Electricity Requirements
The Renewables Portfolio Standard sets the share of retail electricity that must come from eligible renewable sources. Public Utilities Code Section 399.11 requires 50% by the end of 2026 and 60% by the end of 2030. Eligible sources include solar, wind, geothermal, small hydroelectric, and certain biomass. The rules bind investor-owned utilities, electric service providers, and community choice aggregators alike.5California Legislative Information. California Code PUC 399.11 – California Renewables Portfolio Standard Program
Senate Bill 100, passed in 2018, sets the longer target: 100% of retail electricity sales from renewable and zero-carbon resources by 2045. The zero-carbon category is broader than the RPS eligibility list, so non-renewable but carbon-free sources like nuclear and large hydroelectric can count toward the 2045 goal even when they cannot count toward the RPS.6California Energy Commission. SB 100 Joint Agency Report
Low Carbon Fuel Standard
The Low Carbon Fuel Standard (LCFS) targets transportation fuels by carbon intensity rather than volume. Producers and importers must progressively lower the lifecycle carbon intensity of the fuels they sell in California, measured in grams of CO₂ equivalent per megajoule of energy. Fuels that beat the benchmark earn credits; fuels that fall short generate deficits that must be covered by buying credits.7California Air Resources Board. Low Carbon Fuel Standard
CARB tightened the benchmarks in recent updates. The 2026 gasoline standard drops from 84.52 to 75.16 grams of CO₂ equivalent per megajoule, and the diesel standard drops from 85.38 to 80.17. The program’s endpoint is a 90% cut in fuel carbon intensity from 2010 levels by 2045.
Zero-Emission Vehicle Rules
Advanced Clean Cars II, adopted by CARB in 2022, phases out the sale of new gas-only passenger vehicles. It requires 35% of new passenger car and light-truck sales to meet zero-emission standards beginning with the 2026 model year, ramping to 100% by the 2035 model year. Plug-in hybrids meeting specified electric-range requirements count toward the total.8California Air Resources Board. Advanced Clean Cars II
The Advanced Clean Trucks regulation covers medium- and heavy-duty vehicles. Manufacturers selling those trucks in California must make zero-emission models an increasing share of their sales. The requirement started in the 2024 model year at 5% for the largest trucks and 9% for medium-duty vehicles, and escalates through 2035.9California Air Resources Board. Advanced Clean Trucks Regulation Summary
Building Energy Standards
The 2025 update to the California Energy Code, effective January 1, 2026, does not ban natural gas or require all-electric construction. It sets energy-use budgets that designers must meet, and leaves the technology choice to the builder.10California Energy Commission. California’s Energy Code Update Guides the Construction of Cleaner, Healthier Buildings
The code still pushes hard toward electrification. It introduces electric-ready requirements for multifamily homes and commercial kitchens, lowering the cost of a later switch to electric water heating and cooking. New swimming pools and spas must use a heat pump or solar thermal system as their primary heat source, which ends gas-fired pool heaters as a standalone option in new construction.
Corporate Climate Disclosure
Two 2023 laws impose climate-reporting duties on large companies doing business in California, regardless of where they are headquartered. Both are subject to active litigation, and their deadlines have already moved.
SB 253: Emissions Reporting
The Climate Corporate Data Accountability Act applies to any business entity with total annual revenues over $1 billion that does business in California. Covered companies must publicly report their greenhouse gas emissions in three categories:11California Legislative Information. California Health and Safety Code 38532
- Scope 1, direct emissions from the company’s own operations, such as fuel burned in company-owned vehicles and facilities.
- Scope 2, indirect emissions from purchased electricity, heating, and cooling.
- Scope 3, all other indirect emissions across the supply chain, including suppliers, product use by customers, and employee commuting.
Scope 1 and 2 reporting begins in 2026; Scope 3 begins in 2027. Reported data must undergo independent assurance similar to a financial audit. CARB can impose administrative penalties of up to $500,000 per reporting year for nonfiling, late filing, or misstatements, though the statute directs CARB to weigh good-faith compliance, and penalties for Scope 3 misstatements are limited to nonfiling through 2030.
SB 261: Climate Financial Risk Disclosure
The Climate-Related Financial Risk Act reaches a broader group, applying to any business entity with annual revenues over $500 million that does business in California. Covered companies must publish a biennial report disclosing their climate-related financial risks and their responses, following the framework of the Task Force on Climate-related Financial Disclosures (TCFD) or an equivalent standard. The maximum penalty for noncompliance is $50,000 per reporting year.12California Legislative Information. Senate Bill No. 261 – Climate-Related Financial Risk Act
Current Status
Both laws face a challenge from the U.S. Chamber of Commerce and other industry groups. In November 2025, a Ninth Circuit panel granted an injunction blocking enforcement of SB 261 while the appeal continues. CARB has confirmed that the original January 1, 2026, SB 261 deadline is no longer in effect, though companies can submit reports voluntarily.
SB 253 was not directly affected by the injunction. CARB has set an initial deadline of August 10, 2026, for Scope 1 and 2 reporting. A December 2024 CARB enforcement notice carved out an exception: companies that were not already collecting emissions data at that time are not expected to file a report in 2026 and can submit a statement to that effect instead. CARB published draft implementing regulations in December 2025 and held a public hearing on them in February 2026.13California Air Resources Board. FAQs Regarding California Climate Disclosure Requirements Covered companies should track the litigation and the rulemaking, because both the deadlines and CARB’s enforcement posture could shift.
Environmental Justice Investment Floors
Revenue from cap-and-trade auctions flows into the Greenhouse Gas Reduction Fund. AB 1550 sets minimum shares of that fund that must reach specific communities:14California Legislative Information. AB 1550 Assembly Bill – Chaptered
- At least 25% to projects located in and benefiting people who live in disadvantaged communities, as identified through CalEnviroScreen.
- At least 5% to projects benefiting low-income households or located in low-income communities statewide.
- At least 5% to projects in low-income communities within half a mile of a designated disadvantaged community.
The categories do not overlap; money counted toward one floor cannot be counted toward another. The combined effect is that at least 35% of the fund flows to communities bearing the heaviest pollution burden. AB 1279 carries the same principle into CARB’s broader planning work, requiring its scoping plan updates to identify measures that benefit disadvantaged communities.3California Legislative Information. California Health and Safety Code 38562.2