Summary
Details
- California
AB 1305 applies to:
- Businesses marketing or selling voluntary carbon offsets within California.
- Entities that purchase or use offsets and make “net zero,” “carbon neutral,” or similar claims implying no net added GHGs.
- Entities that make “net zero/carbon neutral” (or similar) claims in California, even beyond offset purchasing, with a limitation for entities that don’t operate in CA or don’t make claims in CA.
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Introduction
AB 1305—the Voluntary Carbon Market Disclosures Act—adds a public-transparency layer to California’s approach to climate marketing and offset integrity. Rather than creating a new verification regime, it requires website disclosures that let regulators, customers, investors, and civil enforcers see (a) what offset projects are being sold or used, and (b) how “net zero,” “carbon neutral,” and similar claims are substantiated. The law is codified in the California Health & Safety Code (Part 10, commencing with §44475) and is enforceable through civil actions brought by the Attorney General and certain local prosecutors.
Reporting implications for companies
AB 1305 is triggered by what a company does (markets/sells voluntary carbon offsets, or purchases/uses offsets) and what it says (makes “net zero,” “carbon neutral,” or similar claims in California). If in scope, the required disclosures must be posted on the company’s website and updated at least annually.
Companies that market or sell offsets in California must publish core project information (e.g., protocol/method, project type/location, etc.) and how reversals or underperformance are addressed.
Companies that purchase or use offsets to support “net zero/carbon neutral” claims must disclose the offset/project or program details behind the claim, plus applicable verification signals.
Companies that make “net zero/carbon neutral” claims in California must publish documentation showing how the claim is substantiated, how progress is measured, and whether there is independent third-party verification.
Penalties for noncompliance
A covered entity can face civil penalties of up to $2,500 per day per violation, capped at $500,000, assessed in civil actions brought by the California Attorney General or certain local prosecutors.
Current status and future outlook
AB 1305 has been in effect since January 1, 2024, and most guidance treats disclosures as an immediate, ongoing website obligation (refreshed at least annually). A proposed “timing fix” (AB-2331) that would have shifted the initial disclosure date did not pass in the 2024 session, leaving companies to manage the original statutory timeline amid interpretive uncertainty. Over 2026, companies can expect more standardized disclosure formats, heavier reliance on third-party assurance signals, and tighter linkage between marketing claims and underlying offset documentation as regulators and prosecutors look for clear, comparable substantiation.
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