Voluntary carbon market disclosures.

Existing law imposes various limitations on emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. Existing law requires a business entity that is marketing or selling voluntary carbon offsets within the state to disclose on the business entity's internet website specified information about the applicable carbon offset project, including, among other things, the durability period for any project that the seller knows or should know that the durability of the project's greenhouse gas reductions or greenhouse gas removal enhancements is less than the atmospheric lifetime of carbon dioxide emissions. Existing law defines "durability" for purposes of these provisions. Existing law defines a "voluntary carbon offset" to mean any product sold or marketed in the state that makes specified claims. Existing law also requires an entity that makes claims regarding the achievement of net zero emissions, claims regarding carbon neutrality, or other claims implying the entity, related or affiliated entity, or a product does not add net carbon dioxide or greenhouse gases to the climate or has made significant reductions to its carbon dioxide or greenhouse gas emissions, as described, to disclose on the entity's internet website specified information pertaining to all greenhouse gas emissions associated with its claims. Existing law requires these disclosures to be updated no less than annually. Existing law makes a person who violates these provisions subject to a civil penalty of not more than $2,500 per day, as specified, for each violation, not to exceed a total amount of $500,000, as provided. This bill would revise the definition of a "voluntary carbon offset" to mean a tradable instrument, rather than a product. The bill would delete the definition of "durability" and the requirement to disclose the durability period, as described above, and would instead require the disclosure of the period over which carbon storage is required by law or contract to be monitored for reversals and to have any reversals reported, verified, and compensated, as provided. The bill would define "reversals" for purposes of the bill. The bill would expand, revise, and clarify the information that a business entity is required to disclose. The bill would authorize a business entity that markets and resells a voluntary carbon offset within the state that it has not generated to satisfy the disclosure requirements by publishing on the business entity's internet website sufficient information to direct the buyer to the disclosure made by the business entity who generated the voluntary carbon offset, by furnishing that information directly to the buyer by the time of settlement when marketing or reselling voluntary carbon offsets directly to "eligible contract participants," as defined, or by publishing on the internet website sufficient information to direct the buyer to each applicable project-specific disclosure published on a registry, as provided. The bill would also require disclosures made pursuant to these laws to be initially posted on July 1, 2025, and updated annually.