Board to Vote on California Cap-and-Invest Amendments at the May Meeting
On May 15, 2026 the California Air Resources Board (CARB) released the public agenda for the May Board meeting. The agenda was highly anticipated by market players eager to learn if CARB would be able to stick to its target date for a vote on the Cap-and-Invest amendments package, keeping the timeline in place for an effective date before free allocations for 2027 must be distributed in fall 2026.
Indeed, the agenda for May 28, 2026 at 9:00am PT includes item 26-3-3: Public Hearing to Consider Proposed Amendments to the Regulation for the California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms. It will be heard in conjunction with item 26-3-2: Public Hearing to Consider Proposed Amendments to the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions. The Board may continue the meeting on Friday, May 29, 2026, at 9:00 am PT if necessary.
The finalization of California's Cap-and-Invest Program Review will conclude a process that began in 2023 and should result in positive market sentiment. The May auction results will be released the same day as the scheduled Board vote. Meanwhile, declining state-owned auction revenues remain a point of contention among California legislators and environmental groups. The Governor indicated he will work with legislative leaders and stakeholders to resolve funding issues.
Quebec Publishes Program Review Regulatory Package
With California sending a final rulemaking package to the Board, Quebec’s MELCC has published the long-awaited regulatory update for its Program Review process.
Elements of the draft regulatory package include:
- Quebec is restructuring its compliance period length to align with California changes
- Quebec is reducing its offsets usage quota from 8% to 6% starting in 2027, while introducing a Quebec-DEBS requirement
- MELCC looks to be abandoning the 17 million allowance supply adjustment it floated earlier; the province is sticking with its current cap trajectory through to 2030. The post-2030 cap trajectory was not included, and is likely to be establish at a later stage
A public comment period for the package runs through July 4. Quebec would need to finish its Program Review process by late August, ahead of provincial elections in October.
Given the latest developments in California and Quebec, the likelihood of both jurisdictions completing their Program Review processes by fall 2026 is increasing. Completion of these processes would then allow both jurisdictions to turn their attention to linkage with Washington.
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