Back to News

ARB Adopts Amendments to the Cap-and-Trade Program

On Thursday, the Air Resources Board (ARB) approved amendments to the Cap-and-Trade program, specifically pertaining to the implementation of AB 398 (E. Garcia). The amendments aim to streamline the program and contain costs through 2030. Several of the major changes included were sought by business and industry groups in order to help keep the companies in California competitive against those out of state who do not have Cap-and-Trade obligations.

Among the key issues addressed, the amendments set assistance factors at 100 percent for all industrial sectors during third compliance period (2018-2020) and post-2020 period in order to minimize leakage risk. ARB also adopted a price ceiling (maximum allowance prices) and two price containment points (also referred to as new post-2020 Reserve tiers). More specifically, the amendments set a $65 price ceiling value in 2021 (approximately $61 in 2018 dollars), with the first new post-2020 Reserve tier price fixed at the halfway point of the Auction Reserve Price and price ceiling in all years and the second new post-2020 Reserve tier price fixed at the three-quarter point. An escalation factor of 5 percent to adjust for inflation was also included. Moving forward, the business community will continue to advocate for limiting Cap-and-Trade costs on California companies, especially as ARB begins to update the scoping plan.

For more information, please see