On July 27, 2026, the California Air Resources Board (CARB) released modifications to its proposed regulation implementing California’s corporate greenhouse gas (GHG) emissions reporting requirements under the Climate Corporate Data Accountability Act (SB 253). CARB is now reviewing comments on those proposed modifications following a 15-day public comment period. CARB announced that the modifications are intended to clarify regulatory requirements rather than to alter the scope of covered entities or their reporting obligations.
As we previously reported, CARB withdrew its initial regulation from review by the California Office of Administrative Law (OAL) in late June and signaled that it would issue an updated version for the abovementioned 15-day comment period.
CARB revised the proposed regulation to:
- Defer the first reporting deadline from August 10, 2026, to November 10, 2026.
- Confirm that Scope 3 emissions reporting is not required for the 2026 reporting year.
- Permit parent-level consolidation, clarifying that reports may be consolidated at the parent company level for subsidiaries that meet the regulation’s definitions of “subsidiary” and “reporting entity”.
- Exclude certain wholesale electricity transactions, more clearly carving out entities whose only activity in California consists of wholesale electricity transactions occurring in interstate commerce.
- Exclude intercompany transactions between business entities of the same combined reporting group for purposes of determining revenue.
- Align the fee determination deadline, moving the deadline for CARB to issue a written fee determination notice from September 10 to December 10, consistent with the new November 10 reporting deadline.
- Shift the initial fee year from fiscal year 2026 to calendar year 2026 for each reporting entity’s and covered entity’s annual fee obligation.
- Add detail on 2026 submissions and enforcement, describing the types of submissions CARB will accept for 2026 and how it intends to approach enforcement.
As a reminder, reporting obligations under SB 253 apply to companies doing business in California with more than $1 billion in annual revenue.
2026 Reporting Submittals
On September 1, 2026, CARB released additional guidance for entities submitting 2026 reports, which are due November 10, 2026.
For this year’s reporting only, CARB has provided companies with additional options for reporting that limit the type of information and data that they are required to report. Reporting entities that already possessed or were already collecting data on Scope 1 and Scope 2 emissions on or before December 5, 2024, must report Scope 1 and Scope 2 emissions from the reporting entity’s prior fiscal year in one of three formats:
- An existing annual report that includes Scope 1 and Scope 2 GHG emissions.
- An existing report of Scope 1 and Scope 2 GHG emissions data that were reported to other programs or voluntary initiatives; or
- Use of CARB’s template to report Scope 1 and Scope 2 GHG emissions data.
Companies that did not possess Scope 1 or Scope 2 emissions information and were not collecting information on or before December 5, 2024, must submit a statement on the reporting entity’s company letterhead indicating that the reporting entity is not submitting a report as a result.
Entities are invited, but not required, to provide additional details when available, including descriptions of methodologies, data sources, global warming potential values, emission factors, organizational boundaries, disaggregated emissions data by source category and gas type, and any assumptions used. Notably, CARB does not require use of a specific emissions factor dataset for Scope 2 emissions reporting, but it has suggested that entities use the 2023 version of emissions factors from the Emissions & Generation Resource Integrated Database (eGRID) or the eGRID 2024 dataset published by the Cornerstone Sustainability Data Initiative.
Scope 3 emissions reporting is not required in 2026 but will be required in subsequent years.
CARB has developed a voluntary 2026 report intake platform where companies may input their data or certify their lack of data for reporting, but its use is not mandatory.
SB 261 Updates
California’s Climate-Related Financial Risk Act (SB 261) reporting remains paused pending the Ninth Circuit litigation in Chamber of Commerce v. Sanchez, No. 2:25-cv-03104-DJC-JDP (E.D. Cal.), the case pending in the Eastern District of California, the court recently granted a partial motion to dismiss the plaintiff’s as-applied preemption claim as to SB 261, ruling that the National Securities Markets Improvement Act of 1996 does not preempt SB 261.
As a result, only First Amendment compelled speech challenges remain in both cases challenging SB 261.
The WilmerHale team will continue to monitor these topics and will provide further updates.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
