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The California Air Resources Board (ARB) is proposing major changes to its Cap-and-Trade Regulations, as well as the Mandatory Reporting Regulation (MRR) under the AB 32 greenhouse gas program.  Most significantly, the proposed amendments will extend Cap-and-Trade beyond 2020 while clarifying the scope of the program.  Other proposed changes include broadening the through linkages with other jurisdictions, clarifying compliance obligations for certain sectors, continuing the allocation of allowances to the utilities on behalf of rate-payers, and ensuring California compliance with the federal Clean Power Plan.  In addition, ARB is proposing significant changes to the allocation of allowances, industrial assistance factors and benchmarks, which could dramatically reduce the amount of free carbon credits in future years beyond 2020.  The following affected industries are included in these changes:

  • Roasted Nuts and Peanut Butter Manufacturing (NAICS code 311911)
  • Paper (except Newsprint) Mills (NAICS code 322121)
  • Dairy Product Manufacturing (NAICS code 31151; only fluid milk products),
  • Secondary Smelting, Refining, and Alloying of Nonferrous Metal (NAICS code 331492)
  • Nonferrous Forging (NAICS code 332112)
  • Petroleum refineries, Sulfuric Acid Regeneration (NAICS code 325188)
  • Potash, Soda, and Borate Mineral Mining (NAICS code 212391)
  • All Other Nonmetallic Mineral Mining (NAICS code 212399)

A copy of the proposed regulatory changes can be found here.  If you have any questions or inquiries on the recent MRR and Cap-and-Trade proposed amendments, please contact Dr. Charles Lee.