CER Compliance Offset Program
The Compliance Offsets Program is an important cost-containment element within the broader Cap-and-Trade Program. The California Air Resources Board issues ARB Offset Credits to qualifying projects that reduce or sequester greenhouse gases (GHG) pursuant to six Board-approved Compliance Offset Protocols.
Compliance offsets are tradable credits that represent verified GHG emissions reductions or removal enhancements from sources not subject to a compliance obligation in the Cap-and-Trade Program. In addition to their climate and other environmental benefits, offset credits provide important cost containment and compliance flexibility for covered entities.
Under the Cap-and-Trade Program, covered entities may use compliance offset credits to satisfy a small percentage of their overall compliance obligation. This percentage – called the quantitative usage limit – applies to each individual covered or opt-in covered entity for each compliance period. Compliance entities may use ARB Offset Credits to meet up to 8 percent of their compliance obligation for emissions through 2020; 4 percent of their compliance obligation for emissions from 2021-2025; and 6 percent for emissions from 2026-2030. Starting with 2021 emissions, no more than one half of the quantitative usage limit may be sourced from projects that do not provide direct environmental benefits in the state.
