California, USA

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SB. 308 is now live in the California State Legislature. Take action to support its passage into law in 2024.


The California Carbon Dioxide Removal Market Development Act, or SB 308, is among the most ambitious and substantive carbon removal support policies proposed anywhere in the world. It creates a framework for developing the California’s CDR capacity so that the state can achieve net zero by counterbalancing the hardest-to-eliminate emissions that will still exist in 2045. SB 308 establishes rules to ensure that CDR solutions will provide scientifically valid carbon removal and that CDR providers will partner with neighboring communities to provide local benefits and avoid harms. It also creates early market demand for CDR solutions by mandating high emissions facilities in the state to purchase carbon removal credits.

Policy Elements

1. The bill directs the California Air Resource Board (CARB) to establish technology-neutral rules that will ensure that any negative emissions that can be counted toward meeting the net zero targets are high quality. SB 308 requires CDR processes to represent true, additional carbon removal (not just “avoided emissions”), to be durable,5 and to include strong measurement, verification, and reporting protocols to ensure the claimed negative emissions are real.

2. Valuing co-benefits to the state and neighboring communities and avoiding unintended harms. SB 308 directs CARB to consider the costs and benefits of proposed CDR pathways (beyond the value of the carbon removal itself) and gives it the ability to decline to certify processes with significant concerns. This aims to encourage CDR providers to work with neighboring communities to provide local benefits and mitigate any risks of negative impacts. The bill also prohibits counting CDR pathways that include any enhanced oil recovery.

3. To ensure that California retains a significant portion of the benefits of investing in CDR solutions, the bill requires that at least 50% of negative emissions each year must come from CDR projects that provide a direct climate mitigation benefit to the state.

4. A “polluter pays” approach to funding investment in CDR. While the state can provide limited funding for early pilot projects, the best way to stimulate investment in CDR solutions is by creating firm and growing demand for negative emissions. And it only makes sense for the entities responsible for GHG emissions in the first place to also be responsible for buying the negative emissions needed to undo the impacts of their emissions. SB 308 requires each emitter to buy negative emissions equal to a percentage of their GHG emissions, starting with very small percentages (1% in 2030) and growing over time. This schedule is intended to give CDR providers time (and strong market signals) to grow their capacity to meet demand. The obligation to purchase negative emissions will be separate from, and in addition to, an emitter’s Cap & Trade obligation. Cap & Trade uses an auction to allocate a limited number of rights to emit GHGs. This program would then also require each emitter to purchase CDR to undo the impacts of a portion of their emissions.

Politics Note

California’s SB 308, or the Carbon Dioxide Removal Market Development Act, can rightly be identified as one of the most consequential and ambitious pieces of CDR demand support legislation ever proposed, to date, anywhere in the world. It was introduced in January 2023 by State Senator Josh Becker. In April 2023, SB 308 was voted favorably out of the State Senate, and in the 2024 legislative session it will be reviewed and voted on in the State Assembly, where it is currently assigned to the Natural Resources Committee, chaired by Assemblymember Issac Bryan. Several local factors, or 'hooks' explain the impressive scope of SB 308, and why California is in a class of its own, among states, in terms of CDR policy ambition.

Hook 1: CDR support is already implied by existing law.

The first relates directly to existing and prior policy commitments already in place. California is one of just a handful of U.S. states that have enshrined a binding net zero target in law. This obligation, by itself, set in motion comprehensive emissions accounting by the state, which in turn quantified both the limitations of emissions reductions, and the need for carbon removal, to achieve net zero. The California Air Resources Board, the state regulatory body having significant authority over setting rules and programs to achieve the state’s target, formally affirmed in a 2022 Scoping Plan that CDR is needed to reach net zero, and quantified the amount required by 2045. The compliance targets set in SB 308 directly mirror the timeline and volumes published in the scoping plan. This direct acknowledgement by the state in a formal public document furnishes a powerful rationale (hook) for action on CDR, as well as an aggressive timeline for implementation that includes specific net-zero aligned removal volumes that must be met by specific future dates (window). As a result, advocates for the bill can convincingly argue that SB 308 is simply installing a legal mandate and programmatic mechanism that California will require in order to comply with an existing law already on the books. In states where net zero laws are not in place, and where emissions baselines and targets have not been produced, this hook would not be available to justify a proposal as ambitious as SB 308.

