Overview of AB 1305
Introduced: February 16, 2023
Effective from:October 7, 2023
Last modified: January 1, 2024
Region(s): California, United States
About AB 1305
California’s AB 1305 Voluntary Carbon Market Disclosures Act sets a national precedent by directly regulating climate-related claims and voluntary carbon offset transactions.
The law targets corporate greenwashing by requiring detailed, transparent, and project-level disclosures for any entity that sells carbon credits, uses them to support environmental claims, or makes climate-related public statements in California.
Public website disclosures must be updated annually and cover emissions baselines, offset verification, and credit-level metadata.
Criteria for compliance
- Offset Sellers: Any company marketing or brokering voluntary carbon credits in California.
- Offset Buyers with Claims: Companies that purchase and retire offsets and make public-facing statements (e.g., “net-zero,” “carbon-neutral”) tied to them.
- Claimants without Offsets: Any business making climate- or emissions-related claims in California, even if no offsets are used.
Note: There is no revenue or size threshold. Compliance hinges solely on whether the company does business in California.
Compliance timeline
- January 1, 2024: Law goes into effect; companies begin collecting data.
- January 1, 2025: First public disclosure due (covering CY 2024 activity).
- June 30 annually: Required updates due for previous year; interim updates must reflect material changes in offsets or claims.
Disclosure requirements
Offset Sellers must disclose Credit ID, project name and location, carbon standard used, quantification method, verification status, vintage, volume sold and/or retired.
Offset Claimants must disclose all project-level details tied to claims, including vendor, registry, credit retirement data, and offset type.
All Claimants (with or without offsets) must disclose:
- GHG boundary and methodology
- Baseline year and progress toward targets
- Whether third-party verification was used
Key obligations
- Post all required details clearly on the company’s public website.
- Ensure data reflects the most recent offset transactions and claims.
- Maintain transparency across supply chain or marketing claims involving emissions.
Third-party assurance
Not legally required. Companies must declare whether any emissions data, offset credits, or claims have been independently verified.
Penalties for non-compliance
- Up to $2,500 per day per violation, capped at $500,000 per year
- Enforced by the California Attorney General or local district attorneys
