California Air Resources Board

Adds pipelines transporting carbon dioxide to the State requirements for pipelines carrying hazardous liquids but only allows those pipelines to operate after the State Fire Marshal adopts regulations governing those pipelines. The bill requires the State Fire Marshal to adopt regulations governing intrastate pipelines transporting carbon dioxide, that are equivalent to draft federal regulations, as specified. The bill authorizes the State Fire Marshal to amend the regulations to provide other safety standards, as specified, and requires pipelines transporting carbon dioxide to or from carbon dioxide capture, removal, or sequestration projects to comply with these regulations. Specifies that the regulations shall be considered emergency regulations. The bill requires a pipeline operator to conduct an analysis, as specified, of the potential for harm to sensitive receptors located within the emergency planning zone, and requires the operator to submit an emergency planning zone inventory and map, as specified. The bill requires a lead agency to prepare and certify an Environmental Impact Report for the construction of a pipeline transporting carbon dioxide and provide notice to sensitive reporters, as specified. Finally, the bill prohibits approval of carbon dioxide pipelines that were previously used to transport other liquids or gases.

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Would have required CARB, by January 31, 2026, to reconsider and revise the Low Carbon Fuel Standard to reduce the program's financial burden on drivers in the State. Would have required CARB, in doing so, to do all of the following: provide a complete analysis of the passed-through costs of carbon credits to drivers, including a comparison to prior methodologies; prioritize changes that directly benefit individual drivers, including revising carbon credit structures to multiply credit generation for certain pathways aligned with State priorities; evaluate the extent to which changes can be made to prioritize in-State projects and benefits; and analyze impacts that adjusting the credit price cap for the Credit Clearance Market would have on program cost and investment capabilities. Held on suspense in the Senate Appropriations Committee.

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Would have specified that only carbon dioxide removal (CDR) that meets specified requirements of the bill can be used for meeting or tracking progress for the net zero greenhouse gas (GHG) cement sector goal (SB 596), the overall net zero GHG goal (AB 1279), and the State operations net zero GHG goal (SB 1203), for purposes of counterbalancing the State's or an entity's remaining greenhouse gas emissions. The bill would have set these requirements as: using a form of carbon sequestration with substantially equivalent duration to the longevity of the form of storage from which the GHG was released and being qualified CDR, as defined. The bill would have defined qualified CDR as not being used for enhanced oil recovery, meeting certain standards of SB 905, and if using biomass, using only specified waste-based biomass. The bill would have specified it does not restrict what can be used as an offset credit in the Cap-and-Trade program and does not restrict the types of voluntary carbon offsets or other tradeable instruments that may be used to meet or report on the progress of voluntary pledges to achieve greenhouse gas reductions. Held on suspense in the Senate Appropriations Committee.

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Would have required the California Coastal Commission (Commission) to authorize blue carbon demonstration projects and develop, in consultation with CARB and other parties, a blue carbon demonstration project program. The bill would have allowed the Commission to require an applicant with a nonresidential project that impacts coastal wetland, subtidal, intertidal, or marine habitats or ecosystems to build or contribute to a blue carbon demonstration project as a mitigation measure.

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Governor’s Veto Message

To the Members of the California State Assembly:

I am returning Assembly Bill 399 without my signature.

This bill would authorize the  California Coastal Commission to facilitate the development of blue carbon demonstration projects in certain coastal areas and wetlands.

California is a global leader in advancing nature-based carbon capture and sequestration solutions, having built and expanded our portfolio of actions over decades. In fact, between 2020 and 2024 alone, the state invested approximately $9.6 billion in nature-based solutions. Additionally, my Administration developed and released achievable carbon removal targets for natural and working lands as a result of Assembly Bill 1757 (C. Garcia) in 2022. That same year, the Natural and Working Land Climate Smart Strategy cataloged over 350 efforts across state agencies to deliver meaningful nature-based solutions for climate action.

While I share the author's desire to accelerate novel nature-based climate solutions, this bill creates a new, unfunded program. In partnership with the Legislature this year, my Administration has enacted a balanced budget that recognizes the challenging fiscal landscape our state faces while maintaining our commitment to working families and our most vulnerable communities. With significant fiscal pressures and the federal government's hostile economic policies, it is vital that we remain disciplined when considering bills with significant fiscal implications that are not included in the budget, such as this measure.

For these reasons, I cannot sign this bill.

Sincerely,

Gavin Newsom

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Terminates the 25% continuous Greenhouse Gas Reduction Fund appropriation to High-Speed Rail and instead, beginning in the 2026–27 fiscal year, annually transfers 25% to the General Fund to be used, upon appropriation, to augment funding provided to local governments to improve infrastructure. Was not heard in the Assembly Transportation Committee.

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Suspends the Greenhouse Gas Reduction Fund appropriation to the High-Speed Rail Authority for the 2026–27 and 2027–28 fiscal years and instead requires those moneys to be transferred to the General Fund to be available, upon appropriation by the Legislature, to augment funding for water infrastructure and wildfire prevention. Was not heard in the Assembly Transportation Committee.

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Has a variety of provisions regarding California’s gasoline specification, including allowing the Governor to suspend specification requirements in certain conditions and requiring the California Energy Commission (CEC)to assess alternative specifications, evaluate the possibility of a western region gasoline specification, and recommend strategies to support the state’s fuel transition. The bill also has provisions to improve oil and gas facility safety, including requiring more public input for the Department of Fish and Wildlife’s Office of Spill Prevention and Response to solicit and incorporate public input on worst case oil spill volumes and financial responsibility requirements and requiring testing for idle oil pipelines and use of best technology for onshore transport of offshore oil. Additionally, the bill allows increased oil extraction in Kern County but prohibits new production in health protection zones.

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Voids specified amendments to the Low Carbon Fuel Standard that were adopted in November 2024. The bill includes an urgency, citing incorrect potential price increases as the facts constituting the necessity. Failed passage in the Senate Environmental Quality Committee and was granted reconsideration.

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Would have required CARB to include greenhouse gas emissions from wildlands and forest fires in the AB 32 Scoping Plan. Died at the desk.

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Requires the California Environmental Protection Agency (CalEPA) to conduct a study on the costs of climate change to the State and requires responsible parties with greenhouse gas emissions greater than 1 billion metric tons globally from 1990 to 2024 to pay a cost recovery demand proportionate to their share of emissions compared to total anthropogenic greenhouse gas emissions. Authorizes responsible parties to pay the cost recovery demand in 20 annual installments, with the first installment equaling 10%of the cost recovery demand. Creates the Polluters Pay Climate Fund and continuously appropriates the funding generated by the cost recovery demands to the Fund for projects that avoid, mitigate, repair, or adapt to negative climate change impacts, with a minimum of 40%of funded projects benefitting environmental justice populations. Was not heard in the Assembly Natural Resources Committee at the request of the author.

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