Health and Safety Code section 38562.3
(a)
(1)No later than December 31, 2026, the state board shall conduct a study and report to the Legislature, in accordance with Section 9795 of the Government Code, on all of the following related to offsets:(A)
Evaluation of the contribution of offset projects to progress toward California’s climate goals.(B)
Evaluation of the potential for changes to the definition of “direct environmental benefits in the state” for purposes of subparagraph (E) of paragraph (2) of subdivision (c) of Section 38562.(C)
Recommendations on how instate offset projects could be more attractive for development.(D)
Recommendations for alternative valuation methodologies or criteria for instate offset projects, particularly projects that support the goals of Section 38561.5 of this code or subdivision (b) of Section 71450 of the Public Resources Code.(2)
Pursuant to Section 10231.5 of the Government Code, this subparagraph shall become inoperative on December 31, 2030.(b)
No later than January 1, 2029, the state board shall update all existing compliance offset protocols to ensure that the compliance offset protocols reflect the best available science, including, but not limited to, consideration of compliance offset protocols in other carbon markets, crediting mechanisms established under Article 6.4 of the Paris Agreement adopted by the United Nations Climate Change Conference (COP21) in Paris, France, on December 12, 2015, also known as the Paris Agreement Crediting Mechanism, academic research, and industry best practices, that prioritize offset quality.(c)
No later than January 1, 2034, and every five years thereafter, the state board shall evaluate all compliance offset protocols and consider whether updates are necessary to ensure that the compliance offset protocols reflect the best available science, including consideration of items specified in subdivision (b).
Source:
Section 38562.3, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC§ionNum=38562.3. (updated Sep. 19, 2025; accessed Oct. 13, 2025).
