{"id":268301,"date":"2026-04-15T01:54:08","date_gmt":"2026-04-15T01:54:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/268301\/"},"modified":"2026-04-15T01:54:08","modified_gmt":"2026-04-15T01:54:08","slug":"amid-economic-uncertainty-california-regulators-wrestle-with-updating-states-cap-and-invest-program-san-diego-union-tribune","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/268301\/","title":{"rendered":"Amid economic uncertainty, California regulators wrestle with updating state\u2019s Cap-and-Invest program \u2013 San Diego Union-Tribune"},"content":{"rendered":"

The California Air Resources Board<\/a> on Tuesday announced it has made further tweaks to controversial updates to the state\u2019s Cap-and-Invest program, in an attempt to balance competing concerns at a time when global events threaten to drive the cost of living in the Golden State even higher.<\/p>\n

The proposed changes came as oil companies warned that a series of proposals made in January could lead to more refinery shutdowns across California \u2014 and even some Democrats in Sacramento raised similar concerns<\/a>.<\/p>\n

On the other hand, environmental groups said the Air Resources Board, known as CARB, needs to accelerate reductions in carbon emissions through the Cap-and-Invest program, which received a 20-year extension by lawmakers and Gov. Gavin Newsom last year.<\/p>\n

In a media briefing Tuesday, CARB officials announced the additional revisions.<\/p>\n

\u201cWe heard strong feedback about short-term economic uncertainty driven by federal disruptions, loss of federal incentives, global events and volatile market conditions,\u201d said Rajinder Sahota, CARB\u2019s deputy director for climate change and research<\/a>.<\/p>\n

The proposed changes:<\/p>\n

Would double to $4 billion an incentive fund for manufacturers to decarbonize their operations in California. Eligible businesses include refiners who make upgrades that reduce emissions at their facilities and trim future compliance costs.
\nProvide an estimated $800 million in compliance support for industry through 2030. This increase in assistance is aimed at ensuring that no additional costs are passed through at the gas pump.
\nBoost the California Climate Credit from $8 billion to $10 billion through 2030.
\nProvide some flexibility beyond 2030 by removing allowance allocations but retain emissions caps through 2045\u00a0 to send long-term market signals. This, CARB officials believe, will provide time to address concerns by stakeholders until \u201ceconomic circumstances stabilize.\u201d<\/p>\n

Chevron, which sent a letter to Newsom and legislative leaders last month<\/a> saying the January proposals would \u201ccripple the survivability of the state\u2019s remaining refineries,\u201d did not have an immediate response to latest round of revisions.<\/p>\n

In an email to The San Diego Union-Tribune, a spokesperson said Chevron was still poring over the details.<\/p>\n

But the Western States Petroleum Association<\/a>, an industry trade group, gave Tuesday\u2019s announcement a thumbs-down.<\/p>\n

\u201cIt is clear the state is not serious about keeping refineries in California,\u201d WSPA media relations director Jim Stanley said in an email. \u201cRegulations that last for just four years do little to provide the certainty refiners need to plan for the future and justify continued investments in this state.\u201d<\/p>\n

On the opposite end, two environmental groups panned the revisions for not going far enough.<\/p>\n

Katelyn Roedner Sutter, California senior director of the Environmental Dense Fund<\/a>, said, \u201cThis is not a credible proposal to update the program,\u201d adding that it \u201cfails to do the bare minimum to meet California pollution reduction targets for 2030.\u201d<\/p>\n

\u201cFrom our initial read of the proposal, it would allow for big polluting industries to continue to pollute contingent on a certain amount of action that they take,\u201d said Chloe Ames, policy adviser for Sacramento-based NextGen Policy<\/a>. \u201cHowever, we need to meet our 2030 and 2045 emission reduction goals, and we\u2019re significantly concerned that we will not be able to do that based on this proposal.\u201d<\/p>\n

Sahota of CARB defended the proposed changes.<\/p>\n

\u201cI think the package that we have now shows that California is continuing to move forward,\u201d she said. \u201cI think an 11% cap decline this decade is ambitious. I think a 7% cap decline from 2031 to 2045 is ambitious \u2026 This program continues our work to move forward, sending the near-term and long-term signals to actually reduce emissions in our largest sectors.\u201d<\/p>\n

