Enviro group sues California air regulators over carbon market overhaul

By Camille von Kaenel | 07/07/2026 01:15 PM EDT

Communities for a Better Environment says the California Air Resources Board failed to fully study changes meant to ease pressure on oil refineries and other industries.

An oil refinery is seen.

CARB is getting sued for a recent move to give refineries some relief from its signature climate rules. Rich Pedroncelli/AP

SACRAMENTO, California — An environmental group is suing the California Air Resources Board over its recent carbon market overhaul, arguing that the agency rushed to adopt changes to the market that gave relief to refineries and other industries.

What happened: Communities for a Better Environment filed a lawsuit against CARB in Los Angeles County Superior Court on Wednesday.

The environmental group is arguing under the California Environmental Quality Act that CARB did not fully analyze its proposed changes to the carbon market, under which companies buy a gradually declining number of pollution permits to cover their emissions, before taking a final vote. It wants a judge to cancel CARB’s vote and send the agency back to the drawing board.

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The most controversial part of CARB’s overhaul, which it approved May 29, would allow companies to avoid having to buy pollution permits for some of their emissions if they show they are investing in technologies that reduce emissions, like carbon capture and storage. CARB said the goal was to reduce emissions while also reducing some of the regulatory and cost pressure on vulnerable industries, like in-state refineries.

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