In the closing weeks of 2022, the California Air Resources Board (“CARB” or “Board”) approved its final 2022 Scoping Plan, which sets forth a detailed roadmap to accelerate the reduction of greenhouse gas (“GHG”) emissions in order for the state to achieve carbon neutrality by 2045, with an interim goal of achieving a 40% reduction in GHG emissions by 2030.

CARB is legally required to update the Scoping Plan every 5 years, but the 2022 Scoping Plan is its most comprehensive and ambitious plan to date. The 2022 Scoping Plan, which CARB describes as “unprecedented in scale and scope,” memorializes CARB’s planning efforts over the past 2 years, including meetings, workshops and presentations, and input from the Board, the Environmental Justice Committee, the Governor’s Office and members of the public.

Unlike previous scoping plans, the 2022 Scoping Plan approaches decarbonization from 2 perspectives – (i) managing a phasedown of existing energy sources and technology and (ii) developing and deploying alternative clean energy sources and technology throughout time. 

In particular, the 2022 Scoping Plan proposes the following goals to decrease reliance on existing energy sources and technology to accomplish carbon neutrality no later than 2045, including:

• Reduce GHG emissions by 85% below 1990 levels (with a 48% reduction by 2030);

• Achieve a 71% reduction in smog-forming air pollution; and

• Reduce total fossil fuel consumption by 86% of present-day levels (with a 94% reduction in liquid petroleum fuel consumption).

To accomplish these objectives, the 2022 Scoping Plan also sets forth the following technologically feasible and cost-effective initiatives that will impact nearly every industry sector in California, including deploying clean technologies, fuels and energy sources, and increased support for sustainable development.

Clean Technologies and Fuels:

To accelerate the reduction and replacement of fossil fuels, the Plan proposes to incentive private investment in new zero-carbon and low-carbon fuels and other technologically feasible and cost-effective clean technologies.

For example, the Scoping Plan proposes investing in infrastructure that supports reliable refueling for transportation (e.g., electricity and hydrogen refueling) where non-combustion alternatives are currently unavailable. In particular, the Scoping Plan anticipates providing capacity credits for hydrogen and electricity for heavy-duty fueling and also recommends leveraging low-carbon hydrogen programs, including the Bipartisan Infrastructure Law, for regional hydrogen hubs, hydrogen electrolysis, and hydrogen manufacturing and recycling.

The Plan also supports evaluating the role of hydrogen to promote cost-effective, low-carbon fuels for hard-to-electrify industrial applications. Under the Plan, incentives for low-carbon-intensity fuels would also be increased by proposing accelerated carbon intensity targets for the Low Carbon Fuel Standard (“LCFS”) program prior to 2030, and evaluating further declines after 2030. CARB further clarified that it would monitor raw materials used to produce low-carbon fuels or technologies to prevent any unintended consequences. 

To further ensure a smooth transition away from fossil fuels, the Plan proposes to quadruple its current wind and solar capacity. In particular, the Plan calls for significant development to access out-of-state and offshore wind, with a projected 20-gigawatt increase of offshore wind capacity, and about 10 gigawatts of additional solar capacity.

Relatedly, the Scoping Plan also endorses developing infrastructure for Carbon Capture and Sequestration (“CCS”) technologies that capture carbon from emitting facilities and directly from the atmosphere to be used or “sequestered” permanently. Specifically, the Plan proposes increased development of infrastructure for capture and sequestration on natural and working lands, and supports developing unified requirements to ensure safety and effective deployment of CCS technologies. Beyond the transportation industry, the Plan further proposes to incorporate CCS into other sectors and programs where other feasible options are not currently available.

Sustainable Development for Buildings and Transportation:

Additionally, the Scoping Plan adopts specific goals to encourage sustainable development and reduce emissions in construction and transportation industries.

This component of the Scoping Plan prioritizes incentive programs that focus on the holistic retrofitting of existing buildings, especially affordable and low-income households, to replace fossil fuel appliances with electric appliances, energy-efficient lighting, and building insulation and sealing. Along these same lines, the Scoping Plan proposes achieving three million all-electric and electric-ready homes by 2030 (seven million by 2035) with six million heat pumps installed statewide, and ending the expansion of fossil gas infrastructure and capacity for newly constructed buildings.

Similarly, the Plan proposes investment and innovation incentives in the transportation industry in order to develop and commercialize zero-emission equipment that meets or exceeds the performance of existing equipment, with the goal of achieving 100% zero-emissions sales of light-duty vehicles by 2030 and medium- and heavy-duty vehicles by 2040, and a 20% zero-emission target for the aviation transportation sector. The Scoping Plan also sets forth objectives to achieve the recommended a per-capita vehicle miles traveled (“VMT”) reduction of least 25% below 2019 levels by 2030 (30% by 2045).

In sum, by rapidly shifting away from all fossil fuels and then reaching carbon neutrality, the 2022 Scoping Plan seeks to provide significant business opportunities throughout the state while also delivering public health benefits to everyone in California, particularly more vulnerable populations. Notably, implementation of the Scoping Plan is projected to create a total of 4 million new jobs in California, including green jobs tied to electric vehicle and zero-emission truck manufacturing, and is projected to save Californians approximately $200 billion in healthcare costs related to pollution. 

As the Plan acknowledges, implementation of the Scoping Plan will likely require new regulatory programs and additional state-level rulemaking and legislation. Therefore, for the 2022 Scoping Plan to achieve its goals for carbon-neutrality as intended, it will be imperative that local governments, businesses, and other relevant agencies work collaboratively.