CARB Releases First-Year Guidance for California's SB 253 Climate Reporting Law

The California Air Resources Board has released guidance for companies preparing their first Scope 1 and Scope 2 greenhouse gas emissions reports required under Senate Bill 253, with initial reports due 10 November 2026. The guidance clarifies how CARB will exercise enforcement discretion during this first reporting cycle, while noting the document does not extend or impose requirements beyond what already exists in the underlying statute and regulation.

 

Why CARB's Enforcement Discretion Functions as a Genuinely Different First-Year Standard

 

The guidance confirms that CARB will allow reporting entities to submit Scope 1 and Scope 2 emissions for their prior fiscal year based on information they already had or were collecting when the December 2024 Enforcement Notice was issued, regardless of whether that data received limited assurance. That approach means the practical compliance bar for this first reporting cycle is considerably lower than what the underlying statute technically requires, since SB 253 mandates limited assurance beginning in 2026, yet CARB states it "will accept submissions whether or not assurance has been obtained for the 2026 cycle."

That distinction between statutory requirement and first-year enforcement practice reflects a deliberate transition approach: rather than requiring full compliance with every element of the law immediately, CARB is using its enforcement discretion to accept a range of existing data and reporting formats during this initial cycle, effectively treating 2026 as a phased implementation period before the second rulemaking process, covering 2027 and beyond, establishes more defined and presumably stricter requirements for GHG accounting methodologies, deadlines and assurance.

 

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Why the Non-Reporting Statement Mechanism Reveals How CARB Is Bridging a Data Readiness Gap

 

For entities that were not collecting Scope 1 and Scope 2 emissions data as of 5 December 2024, and were not planning to do so, CARB requests they submit a formal statement of non-reporting on company letterhead rather than requiring them to produce emissions data they may not currently have the systems or history to generate accurately. The guidance notes several companies have already submitted such letters, and CARB explicitly recommends this approach as an acceptable path to compliance for entities in that position.

That mechanism addresses a specific practical tension inherent in a broad corporate climate disclosure law taking effect: SB 253's revenue-based applicability criteria capture a wide range of companies doing business in California, but not every covered entity necessarily had emissions tracking infrastructure already in place before the law's requirements were finalised. Rather than requiring those companies to retroactively reconstruct historical emissions data they never collected, potentially producing unreliable or fabricated figures under compliance pressure, CARB's non-reporting statement option gives them a transparent, documented way to acknowledge their current position without submitting inaccurate or unsubstantiated emissions figures.

 

Why the eGRID Flexibility Addresses a Problem Outside Anyone's Control

 

The guidance specifically notes that the US EPA has not released its eGRID 2024 dataset, the emissions factor database commonly used for Scope 2 electricity emissions calculations, on its usual publication timeline. In response, CARB states reporting entities may use the most recent official EPA eGRID 2023 release, or alternatively the eGRID 2024 dataset published by the Cornerstone Sustainability Data Initiative, which was generated from the EPA's own publicly available source code rather than being an official EPA publication itself.

That accommodation reflects a genuine data availability problem entirely outside the control of either CARB or the reporting companies themselves: Scope 2 emissions calculations depend on standardised electricity grid emissions factors that vary by region, and without an updated official government dataset, companies calculating 2026 Scope 2 emissions would otherwise face a choice between using outdated 2023 data or having no clear guidance on which alternative source CARB would consider acceptable. By explicitly endorsing both the older official dataset and a specific third-party alternative derived from EPA's own methodology, CARB provides companies a workable path forward despite the underlying federal data gap.

 

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Why the Optional Intake Platform Signals CARB's Approach to Streamlining First-Year Compliance

 

CARB has developed a voluntary online intake platform specifically to help streamline both fee implementation and first-year reporting, allowing companies to submit contact information, optional Scope 1 and 2 emissions data, or non-reporting statements through a single centralised tool ahead of the November deadline. The guidance is explicit that use of this platform is not mandatory, and that entities may alternatively submit required information via email to CARB's climate disclosure inbox.

That optional rather than mandatory structure reflects a broader pattern throughout this guidance: CARB appears to be prioritising flexibility and multiple acceptable compliance pathways during this initial reporting cycle, whether through existing annual reports already containing Scope 1 and 2 data, data already reported to other voluntary programmes, CARB's own draft reporting template, or formal non-reporting statements, rather than mandating a single standardised format or submission channel for this first year.

 

What This Guidance Does Not Cover

 

The guidance explicitly states it applies only to the 2026 reporting cycle specifically, with CARB currently undertaking a separate, second rulemaking process to establish reporting requirements for 2027 and subsequent years, including firmer GHG accounting methodologies, deadlines, assurance requirements and reporting formats. That distinction matters for companies assessing their own compliance planning: the considerable flexibility and enforcement discretion described in this guidance is explicitly temporary and specific to this first reporting cycle, meaning companies relying on informal or incomplete data this year should not assume equivalent flexibility will necessarily continue once the 2027-and-beyond rulemaking process concludes and takes effect.

 

Source: The California Air Resources Board