The plan accelerates already ambitious climate goals for California and charts a course to carbon neutrality by 2045.
By Joshua Bledsoe, Jen Garlock, and Brian McCall
On December 15, 2022, the California Air Resources Board (CARB) adopted its Final 2022 Scoping Plan for Achieving Carbon Neutrality (Final Scoping Plan). Assembly Bill (AB) 32 requires CARB to develop and update every five years a scoping plan that describes the approach California will take to reduce greenhouse gas emissions (GHGs) to combat climate change. AB 32 originally set a target of reducing emissions to 1990 levels by 2020. After California met this goal, Senate Bill (SB) 32 strengthened the state’s GHG reduction target to at least 40% below 1990 levels by 2030. California committed to even greater targets this year with adoption of AB 1279, which directs the state to become carbon neutral no later than 2045.
Consistent with this statutory direction, the Final Scoping Plan, which was released on November 16, 2022, lays out how California can reduce anthropogenic GHG emissions by 85% below 1990 levels and achieve carbon neutrality by 2045. CARB’s recent approval means that the Final Scoping Plan will guide agency actions for the next five years.
CARB released the Draft 2022 Scoping Plan Update (Draft Scoping Plan) for public review and comment in May 2022. Latham & Watkins discussed the Draft Scoping Plan in a series of blog posts that explore: (1) CARB’s overall approach to decarbonizing California; (2) the Cap-and-Trade Program; (3) the Low Carbon Fuel Standard (LCFS) Program and liquid transportation fuels; and (4) California’s increasingly severe climate impacts. This post spotlights some key ways in which the Final Scoping Plan differs from the Draft Scoping Plan.
In updating the 2022 Scoping Plan, CARB considered written and oral public comments, recommendations from the Environmental Justice Advisory Committee, and recommendations from various stakeholders. In addition, new climate legislation passed in 2022 and directives from Governor Gavin Newsom informed the changes CARB made to the Scoping Plan between May and November 2022.
Among the more significant climate legislation recently passed, SB 1020 created new interim renewable energy and zero carbon energy targets, requiring renewable and zero-carbon resources to supply 90% of all retail electricity sales by 2035 and 95% of all retail electricity sales by 2040. The statute also accelerates the timeline required to procure 100% renewable energy and zero carbon energy to serve state agencies from the original target year of 2045 to 2035.
In the Final Scoping Plan, CARB acknowledges that meeting these new ambitious targets will require decarbonizing the electricity sector on a rapid — but technically feasible — timescale. Decarbonizing the electricity sector depends on both increasing energy efficiency and deploying renewable and zero carbon resources, including solar, wind, energy storage, geothermal, biomass, and hydroelectric power on a massive scale and at an unprecedented pace.
The Final Scoping Plan also now addresses SB 905 — which requires CARB to create the Carbon Capture, Removal, Utilization, and Storage Program — by summarizing how CARB intends to establish and administer the program. SB 905 requires CARB, on or before January 1, 2025, to adopt regulations creating a unified state permitting application for approval of carbon capture, utilization, and storage (CCUS) and carbon dioxide removal (CDR) projects. The Final Scoping Plan explains that CARB and other relevant agencies will take steps to evaluate the safety and efficacy of carbon dioxide removal, sequestration, and transfer via pipelines. CARB states that implementing CCUS and CDR will be necessary to meet California’s emission reduction goals and mitigate climate change.
Additionally, while the Draft Scoping Plan discussed hydrogen as a key tool in decarbonizing California, SB 1075 strengthens California’s commitment to supporting the development of hydrogen production and use. SB 1075 requires CARB to prepare an evaluation of the role of hydrogen in California and directs CARB to develop a roadmap for accelerating hydrogen production and use. In the Final Scoping Plan, CARB highlights the potential role of hydrogen when outlining strategies to decarbonize California’s industrial sector, and it specifically notes the need to create infrastructure for the growing hydrogen production industry. CARB also calls for an evaluation of how future hydrogen production projects can incorporate CCUS.
In addition to legislative mandates, the Final Scoping Plan also incorporates directives from Governor Newsom’s July 22, 2022, letter, which called for California to develop a more ambitious response to climate change. Governor Newsom directed CARB to include in the Scoping Plan strategies to produce 20 gigawatts (GW) of offshore wind energy by 2045, achieve the use of at least 20% clean fuels within the aviation sector, and reduce GHGs through CCUS and CDR by 20 million metric tons (MMT) in 2030 and 100 MMT in 2045. In response, CARB included in the Final Scoping Plan a greater focus on offshore wind in its energy sector goals, increased the previous goal of 10% clean fuel use within the aviation sector to 20%, and dramatically increased CDR targets from 1 to 2 MMT per year by 2030 to match Governor Newsom’s ambitious directive.
The governor also called for CARB to evaluate and consider an increase in the stringency of the LCFS Program. In the Final Scoping Plan, CARB notes that it is developing a proposal to increase the stringency of the LCFS program for 2030, and both the Draft and Final Scoping Plan describe strategies to initiate a public process focused on options to increase the stringency and scope of the LCFS. However, the Final Scoping Plan stresses that a stricter LCFS Program will only begin this decade, so the contributions it would make toward meeting the accelerated 2030 GHG reduction targets are not included in the reference scenarios. However, the LCFS Program very likely will be an important tool in meeting California’s long-term climate goals.
Overall, the Final Scoping Plan further strengthens the state’s commitments to take bold actions to address the climate crisis. CARB states that the Final Scoping Plan represents the most aggressive approach to reach carbon neutrality in the world. Under the Final Scoping Plan, by 2045, California aims to cut GHG emissions by 85% below 1990 levels, reduce smog-forming air pollution by 71%, reduce the demand for liquid petroleum by 94% compared to current usage, improve health and welfare, and create millions of new jobs.
Latham & Watkins will continue to monitor for further developments.
This post was prepared with the assistance of Shawna Strecker.
 Final Scoping Plan, p. 205.
 Final Scoping Plan, p. 199.
 Final Scoping Plan, p. 218.
 Final Scoping Plan, p. 45.
 Final Scoping Plan, p. 218.
 Final Scoping Plan, p. 211.
 Final Scoping Plan, p. 210.
 Final Scoping Plan, p. 222.
 Final Scoping Plan, p. 201, 204.
 Draft Scoping Plan, p. 58.
 Final Scoping Plan, p. 73.
 Draft Scoping Plan, p. 75.
 Final Scoping Plan, p. 94, 96.
 Final Scoping Plan, p. 117.
 Draft Scoping Plan, p. 154, Final Scoping Plan 192.
 Final Scoping Plan, p. 116.
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