CARB defends Cap and Invest amendments as lawmakers press on utility credits, industrial allocation and timing

The California Air Resources Board on Wednesday presented proposed amendments to the state’s Cap and Invest program — the rebranded cap-and-trade system — and defended a schedule intended to finalize the regulation this spring while inviting additional public comment.

Chair Sanchez and Deputy Executive Officer Reginder Sahota told the joint legislative committee the amendments implement parts of the reauthorization bills (referred to in the hearing as AB 12 o 7 and SB 8 40) and aim to reduce emissions through 2045 while protecting affordability. “Formally known as cap and trade, the cap and invest program is a cost effective policy tool that makes polluters pay while reducing climate emissions over time,” a CARB official said during the presentation.

CARB staff summarized technical changes in the draft rule: retiring allowances when offsets are used for compliance, adding post-2030 allowances to the price containment reserve, updating reporting requirements to guard against market manipulation, and transferring free allowances from natural gas utilities toward electric utilities to support electrification and utility-bill affordability. CARB said the draft includes placeholder language recognizing carbon capture and removal (CCUS/CDR) as potential compliance pathways while separate SB 905…