Draft cap-and-trade rules draw opposition from labor over refineries

By Camille von Kaenel | 02/13/2026 07:00 AM EST

The opposition exposes a fault line in the environmental, labor and business coalition that helped give California Gov. Gavin Newsom a major win on cap and trade last year.

The Chevron Products Company El Segundo refinery is seen.

A powerful construction union is opposing the draft rewrite of California’s signature climate policy. Ashley Landis/AP

SACRAMENTO, California — A powerful construction union is breaking with California climate regulators over the state’s draft rewrite of its cap-and-trade program, warning the proposed changes could accelerate refinery closures and cost jobs.

What happened: Chris Hannan, president of the State Building and Construction Trades Council of California, told the California Air Resources Board in a letter the union was concerned the draft rewrite would drive more refineries out of state by imposing strict in-state pollution limits.

“Unfortunately, CARB’s current proposal does not reflect our understanding that regulations should be designed to ensure our employer companies participating in the Cap-and-Invest program can continue operating within the state,” he wrote. “If these regulations are finalized as currently proposed, they would lead to more refinery closures, costing our members their jobs and middle-class livelihoods for their families, while also causing higher pump prices for all Californians.”

Advertisement

The letter, sent last week, marks a major turnaround from September, when the same union proved pivotal in extending the cap-and-trade program by backing AB 1207 in the waning days of the session, largely because it sets aside $1 billion in revenues a year for high-speed rail.

GET FULL ACCESS