California Air Resources Board to Consider Free Carbon Permits for Refineries

California's statewide average gasoline price has reached $6 per gallon, according to CalMatters. The increase follows the Iran war and the closure of two refineries in the past six months. The California Air Resources Board will decide on May 28 whether to issue as much as $4 billion in new free carbon emission permits. Half of the permits would go to the fossil fuel industry.

Companies receiving the permits would be required to invest in clean energy projects. Revenue from carbon market auctions could drop from about $4 billion annually to $2 billion, the Legislative Analyst's Office estimated. State air regulators stated that the allowances are limited and temporary and may be rescinded.

Environmental groups said the plan would weaken the cap-and-invest program and reduce progress toward 2030 emission targets.

Zach Leary, a lobbyist for the Western States Petroleum Association, said the state is acknowledging that affordability and ambition are not getting along very well right now. Chloe Ames, a policy adviser with NextGen Policy, said the proposal would kneecap the program. The heads of the Assembly's climate and energy committees said the proposal reflects the Legislature's focus on affordability.