CARB Workshop Gives Glimpse of Possible Future for SB 253 Reporting

At its July 21, 2026, public workshop, the California Air Resources Board (CARB) staff previewed draft regulatory concepts for SB 253 reporting starting in 2027 and confirmed near-term changes planned for reports due in 2026. This update summarizes key takeaways from the workshop and upcoming steps for CARB has announced to move these developments forward.

Requirements of SB 253

SB 253 establishes requirements for the disclosure of greenhouse gas (GHG) emissions by “reporting entities,” defined as (1) U.S.-based entities (2) with at least $1 billion in global annual revenue (3) that are doing business in California.

In February 2026, the CARB board voted to approve implementing regulations for SB 253 and its companion bill on climate-related risk disclosure, SB 261. These regulations defined “doing business in California” as:

1. actively engaging in any transaction for the purpose of financial or pecuniary gain or profit, and
2. either (a) being organized or commercially domiciled in California or (b) meeting at least a certain annually adjusted threshold for sales in California ($757,070 in 2025).

These regulations also established an initial SB 253 reporting deadline of August 10, 2026, for a company’s Scope 1 and Scope 2 emissions for the applicable preceding fiscal year (defined relative to a reporting entity’s fiscal year close).

Key Developments for Reporting in 2026

CARB staff (Staff) have withdrawn the final regulatory package submitted to the California Office of Administrative Law to allow for limited clarifications and will be resubmitted for a 15-day comment period.

The Staff have proposed a new 2026 Scope 1 and 2 reporting deadline of November 10, 2026, to give reporting entities additional time following adoption of the regulations, with the expectation that this November 10 deadline would also apply in future years.

Staff also noted they would share additional guidance materials to support 2026 Scope 1 and 2 reporting by September 1, 2026, in advance of the November deadline.

Key Developments for Reporting in 2027 and Beyond
The Staff also previewed multiple concepts that they plan to incorporate for reporting in 2027 onward, with a draft regulation expected later this year.

Assurance — According to the Staff’s presentation, limited assurance will be required starting with reports submitted in 2027 for Scope 1, Scope 2, and separately reported biogenic CO₂ emissions (discussed further below). Based on Staff responses to questions during the workshop, assurance is also expected to cover the entirety of a reporting entity’s submission, including quantitative and qualitative aspects.

The Staff floated allowing five different assurance standards:

1. AA1000 Assurance Standard (AA1000AS v3)
2. American Institute of Certified Public Accountants (AICPA AT-C Section 210)
3. International Standard on Assurance Engagements (ISAE) 3410 applied in conjunction with ISAE 3000 (Revised), for engagements commencing prior to December 15, 2026
4. International Standard on Sustainability Assurance 5000 for engagements commencing on or after December 15, 2026
5. International Organization for Standardization 14064-3:2019 (with additional accreditation requirements)

Assurance providers would then be required to issue a report identifying the relevant standard, the emissions covered thereunder, the assurance provider’s conclusion, the date the engagement was completed, and certain other logistical information about the assurance provider.

Biogenic Emissions — Biogenic CO₂ emissions from the combustion, consumption, or biodegradation of biomass (including biomethane) would be required to be reported separately from Scope 1, 2, and 3 emission totals. Other biogenic emissions — such as methane or N₂O — would be reported within the relevant scopes of an entity’s existing Scope 1, 2, and 3 emissions inventory.

However, entities have flexibility in how they quantify such emissions so long as relevant methodological information is disclosed.

Data Treatment — Reporting entities would be required to identify any missing data elements and any methods (e.g., estimation, proxies, etc.) used to plug these gaps, including rationale for the approach taken. The Staff noted that regulations for AB 32 — California’s existing mandatory GHG reporting requirements for certain energy companies and industrial facilities — include similar provisions and that it would be included in the SB 253 regulations for consistency.

The Staff also asked for feedback on how to implement the GHG Protocol’s recommendation that reporting entities prioritize primary data sources, suggesting that they may consider additional regulations to enforce this recommendation.

