Environmental Developments To Watch In California In 2026

California will continue to set the pace for environmental regulation in 2026, using its rulemaking, enforcement, and market influence to drive requirements that often become de facto national standards for companies doing business in the state. Even amid uncertainty and change at the federal level, expect California agencies and local governments to press ahead with ambitious climate and sustainability policies, while courts and the Legislature shape how quickly—and how broadly—those policies take effect. For regulated entities, the result is a fast-moving compliance landscape where early awareness, thoughtful planning, and practical implementation strategies can meaningfully reduce risk and cost.

Beveridge & Diamond (B&D) closely tracks developments, upcoming deadlines, and business implications for companies with operations in California. Below we summarize key areas of activity and what companies should expect in the year ahead.

Climate Regulation & Reporting

SB 261 and SB 253

The California Air Resources Board (CARB) began implementing California’s corporate climate-disclosure statutes: SB 253 (Climate Corporate Data Accountability Act) codified in HSC § 38532, and SB 261 (Climate-Related Financial Risk Act) codified in HSC § 38533. CARB continues informal, information-gathering activities but has also begun promulgating regulations to define and implement both statutes. On February 26, 2026, CARB will hold a public hearing to consider the adoption of the proposed California Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure Initial Regulation (“Proposed Regulation”). For more information on the Proposed Regulation, please see our previous alert.

The deadlines for reporting under both statutes are in flux. The statutory deadline for covered entities to publish their first climate-related financial risk report under SB 261 was January 1, 2026 (and biennially thereafter), but, on November 18, 2025, in a case brought by the U.S. Chamber of Commerce, the U.S. Court of Appeals for the Ninth Circuit granted an injunction against the enforcement of SB 261, pending appeal. CARB subsequently published a notice that it would not enforce the January 1, 2026 deadline while that injunction was in force. The new deadline will be set after the litigation concludes. For entities that choose to report voluntarily before the deadline, CARB opened a public docket on December 1, 2025.

SB 253 requires reporting of Scope 1 and Scope 2 greenhouse (GHG) emissions in 2026 but does not establish a specific deadline; CARB’s proposed initial deadline is August 10, 2026. CARB is currently gathering feedback on Scope 3 emissions reporting.

Cal. Chamber v. CARB

On February 3, 2025, the District Court granted CARB’s motion to dismiss the Supremacy Clause and extraterritoriality claims against SB 253 and SB 261 for lack of standing and ripeness and for failure to state a claim. After this order, the case proceeded primarily on the First Amendment theory, and Plaintiffs moved for a preliminary injunction to enjoin both laws, which was denied. For background on the underlying claims in Cal. Chamber v. CARB, see our 2025 article, and for more information on the denial, see our previous alert.

Plaintiffs appealed and moved for an injunction pending appeal, which was again denied by the District Court. On November 18, 2025, the U.S. Court of Appeals for the Ninth Circuit granted an injunction against enforcement of SB 261, pending appeal, and denied it as to SB 253. Arguments regarding the appeal were heard on January 9, 2026. To date, the Court has not issued a decision.

SB 1383 – Organic Waste & Food Collection

Pursuant to the SB 619 process, 126 jurisdictions gained more time to comply with SB 1383 regulations. Moreover, 167 local governments have waivers or exemptions for collection requirements based on being rural, having a low population, or an elevation waiver. Rural areas without a low enough population for a waiver can pass a self-haul ordinance, ensuring their waste is sorted into organics, recyclables, and landfill categories.

Since the January 2022 implementation of SB 1383, 97% of jurisdictions with requirements, and 28% of those with rural or low population waivers, report having residential organics collection, contributing to the 2025 target of reducing organic waste disposal by 75%. In addition, towards the 2025 goal of reducing edible food waste by 20%, the California Department of Resources Recycling and Recovery (CalRecycle) reported that 217,042 tons of unsold food were recovered by local programs in 2023, which is 94% of the 2025 target of 231,476 tons.

CalRecycle is responsible for evaluating compliance of jurisdictions, non-local entities, and local education agencies subject to SB 1383 regulations. If a jurisdiction fails to enforce or an organic waste generator is in multiple jurisdictions, CalRecycle may also take direct enforcement action. The jurisdictions that have been subject to compliance evaluations are listed here. Final enforcement order documents may be found on the CalRecycle Enforcement Order webpage.

