The California Air Resources Board (CARB) recently released its draft rules to govern carbon-capture, removal, and underground storage projects within the United States. This regulatory framework operationalizes Senate Bill 905 (SB 905), a 2022 mandate directing the board to establish rules for permitting, monitoring, and long-term liability to fulfill the state’s net-zero goals. The draft has sparked significant debate by proposing the expansion of the state’s carbon-capture program beyond conventional geologic storage. Carbon-removal companies and industry registries are advocating to include alternative methodologies such as biocharBiochar is a carbon-rich material created from biomass decomposition in low-oxygen conditions. It has important applications in environmental remediation, soil improvement, agriculture, carbon sequestration, energy storage, and sustainable materials, promoting efficiency and reducing waste in various contexts while addressing climate change challenges. More, bio-oil, marine carbon removal, and enhanced weathering into the formal rulebook.

The primary challenge addressed in this regulatory process is the conflict over program integrity, third-party oversight, and the inclusion of enhanced oil recovery (EOR). A coalition of environmental and public-interest groups, led by the Sierra Club and the Natural Resources Defense Council, submitted a joint letter criticizing the current draft. They argue that the proposed rules allow the oil and gas industry to self-regulate and self-report emission reductions without adequate mandatory third-party monitoring or robust financial-responsibility provisions. Furthermore, these organizations object to the inclusion of EOR projects, arguing that injecting captured carbon dioxide to extract residual crude oil undermines genuine climate mitigation efforts.

To resolve these regulatory ambiguities and meet long-term climate targets, CARB’s draft rules seek to establish a comprehensive framework that provides legal certainty for investors and project developers. By widening the definitional scope to incorporate non-geologic carbon dioxide removal pathways, the proposed rulebook attempts to create the regulatory primitives required to support the corporate carbon-removal market. This expansion aims to provide a sub-national alternative to fluctuating federal frameworks while aligning the technical requirements with the state’s broader scoping plan, which relies on approximately 100 million tonnes of carbon-capture and removal credits annually by 2045.

The outcomes of this rulemaking process will determine the scale, cost, and international credibility of California’s carbon-management market. If the current expanded definitions are finalized, the state will establish the broadest sub-national carbon-capture regime in the nation, providing a major regulatory pathway for alternative carbon-removal methodologies. However, the Sierra Club and its coalition partners have signaled their intent to initiate litigation if EOR provisions remain in the final text. Such legal challenges could delay the issuance of the first carbon-removal credits from the projected 2027 window into 2028, balancing the program’s timeline against unresolved environmental-justice concerns.