However, Staff also noted that reporting entities would be able to exclude information (including emissions sources or categories) where the omission “could not be reasonably expected to influence the decisions, assessments, or understanding of users of the disclosure regarding the reporting entity’s GHG emissions inventory, climate-related risks, opportunities, or impacts.”

This determination would need to be made using both quantitative and qualitative factors, considering the exclusion’s impact on relevance, completeness, consistency, transparency, or accuracy of the reported inventory. And reporting entities would still be required to identify and explain the exclusion, including estimating the emissions magnitude of each such exclusions (if quantifiable).

GHG Protocol Updates — SB 253 explicitly references the GHG Protocol as the basis for reporting under the law. However, the GHG Protocol has been undergoing a substantial overhaul, with revised standards and guidance expected for many instruments by late 2027. When asked about how these updates may impact obligations under SB 253, the Staff noted that requirements would not dynamically update to incorporate such future changes in the GHG Protocol without additional action by CARB.

Insurance Sector Coverage — The initial regulations had exempted insurance companies due to existing reporting requirements. However, the Staff subsequently concluded that existing reporting to the California Department of Insurance (CDI) may not fully satisfy the requirements of SB 253.

As such, the Staff have proposed to require in-scope insurance companies to submit a report consistent with the requirements of SB 253. This may be a single report also used for reporting to CDI, provided all of the requirements of the SB 253 regulations are met. Otherwise, insurance companies must supplement their CDI report with the remaining information required.

Methodological Disclosures (Including Measurement Uncertainty) — Reporting entities would be required to disclose the quantification methods and measurement approaches used for the calculation of all emissions in their reports. This would include consolidation approach, emissions factor sources and related attributes, global warming potential values and vintages, and quantification methods used (e.g., direct measurement or calculation-based) and any specific tools or models used.

Reporting entities would also be required to assess and report on the uncertainty associated with the quantification methodologies used. This would include quantitative confidence intervals, although entities may provide an explanation and conduct a qualitative assessment where such quantitative methods are infeasible or impracticable from a cost or burden perspective.

Methodological Updates/Recalculation of Reported Emissions — The Staff have also proposed that reporting entities must include disclosure of changes to GHG quantification or accounting methods and the reasons associated.

To the extent these methodological changes and other structural changes would result in a change of more than 5% of the total GHG emissions for a reporting entity’s first reporting year, reporting entities would be required to recalculate their emissions from all previous reporting years and provide the updated information in the next annual GHG emissions report, along with a description of the changes that triggered the recalculation.

Scope 3 Phase-In — SB 253 requires reporting entities to publicly disclose Scope 3 emissions as part of reports starting in 2027. However, in response to stakeholder feedback, the Staff have proposed to phase in these Scope 3 reporting obligations by initially focusing on the five most commonly reported categories of Scope 3 emissions: purchased goods and services (category 1), fuel and energy related activities (category 3), waste generated during operations (category 5), business travel (category 6), and employee commuting (category 7).

The Staff did not indicate when additional categories would become mandatory but noted that reporting entities could voluntarily report on such other categories if desired.

Next Steps

The Staff will submit the limited changes relevant to 2026 to a 15-day comment period prior to finalization. For the more extensive regulations relevant to reporting from 2027, the Staff will need to develop formal proposed regulations that are submitted to a 45-day comment period. However, the Staff also announced plans to hold six “listening sessions” over the course of August and early September for participants to share their experiences and concerns with the regulations.

Entities in scope for this law should continue to monitor these regulatory developments and consider their compliance strategies, including the sufficiency of current data and assurance efforts. The Staff have also indicated that they are actively looking for input on various points for these regulations. Entities with concerns around any concepts proposed should also consider ways to engage with CARB, whether directly or through relevant industry groups, to appropriately communicate these concerns and potential changes to the regulatory framework as presented.

SB 253 is also subject to ongoing litigation, with the Ninth Circuit currently considering the district court’s denial of a preliminary injunction of both SB 253 and SB 261 while the challenge to the law is pending. Although the Ninth Circuit granted an injunction against SB 261 while it considers the appeal, it did not issue a similar injunction for SB 253. Entities will likewise need to monitor the litigation for any developments that may affect the timing or applicability of these requirements.