Cap-and-Invest

California’s Cap-and-Trade regulation, now renamed “Cap-and-Invest,” covers approximately 400 facilities in California and 80% of the state’s GHG emissions. It sets a cap on emissions, which declines by approximately 14 million metric tons (currently about 5% of capped emissions) per year. Regulated emitters must surrender allowances or offsets for each metric ton of carbon-dioxide-equivalent GHG emissions.

In September 2025, the California legislature passed a bill, AB 1207, which authorizes CARB to extend the Cap-and-Invest program through 2045. Although most changes to the program were minor, the bill was significant in that it included provisions confirming that CARB should provide free allowances to regulated facilities through 2030, and allows regulated entities to submit offsets, rather than allowances, for up to 6% of a covered entity’s compliance obligation.

In 2026, CARB is expected to adopt amendments to its Cap-and-Invest regulation to comply with AB 1207 and to increase the stringency of the cap, resulting in a more rapid decline of GHG emissions.

Low Carbon Fuel Standard

In 2025, CARB adopted amendments to its Low Carbon Fuel Standard (LCFS) that represent a major revision to the program. In particular, CARB significantly tightened carbon intensity (CI) reduction targets to 30% by 2030 and 90% by 2045. The amendments also include an “Automatic Acceleration Mechanism” or “ratchet” that will further tighten the CI targets if the market for LCFS credits is weak. The amendments were in part designed to address a glut of LCFS credits, which has depressed the price from over $200 per ton in 2020 to $50 to $75 per ton in recent months. The amendments also include stricter rules for obtaining credits with biomass fuels and phase out of some credits for avoided methane emissions.

Mobile Source Regulation 

Congress’s Passage of Congressional Review Act Resolutions

The Congressional Review Act (CRA) allows Congress to overturn certain federal agency actions. It requires agencies to report the issuance of “rules” to Congress and provides Congress with special procedures, in the form of a joint resolution of disapproval, under which to consider legislation to overturn rules. In June 2025, Congress invoked the CRA to pass resolutions (CRA Resolutions), signed into law following passage in the House of Representatives and Senate, rescinding Clean Air Act preemption waivers that had allowed CARB to adopt three regulations: (i) Advanced Clean Trucks, (ii) Advanced Clean Cars II, and (iii) the “Omnibus” Low NOx regulation. The waivers also enabled Section 177 states to adopt identical standards. For an overview of these regulations, see our 2025 article.

Litigation Regarding Advanced Clean Cars and Omnibus Regulation

On June 12, 2025, following the passage of the CRA Resolutions, California and 10 other states filed a lawsuit challenging the CRA Resolutions, seeking declaratory and injunctive relief to invalidate them. In general, the states argue that the CRA applies only to federal rules and, therefore, Congress improperly relied on the CRA to rescind the federal waivers. Furthermore, they contend that the CRA Resolutions were passed against the advice of the Senate Parliamentarian, the “sole definitive arbiter […] of the CRA parliamentary mechanism” in that chamber, and the Government Accountability Office, the entity on which Congress relies for CRA applicability determinations. Both of these entities had determined that U.S. Environmental Protection Agency (EPA) waivers are not subject to the CRA because they are "adjudicatory orders" rather than "rules."

As of January 2026, the case remains pending in the Northern District of California and is at the motion-to-dismiss stage, with a hearing scheduled for February 19, 2026.

Repeal of Advanced Clean Fleets

For an overview of the Advanced Clean Fleets (ACF) regulation, please see our 2025 article.

Throughout 2025, federal actions limited the applicability of ACF to state and local government fleets. Moreover, AB 1594 directed CARB to provide flexibility to most public agency utilities using highly specialized vehicles to carry out their operations. As a result of this, in September 2025, CARB approved amendments to ACF: (i) granting flexibility to heavy-duty vehicle public fleet owners in meeting the regulation’s requirements, along with streamlined processes for applying for exemptions; (ii) repealing the regulation with respect to federal and private fleets; and (iii) delaying the existing 100% zero-emission vehicle purchase requirement, applying to all remaining fleets, from 2027 to 2030. The amendments are expected to be effective before January 2027.

CEQA Reform

California adopted several major reforms to the California Environmental Quality Act (CEQA) in 2025 aimed at streamlining environmental review for projects tied to housing and climate resilience. These reforms included Senate Bill 131 (SB 131), Assembly Bill 130 (AB 130), Senate Bill 71 (SB 71), and Senate Bill 79 (SB 79). The key impacts of SB 131 and AB 130 on California’s regulated community are further described in B&D’s July 2025 news alert and January 2026 news alert.

