At its July 21 public workshop, California Air Resources Board staff gave the clearest and most detailed preview yet of how the state is thinking about implementation of SB 253 for the 2027 reporting year and beyond. While the proposal is still under development, the session suggested that CARB is moving toward a climate disclosure framework built closely around the Greenhouse Gas Protocol, with California-specific requirements layered on top to support mandatory reporting, assurance, and public transparency.

The workshop was mainly about the future framework, not the 2026 cycle

One of the first points CARB emphasized was that this workshop was focused on the next phase of the program, not primarily on first-year 2026 reporting. Staff said the 2026 reporting process remains separate and pointed to a November 10, 2026 reporting deadline for that initial cycle. By contrast, this workshop was framed as a preview of the reporting and assurance concepts CARB intends to include in the rulemaking for 2027 and beyond. Staff said it expects to publish a broader proposal later this fall, including draft regulatory text, a staff report, and economic analysis, followed by a 45-day public comment period before Board consideration at a public meeting.

CARB also said it plans to host six listening sessions beginning August 5, 2026, to gather additional implementation feedback from reporting entities, service providers, and potential users of the data.

The clearest headline was a phased approach to scope 3

The most significant substantive update from the workshop was CARB’s proposed approach to scope 3 emissions reporting. Rather than requiring all 15 scope 3 categories immediately, staff proposed phasing in five categories starting in 2027: purchased goods and services, fuel- and energy-related activities, waste generated in operations, business travel, and employee commuting. The other ten scope 3 categories would initially be voluntary.

CARB presented this as a response to stakeholder concerns about the maturity of scope 3 accounting methodologies, differences in company readiness, and the cost and complexity of collecting value chain emissions data across all categories at once. At the same time, staff said companies that are already prepared to report more comprehensively would still be able to disclose the remaining categories voluntarily.

The workshop also added more detail on what CARB expects within each required scope 3 category. For each category, companies would be expected to disclose the category name and number, a description of the activities included, the quantification and accounting methods used, total emissions in metric tons of CO2e, explanations for any excluded emissions, and the percentage of emissions calculated using primary data.

CARB is proposing more detailed reporting mechanics across all scopes

Beyond the scope 3 phase-in, the workshop made clear that CARB is focused not only on what companies report, but also on how those disclosures are constructed and explained. Staff outlined proposed general reporting requirements intended to implement the Greenhouse Gas Protocol’s principles of relevance, completeness, consistency, transparency, and accuracy.

Those proposed requirements would include disclosure of organizational boundaries and consolidation approach, the methodologies used to calculate or measure emissions, global warming potential values and assessment report vintage, emission factor sources, and any process-specific models or tools used in quantification. CARB also discussed requiring companies to identify missing data, explain substitute data sources or estimation methods, and describe assumptions used in calculating emissions.

Another notable concept was uncertainty disclosure. Staff proposed that companies assess uncertainty in their quantification methodologies and either provide quantitative or qualitative measures of uncertainty, or explain why measuring uncertainty is not feasible. CARB also previewed rules around data exclusions, under which companies could exclude emissions information only where the omission or misstatement would not reasonably be expected to influence how users understand the company’s greenhouse gas inventory, risks, opportunities, or impacts.

CARB also said reporting entities would need to disclose changes to accounting or quantification methods and recalculate prior-year emissions when cumulative changes in corporate structure, methods, data sources, or emission factors would change base-year emissions by more than 5 percent.

Scope 2 and methodology alignment remain important themes

The workshop also included useful details on scope 2 reporting. Staff said reporting entities would need to disclose emissions by source type, such as electricity, steam, heating, and cooling, and report both total emissions and constituent greenhouse gases in carbon dioxide equivalent terms. CARB also said scope 2 emissions would need to be calculated and reported using both market-based and location-based methods.

Notably, CARB said it is not proposing at this time to require alignment with the pending update to the Greenhouse Gas Protocol’s scope 2 guidance. Instead, staff said the proposal would incorporate the 2015 version currently in effect. That may be an important signal for companies closely tracking interoperability across disclosure regimes.

