A California bill targeting sellers of questionable or false voluntary offsets credits in the state has died after its author pulled it from a committee hearing on Monday, leaving no way to advance the bill in this session.
SB 1036, introduced by state senator Monique Limón (D), would have made it unlawful for anyone to issue, market, certify or sell voluntary carbon offsets, or maintain a registry, if they have knowledge that the credit-generating projects are not actually reducing or removing greenhouse (GHG) emissions as claimed.
The bill spent just over a month in limbo ahead of a Monday hearing before the state Assembly Natural Resources Committee, after passing out of the Senate by a 31-15 vote in May. But Limón withdrew the bill just before the hearing, which represented its final chance to meet Wednesday's deadline for advancing out of the policy committee.
Limón cited difficulties gaining support from market participants as the reason for withdrawing the bill, which would add claims around carbon offsets purchased from the voluntary market to the state code on false or misleading advertising.
"Despite the deep deficiencies within voluntary carbon markets, it became clear that market participants are unwilling to accept legally enforceable standards to address the magnitude of junk offsets being marketed and sold in California," she said.
This is Limón's second attempt to pass a bill regulating claims in the voluntary carbon offset sphere, following SB 390, which passed largely unopposed in the legislature last year before governor Gavin Newsom (D) vetoed the bill.
The governor rejected the bill on concerns that it might affect well-meaning sellers and verifiers, hurting the in-state and wider voluntary carbon markets.
While the predecessor bill smoothly moved through the legislature last session before the governor's veto, the same was not true for SB 1036, which faced opposition from environmental market participants and industry groups such as Anew Climate, Western States Petroleum Alliance (WSPA), the Securities Industry and Financial Markets Association (SIFMA) during this session. Critics of the bill said the requirements would be unworkable, discourage project development and investments and increase the role of the courts in reviewing the intricacies of GHG accounting.
It is unclear if Limón will again revive this specific approach to regulate the voluntary carbon offset market in the next legislative session. But the senator has no plans to stop, her office said, and she intends to decide early next year her next steps to address the voluntary carbon market.