The regulated community should prepare for the possible passage of Assembly Bill 1083 (AB 1083) and the Building an Affordable California Act (BACA) in 2026. AB 1083 would narrow the scope of CEQA exemptions, expand protections for environmentally sensitive lands, and introduce additional administrative record requirements that could enable more legal challenges by environmental non-profits and NGOs. Conversely, BACA is a proposed statewide ballot initiative intended for November 2026 that would streamline environmental review under CEQA and further restrict litigation challenging projects deemed “essential” to the public interest.

Collectively, these developments signal a recalibration of CEQA toward earlier, programmatic planning decisions, particularly for housing, transit, and climate-aligned infrastructure. SB 71 reflects a substantive shift in CEQA law by expanding exemptions intended to facilitate transit development. Similarly, SB 79 redirects CEQA review on early planning decisions, thereby materially easing CEQA burdens for transit-oriented housing projects. Finally, if California voters pass BACA in November 2026, that would signal the public’s broader support for streamlined permitting and administrative and judicial processes for designated “essential” projects. Taken together, these reforms suggest that projects aligned with the state’s housing, transit, and climate objectives are likely to benefit from faster approvals and fewer project-level environmental reviews. However, pending proposals such as AB 1083 evidence ongoing concern that such streamlining would undermine key environmental protections CEQA is designed to provide.

Environmental Justice

California, a longstanding leader in the state environmental justice (EJ) space, continues to demonstrate its commitment to EJ, even as the Trump administration scales back and eliminates federal EJ programs. In 2025, California co-led and joined Attorneys General from 12 additional states in issuing Guidance Affirming the Importance and Legality of Environmental Justice Initiatives in response to the rollback of federal EJ policy. The California Department of Pesticide Regulation (DPR) hosted the inaugural meeting of its newly formed Environmental Justice Advisory Committee, established in 2023 to advise DPR on EJ concerns in communities with the highest exposure to pesticides. The highlights of such meeting included (i) a review of the Draft Committee Charter, (ii) an overview of pesticide use in California, (iii) the election of three co-chairs, and (iv) an initial identification of key topics for the Committee to consider in its upcoming efforts. Find the meeting materials here. Moreover, CalEPA continued funding projects through its existing EJ Action Grants Program, which invests state dollars in projects, awarding over $4 million to projects around the state designed to advance EJ.

On the legislative front, while CEQA reforms enacted through AB 130 and SB 131 aim to accelerate urgently needed development, they also eliminate CEQA’s public environmental-review-and-comment process for many urban infill projects in or near EJ communities. However, AB 130 includes provisions requiring environmental investigations and cleanup of such project sites, as well as mitigation of hazards from surrounding properties and activities.

Consistent with the state’s longstanding commitment to EJ, we expect to see continued EJ policy action by California, especially facing the likely continued reversal of federal EJ policy and potential challenges to state EJ programs.

EPR and Recycling

California’s EPR regulatory efforts are moving forward, and we expect 2026 to be a pivotal compliance year. CalRecycle is on track to finalize implementing regulations for SB 54 (single-use packaging and plastic food service ware) in early 2026, triggering producer obligations in the first quarter of the year. California is also leading the nation in its efforts to expand EPR programs to textiles, with the stewardship organization expected to be approved this year. California continues to implement several EPR programs covering a variety of products, including batteries, paint, and tires.

SB 54 – Plastics and Packaging 

California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act, SB 54 (see more details on the legislation here and regulatory developments here) shifts the burden of recycling and waste reduction to “producers” of certain single‑use packaging and plastic food service ware (“covered material”), with the goal of ensuring that 100% of the covered material is either recyclable or eligible to be labeled as compostable by 2032. The “producer” is typically the California-based manufacturer that either owns the brand/trademark or has an exclusive license to manufacture under that brand in the state. Producers are required to register with a Producer Responsibility Organization (PRO) and report the volume of covered materials. Unlike other states implementing EPR, California also requires producers to submit source reduction plans that demonstrate efforts to reduce single-use packaging and other plastic packaging materials.

The PRO will largely implement the Act’s requirements with oversight from CalRecycle. While the PRO does not have enforcement authority, it may report non-compliant producers to CalRecycle, which could trigger enforcement actions by the agency. Producers may comply with the Act by either assuming their compliance obligations individually, or by participating in the state-approved PRO, the Circular Action Alliance (CAA).