Hook 2: California’s environmental policy exceptionalism.

Additional hooks leverage pervasive elements of California’s unique political and economic identity and history within the U.S. context that have broad resonance within the state. These include California’s long history of originating ambitious, high-impact environmental policies that were then subsequently adopted by other states, as well as the federal government. Examples span first-of-kind regulations and laws related to recycling and waste management, conservation measures, vehicle emissions standards, renewable energy investment, electrical vehicle incentives, and low carbon fuel mandates. This multi-decade history of leadership and influence, and the relationship between such policy interventions and measurable quality of life impacts and economic benefits, are not only well understood among California policymakers and the general public, but generally celebrated as evidence of Golden State exceptionalism. Therefore when SB 308 advocates argue that the legislation is a bold measure that California can pull off, can bear economically, and which will create new economic benefits, they draw on a familiar narrative and a considerable body of historical evidence that cannot easily be dismissed in state, or made as persuasively in virtually any other state.

Hook 3: California's history of private sector tech leadership, including climate innovation.

Finally, California is home to one of the most diverse and dynamic CDR ecosystems, hosting what is likely the largest concentration of CDR startups, investors, buyers, and academic subject experts in the world. This reality supplies a hook that can be used to build a persuasive economic development and job creation argument in favor of the bill. And one that, again, has historical resonance and proof to back it up. California’s success at fostering world-leading innovation and technology industries that account for its economic success is objectively quantifiable, well-known, and widely celebrated. Therefore, making the claim that SB 308 will enable California to maintain its early lead, and come to dominate a future trillion dollar industry (and one that aligns closely with the state’s deep environmental values, to boot) frames the policy within a broader history, and pre-existing expectation that California can and should lead. And this argument can be articulated directly by local startups, investors, experts and other stakeholders who already call California home.

Political Headwinds

It is difficult to separate the strength of these hooks from the ambitious design and political success, to date, of SB 308 (the legislation has already passed in the state senate). However, its future as law is far from certain. Other local conditions (‘anti-hooks’) are less favorable. These include the opposition of the state’s powerful oil and gas industry, and a cross-section of influential environmental justice organizations, as well as fiscal projections of short-term budget deficits that complicate any proposal with a multi-year price tag, or yet another compliance requirement for in-state industries. Yet efforts to mitigate these negative factors are clearly present in both the SB 308’s policy and advocacy strategy. Advocates can use oil and gas opposition to shore up credibility with other environmental groups whose support is consequential, and the bill itself includes specific language that ensures comprehensive community impact review for all carbon removal projects supported through the law.

Replicability & Adaptation Potential

This support model at the center of SB 308, and the bill's directive to legislate carbon removal targets that align with California's existing net zero law represent a level of ambition that owes to specific background conditions that few other U.S. states have in place. These include the hooks outlined above. From a policy perspective, any state or national jurisdiction could implement a similar approach; however, politically, the realization of such a proposal as law realistically depends upon several other preconditions, most notably those summarized in the section above. It is possible, in the near term, that California's SB 308 has the greatest replication potential within the European Union among member states. The EU, as of 2022, has established a legally-binding net-zero commitment, and has created separate targets for emissions reductions and removals. It has begun to clarify the role and rules concerning carbon removal in 2024 in the form of the Carbon Removal Certification Framework (CRCF). Additionally, multiple member states are already in the process of debating, formulating or implementing national level carbon removal initiatives, including Finland, France, Germany, Denmark, Sweden and Luxembourg. SB 308 could emerge as an important model policy reference point for these and other nations that are in the process of developing their own approaches.