Biogenic emissions and removals got more attention than many may have expected

CARB also previewed how it is thinking about biological and biogenic emissions reporting. Staff said carbon dioxide emissions from biomass and other biological sources would be reported separately rather than rolled into scope 1, 2, or 3 totals. Methane and nitrous oxide from combustion would remain in the relevant scope totals, while upstream life-cycle greenhouse gas emissions from biomethane production, processing, and transportation would be reported in the relevant scope 3 categories.

CARB also said companies could separately disclose voluntary investments or management activities that result in biological greenhouse gas sequestration, but those voluntary reductions or removals would need to be reported separately from gross scope 1, 2, and 3 emissions.

Assurance requirements are also coming into sharper focus

The workshop offered more direction on assurance as well. Staff proposed that beginning with reports submitted in 2027, companies would be required to obtain independent third-party limited assurance for disclosed scope 1 and scope 2 emissions, including separately reported biogenic CO2 emissions. Reasonable assurance could be used instead of limited assurance.

CARB said it intends to retain a previously discussed list of acceptable assurance standards and asked for feedback on whether those different standards produce sufficiently comparable outcomes. Staff also previewed proposed requirements for assurance reports, including identification of the emissions covered, the assurance conclusion, basic contact information, and the date the engagement was completed. CARB also raised additional questions about whether assurance providers should disclose other services provided to the reporting entity and whether providers should rotate over time.

Insurance entities may not remain outside the 2027 framework

Another meaningful topic was the treatment of insurance companies. CARB said the initial 2026 regulation exempted insurers from reporting greenhouse gas emissions to CARB because of existing reporting obligations through the California Department of Insurance. But staff said that rationale may not carry forward into 2027, especially because CDI disclosures may not provide the level of standardized scope 1, 2, and 3 emissions data CARB expects under SB 253.

CARB therefore proposed allowing insurance entities to report to CARB the greenhouse gas data they are already submitting under CDI’s program, along with any additional data needed to meet the requirements of Health and Safety Code section 38532.

CARB also spent time on costs, feasibility, and economic analysis

The workshop was not limited to disclosure mechanics. CARB also discussed stakeholder feedback on costs and its developing economic analysis. Staff said commenters had expressed a wide range of views, with some arguing that compliance costs are being underestimated, especially for scope 3 accounting and assurance, and others suggesting some costs may be overstated because of existing reporting infrastructure, interoperability with other regimes, and technological improvements.

In response, CARB said it had adjusted its preliminary analysis by using the upper bound of SEC reporting cost estimates rather than midpoint estimates, removing assumptions that assurance costs decline over time, and assuming compliance costs are entirely attributable to CARB’s program. At the same time, staff acknowledged that real-world costs will vary significantly depending on sector, company size, existing reporting systems, in-house expertise, and prior experience with scope 3 reporting or assurance. CARB also noted that some stakeholders pointed to benefits from disclosure, including improved supply chain management, increased investment and valuation benefits, and the possibility of voluntary emissions reductions following disclosure.

The larger takeaway is that CARB is trying to balance interoperability with standardization

Taken as a whole, the workshop suggested that CARB is trying to strike a balance between interoperability and rigor. Staff repeatedly emphasized that California does not want to reinvent carbon accounting and is trying to align with established Greenhouse Gas Protocol concepts wherever possible. At the same time, the state is clearly moving toward a more formalized and prescriptive reporting program, with defined disclosure elements, assurance requirements, and public transparency expectations.

The proposed scope 3 phase-in may be the clearest example of that balancing act. CARB appears willing to acknowledge current market limits and allow a more gradual path for some requirements, but the direction of travel remains toward broader and more standardized corporate greenhouse gas disclosure.

What companies should watch next

For companies preparing for SB 253 implementation, the immediate message is not that the rules are settled, but that the architecture is becoming much clearer. Businesses should watch closely for the full proposal later this fall, the listening sessions beginning August 5, 2026, and any additional guidance CARB provides on reporting processes, methodologies, and assurance expectations.

In practical terms, companies may want to use this period to assess scope 3 readiness, review methodology documentation, evaluate internal data systems, and begin planning for assurance. If CARB’s latest workshop is any indication, California is moving steadily toward a regime that will expect not only more disclosure, but more disciplined and transparent disclosure.