SB 54 required CalRecycle to adopt implementing regulations by March 8, 2025. However, California’s Governor Gavin Newsom sent the regulations back for revision, citing excessive costs and burdens on businesses. CalRecycle reissued the proposed SB 54 regulations on May 16, 2025. The public comment period for the draft regulations closed on June 3, 2025. On July 2, 2025, CalRecycle published the draft SB 54 regulations. On January 9, 2026, CalRecycle withdrew its proposed regulations stating that it wants to make changes related to food and agricultural commodities. The state will open a new 15-day public comment period. When the regulations ultimately go into effect producers must:

• Either register with CAA or apply to be an independent producer, and
• Submit 2023 data to CAA on the quantity and type of covered material sold in the state, which will serve as the baseline for verifying compliance with the target of 25% reduction in plastic packaging (by weight and unit) by 2032.

CAA anticipates the following compliance schedule:

• May 31, 2026: Producers submit 2025 data to CAA on the quantity and type of covered material sold in or into the state.
• June 15, 2026: CAA submits program plan to CalRecycle Advisory Board.
• Sometime in 2026: Producers submit individual source reduction plans to CAA.

Companies that are likely to be considered producers should prepare now to register with CAA and compile the information needed for the 2023 baseline report, given the short 30-day window between finalization of the regulations and their effective date.

SB 707 – Textiles 

SB 707, enacted in September 2024, requires qualified producers of apparel and textile products to form and join a Textile Producer Responsibility Organization (PRO). In 2025, CalRecycle began accepting applications for PRO designation, with submissions due January 1, 2026. CalRecycle must approve a PRO by March 1, 2026, selecting an entity that demonstrates the capacity, financial stability, and operational ability to implement a statewide textile recovery program. By July 1, 2026, all eligible producers must join the approved PRO.

Once established, the PRO must submit a statewide plan to CalRecycle that addresses the collection, transportation, repair, sorting, recycling, and safe management of covered clothing and textiles. The PRO will charge each participating producer annual fees to fund its operations.

Looking ahead, CalRecycle must implement regulations by July 1, 2028. No proposed regulatory text has been released to date. By July 1, 2030, or upon approval of the plan, whichever occurs first, noncompliant producers of covered products will be subject to administrative civil penalties up to $50,000 per day.

SB 1143  – Paint

California continued implementing SB 1143 in 2025, which expands and modernizes the state’s architectural paint stewardship program administered by CalRecycle. While no final implementing regulations were adopted in 2025, CalRecycle advanced the program through informal rulemaking, including public workshops, stakeholder outreach, and data requests to support future economic and regulatory analysis. These efforts focused on refining definitions, reporting and recordkeeping obligations, compliance mechanisms, and enforcement authority as the program expands to additional paint and coating products. SB 1143 includes phased applicability dates for certain newly added paint and coating products, providing that manufacturers of those products are not subject to stewardship obligations until January 1, 2028, or the date CalRecycle approves an updated stewardship plan covering those products, whichever occurs first, allowing time for stewardship organizations to expand collection, funding, and reporting systems.

Manufacturers and stewardship organizations should continue to monitor CalRecycle’s formal rulemaking activity and prepare for expanded reporting and compliance obligations as permanent regulations are developed.

AB 2440 and SB 1215 – Batteries and Electronic Waste

California continues to broaden its battery and electronic waste regulatory framework through two complementary but mutually exclusive laws – AB 2440 and SB 1215.

AB 2440 (the Responsible Battery Recycling Act) establishes a comprehensive EPR program for loose and removable batteries, shifting end-of-life management costs to battery producers. Covered producers are required to join or form a CalRecycle-approved battery stewardship organization responsible for statewide collection, transportation, recycling, consumer education, and reporting. Stewardship organizations must submit detailed program plans, meet performance targets, and fund program operations, with phased implementation beginning in 2025 as CalRecycle develops oversight and enforcement mechanisms. Retailers are also subject to takeback and information requirements under the stewardship framework.

