The recently adopted Voluntary Carbon Market Disclosures Act (VCMDA) will go into effect on January 1, 2024. (See Assembly Bill (AB) 1305 (Chapter 365, of Statutes of 2023).)
According to the bill’s author, the “voluntary carbon offset industry is currently a wild west with all transparency or regulation being entirely voluntary. While offsets used for compliance market are regulated, voluntary carbon offset credits sold to consumers or businesses to voluntarily offset their emissions are completely unregulated. With a variety of recent reports all demonstrating consistent over crediting and lack of legitimate additionality in voluntary offset projects, there is a clear and pressing need for increased accountability and transparency. Requiring important details about the offsets being sold and purchased, such as the site location and how the total number of credits to be sold were calculated allows researchers and the public to better evaluate the validity of the credits being sold. By doing this, AB 1305 will combat greenwashing and give consumers a meaningful tool to decide which projects are worth investing in to reduce their carbon footprint.”
The VCMDA will apply to public and private companies operating in California that make claims or purchase or use VCOs, or sell or market VCOs in the state. Violations of the VCMDA could result in civil penalties of up to $2,500 per day per violation, not to exceed $500,000.