In 2022, we built a tool that makes data about offset use within the California cap-and-trade program more accessible. Earlier this month, the California Air Resources Board (CARB) released its annual data update, which we have now added to the tool.
California’s cap-and-trade program requires regulated companies to periodically surrender compliance instruments — state-issued allowances or carbon offsets — equal to their emissions during a given compliance period. Using the tool, you can search for an offset project, a company, or an emitting facility and see who has used which offsets to satisfy their compliance obligations. With this update, the tool now offers data on compliance offset use over the past decade, from 2013 through 2023. Regulated entities in California have used more than 165 million offset credits for compliance purposes during this period.
This latest batch of data sums up the program’s fourth compliance period (2021-2023). In the previous two years, CARB’s data provided only a partial view into the extent of program-wide offset usage. This was because regulated companies are only required to meet 30% of their compliance obligation during the first two years of each compliance period. The remainder of their obligation for those years came due at the end of the full compliance period in 2023, and is reflected in the data released this year.
Notably, during the fourth compliance period, regulated entities could fulfill up to 4 percent of their total compliance obligation using offsets. Of 294 regulated entities, 110 hit this threshold. Overall, 3.1 percent of all compliance instruments surrendered during this compliance period were offsets. Although that number may sound small, it’s a large portion of the total emission reductions expected to be delivered by the cap-and-trade program, meaning the quality of credits is central to the efficacy of the program as a whole.
For more context on this tool and the data it surfaces, see our original blog post or check out our GitHub repository.