As for complaints by oil companies that California Cap-and-Invest regulations are too onerous and may lead to refinery closures, Sahota said the industry is getting more support than it had in previous iterations of the program.<\/p>\n

\u201cWhat we\u2019ve done is make sure that we are protecting industry in general and we\u2019re kind of making sure that we\u2019re providing additional support during this time of uncertainty to the refining sector,\u201d Sahota said. \u201cBut we\u2019re not exempting them from the program because they are a large source of emissions and need to be in the program like everyone else.\u201d<\/p>\n

CARB will take comments on the latest revisions to the Cap-and-Invest program until April 29. Then, on May 28, CARB\u2019s board of governors will consider the changes during a public meeting on May 28. If adopted, the new rules will go into effect on Sept. 1.<\/p>\n

Updating the Cap-and-Invest program comes at a difficult time.<\/p>\n

California drivers already pay the highest gasoline prices in the country, and the cost of a gallon of regular has soared in the wake of the war in Iran.<\/p>\n

With oil tanker traffic in the Strait of Hormuz clogged since the commencement of hostilities on Feb. 28, the average price for regular-grade gasoline in San Diego has teetered close to $6 a gallon, according to AAA<\/a>.<\/p>\n

The statewide average on Tuesday stood at $5.88, which is $1.77 higher than the national average.<\/p>\n

In addition, the Valero refinery in the Northern California town of Benicia is scheduled to shut down its 145,000 barrels-per-day operations by the end of this month<\/a>.\u00a0That comes on the heels of the closure of the Phillips 66 twin refinery in the Los Angeles area<\/a> late last year.<\/p>\n

\"TheThe Valero Refinery in Benicia is scheduled to cease operations at the end of this month. (Chris Riley\/Times-Herald)<\/p>\n

The Valero and Phillips 66 facilities combine to account for about 18% of California\u2019s total refining capacity to process gasoline, diesel, aviation and other transportation fuels. Imports from foreign countries can help pick up the slack, but the closures may leave the state vulnerable to price spikes.<\/p>\n

Cap-and-Invest adds about 24 cents<\/a> to the price of a gallon of gas that Californians pay at the pump \u2014 and that does not include other state taxes and fees.<\/p>\n

The program used to be called Cap-and-Trade but the name changed to Cap-and-Invest last year<\/a> when Newsom and the Legislature joined forces to pass a law extending the program through 2045.<\/p>\n

In place for 13 years, the program requires power plants, natural gas providers and large industries that emit greenhouse gases to permits on the carbon pollution they produce.<\/p>\n

It\u2019s designed to send price signals to encourage investment in cleaner energy and more efficient technologies and help California meet its ambitious climate goals \u2014 such as deriving 100% of the state\u2019s electricity from carbon-free sources by 2045 and eliminating the sale of all new gasoline-powered passenger vehicles by 2035.<\/p>\n

CARB reports that Cap-and-Invest has raised $35 billion in climate investments through its Greenhouse Gas Reduction Fund.<\/p>\n

Cap-and-Invest also funds the California Climate Credit that customers of investor-owned utilities automatically receive on their billing statements during various months of the year.<\/p>\n

The dollar amount of the credits fluctuates, depending on how much revenue the program generates in a given year.<\/p>\n

For example, San Diego Gas & Electric customers receive one discount per year on their natural gas bills. This year\u2019s reduction comes to $32.58<\/a> and is currently being applied to this month\u2019s billing cycle.<\/p>\n

Customers also receive two reductions on their electricity bills. The California Public Utilities Commission is poised to apply a climate credit of $49.36 to SDG&E customers in August and another $49.36 discount in their September electric statements.<\/p>\n","protected":false},"excerpt":{"rendered":"The California Air Resources Board on Tuesday announced it has made further tweaks to controversial updates to the…\n","protected":false},"author":2,"featured_media":268302,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[387,7,9,8,6774,643,181,100,13,1696,1967],"class_list":{"0":"post-268301","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-california","8":"tag-business","9":"tag-california","10":"tag-california-headlines","11":"tag-california-news","12":"tag-energy","13":"tag-environment","14":"tag-latest-headlines","15":"tag-news","16":"tag-politics","17":"tag-top-stories-sdut","18":"tag-transportation"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/268301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=268301"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/268301\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/268302"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=268301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=268301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=268301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}