Newsom, Legislature Prioritizing Calif. Cap-and-Trade Program Extension
California Gov. Gavin Newsom announced Tuesday he along with Senate President pro Tempore Mike McGuire and Assembly Speaker Robert Rivas would work together to extend the state’s Cap-and Trade Program this legislative year.
Newsom noted updates on extending the program would be revealed “in the coming weeks.”
“California must continue to lead on reducing pollution and ensuring our climate dollars benefit all residents,” Newsom said in a news release. “That’s why we’re doubling down on cap-and-trade: one of our most effective tools to cut emissions and create good-paying jobs. Cap-and-trade is a huge success and, working together, we’ll demonstrate real climate leadership that will attract investment and innovation to deliver the technologies of tomorrow, right here in California.”
Tuesday’s announcement was made a week after President Donald Trump published Executive Order: Protecting American Energy from State Overreach. The order called out states with emissions reduction goals that included California, New York and Vermont.
According to the EO, these state policies increase energy costs for consumers and undermine the principles of federalism by imposing the regulatory preferences of a few states on the entire nation.
The EO directs the Attorney General to identify and take action against any laws that may be unconstitutional or preempted by federal law, particularly those related to climate change or environmental initiatives.
Meanwhile, California Assembly Bill 1207 and Senate Bill 840, both introduced on Feb. 21, aimed to reauthorize extending the program past its current end date of 2030 before being amended.
AB1207 was amended on Mar. 17 to require the California Air Resources Board to “consider the full social cost associated with emitting a metric ton of greenhouse gases, as determined by the United States Environmental Protection Agency in November 2023.”
Meanwhile, SB 840 was amended on Mar. 26 to “extend indefinitely the requirement for the Legislative Analyst’s Office to annually submit to the Legislature the report on the economic impacts and benefits of those greenhouse gas emissions targets. The bill would require the committee, at a public hearing, to review the annual report by the Legislative Analyst’s Office.”
The Trump administration sued California in October 2019, alleging its Cap-and-Trade Program — which has been linked to the Canadian province of Quebec since 2014 — constituted a treaty and overstepped the federal government’s authority. The Biden administration dropped the lawsuit in April 2021.
The California Carbon Allowance V25 December 2025 forward delivery contract traded at $27.25/mt and $28.27/mt on the Intercontinental Exchange by 1 p.m. CT. On Monday, OPIS assessed the CCA V25 December 2025 price at $26.69/mt.
Reporting by Mayra Cruz, mcruz@opisnet.com
Editing by Kylee West, kwest@opisnet.com
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