On March 23, 2026, the California Air Resources Board (CARB) held a public workshop to share its latest thinking on the implementation of SB 253, California’s corporate greenhouse gas reporting law. With the first-year Scope 1 and 2 reporting deadline now officially set for August 10, 2026, and Scope 3 obligations beginning in 2027, the workshop offered companies their most detailed look yet at what CARB is proposing for the next phase of SB 253 rulemaking.
The centerpiece of the workshop was CARB’s presentation of three distinct options for how Scope 3 reporting obligations could be structured.
- Option 1 — Broad Applicability: Under this approach, all reporting entities would be required to report on all 15 Scope 3 categories starting in 2027. CARB is proposing that companies would have flexibility to exclude categories they deem de minimis, provided they offer an appropriate explanation. CARB is seeking feedback on what thresholds or decision frameworks should govern the de minimis determination.
- Option 2 — Sectoral Phase-In: This option would prioritize Scope 3 reporting from the transportation and industrial sectors first, on the theory that these sectors account for the largest share of California’s statewide emissions and face the greatest transition risk. The initial focus would cover transportation, technology and energy, cement production, and other manufacturing activities, with additional sectors phased in over time.
- Option 3 — Category Phase-In: Instead of organizing by sector, this approach would phase in Scope 3 reporting by category, beginning with the five categories most commonly disclosed by companies today: business travel, purchased goods and services, fuel and energy-related activities, employee commuting, and waste generated during operations. Companies would be permitted to voluntarily report on the remaining 10 categories, with mandatory coverage expanding over time.
CARB also outlined its proposed approach for how companies would actually calculate and report their emissions.
CARB confirmed that it is developing standardized templates for Scope 1 and 2 reporting to be used in 2027 and beyond, based on the public feedback it received from the draft templates it published on October 10, 2025.
On the topic of how companies should define the organizational boundaries of their emissions reports, CARB proposed two approaches, either of which could be used:
- The Equity Share Approach: Companies account for emissions based on their percentage ownership in an operation
- The Control Approach: Companies account for 100% of their emissions from operations over which they exercise either financial or operational control
On accounting methods, CARB proposed giving companies flexibility to choose among spend-based, activity-based, supplier-specific, or hybrid methodologies.
- Spend-Based Accounting: Multiplies the financial value of purchased goods or services by an emissions factor representing average emissions per unit of currency spent
- Activity-Based Accounting: Uses physical measures of activity (such as kilograms of materials purchased or kilometers traveled) multiplied by relevant emission factors
- Supplier-Specific Accounting: Relies on primary emissions or activity data collected directly from suppliers at a product or process level
CARB identified several potential emission factor datasets that companies could use, including the EPA’s eGRID database, the IPCC Emissions Factor Database, the EPA’s Emission Factors Hub, and the U.S. Environmentally-Extended Input-Output model. CARB is seeking input on what criteria emission factors should meet and how reporters should document their use of particular factors, including proprietary models.
CARB confirmed that limited assurance for Scope 1 and 2 emissions will be required starting in 2027 and noted that broader assurance requirements contemplated by the statute for 2030 are not part of the current rulemaking. CARB proposed recognizing several assurance standards, including the AA1000 Assurance Standard, AICPA attestation standards, ISAE 3000/3410, the new ISSA 5000 standard (effective December 2026), and ISO 14064-3. CARB noted that a number of these standards are already accepted or in progress across jurisdictions globally, and that recognition of the AICPA standards would allow domestic CPA firms already serving as financial auditors to California reporting entities to also perform greenhouse gas assurance without requiring engagement of a separate provider.
The workshop also provided a preview of CARB’s Standardized Regulatory Impact Assessment (SRIA), offering the first official cost estimates for compliance with the regulation. CARB acknowledged that first-year costs are expected to be higher than ongoing costs due to the initial establishment of procedures and protocols and noted that existing estimates may be conservative given the “early adopters” effect and increasing expertise in the reporting sector. Averaged over a three-year implementation period, the estimated average annual cost per entity ranges from approximately $135,000 under the Category Phase-In option to approximately $152,000 under the Broad Applicability option. CARB noted that the maximum annual cost across all options is estimated to be less than 0.02% of the $1 billion minimum revenue threshold for covered entities.
Public comments on topics covered at the public workshop are due by April 13, 2026, and can be submitted through the public docket or via email at ClimateDisclosure@arb.ca.gov.