SB 1215, by contrast, amends the Electronic Waste Recycling Act to bring covered battery-embedded products—products containing batteries that are not designed to be easily removed by consumers—into California’s existing e-waste program. Rather than an EPR model, SB 1215 relies on a point-of-sale recycling fee to fund collection and recycling. CalRecycle has adopted regulations setting the fee at 1.5% of the retail purchase price, which retailers must collect and separately state beginning January 1, 2026. Manufacturers face additional obligations, including identifying and reporting covered and exempt battery-embedded products to retailers and CalRecycle by July 1, 2025, complying with labEnvireling requirements that identify the manufacturer and battery chemistry, and maintaining records for audit and enforcement purposes. Annual manufacturer reporting obligations begin in 2027.

Companies selling battery-powered products in California should assess early whether their products contain loose versus embedded batteries, as that determination controls which stewardship program applies, when stewardship organization participation is required, and whether a point-of-sale recycling fee must be collected.

Tires

Two significant legal updates impacting California tire manufacturers and transporters occurred in 2025. The first is the 13th Edition of the Five-Year Plan for the Waste Tire Recycling Management Program, which CalRecycle adopted on April 22 and published on July 1, 2025. While largely in line with previous plans, CalRecycle announced changes to the Waste and Used Tire Hauler Manifest Program pursuant to SB 1181. Specifically, CalRecycle has begun replacing the paper manifest system applicable to transporters with an electronic mobile manifest system. The Five-Year Plan describes submission of electronic manifests as an “option” that is designed to “modernize the waste and used tire tracking system and increase data accuracy, participant compliance, and accountability” (p. 18). However, because SB 1181 allows CalRecycle to require electronic data submissions, transporters should be prepared for a full transition to electronic manifest submissions in the near future. Further information and instructions for submitting electronic manifests are available here.

Second, CalRecycle approved the Tire Equipment Loan Program in September 2025. This program provides loans of up to $1 million to for-profit, non-profit, and local government entities that want to develop a reuse or recycling program for tires that would otherwise go to a landfill. Eligible project types must be designed in accordance with certain eligibility criteria, including: (a) reuse projects that will prolong the useful life of a waste tire product; (b) recycling and remanufacturing projects that produce a value-added feedstock; or (c) projects that utilize postconsumer or secondary waste tire material generated in California and that is typically landfilled or being used to manufacture a value-added feedstock or a finished product. Further information on this loan program is available here.

Proposition 65/Pesticide Labeling and FIFRA Preemption

Pesticide Labeling

In early 2025, EPA sought public comment on a petition that seeks to bar the use of state-mandated cancer risk warnings, such as those required under California’s Proposition 65 (Prop 65), on pesticide labeling. The petition—originally submitted to EPA on August 7, 2024 by the Attorneys General of Alabama, Arkansas, Georgia, Indiana, Iowa, Louisiana, Montana, Nebraska, North Dakota, South Carolina, and South Dakota—was first made available to the public on January 21, 2025, and included a public comment period that ended March 24, 2025.

The petition asks EPA to amend its regulations at 40 C.F.R. section 156.10(a) to expressly provide that “statements or conclusions on FIFRA-registered products that are different from EPA’s express findings and conclusions made during the product’s registration review regarding the product’s likelihood to cause cancer, birth defects, or reproductive harm” are “false and misleading.” With such a change to EPA’s regulations, the petitioners assert that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) will preempt Prop 65 warnings and common law failure-to-warn claims.

In 2023, the Ninth Circuit enjoined California from enforcing Prop 65 as applied to glyphosate labeling. However, petitioners argue that the Court’s decision did not address Prop 65 warnings on pesticide products under other factual circumstances or state “failure-to-warn” claims at all. The petitioners also emphasize that confusion around state and federal pesticide labeling requirements also impacts other FIFRA-regulated pesticides and may have downstream effects for other federally regulated labeling requirements.

The petition remains pending before EPA. Any EPA action on the petition could have consequences well beyond glyphosate by shaping how pesticide registrants approach label strategy and how courts assess FIFRA preemption arguments in Prop 65 and failure-to-warn litigation.

Meanwhile, on January 16, 2026, the U.S. Supreme Court granted certiorari in a FIFRA preemption case, Monsanto v. Durnell to address the different question of whether FIFRA preempts a label-based failure-to-warn claim where EPA has not required the labeling. National uniformity of requirements for highly regulated products and the possibility of more robust federal preemption make this an important case to watch in addition to the petition proceeding described above.

First Amendment

Courts have begun to hold that businesses cannot be compelled to issue Prop 65 warnings under the First Amendment where the compelled speech is “not purely factual and controversial,” a standard set forth in Zauderer v. Off. of Disciplinary Couns. of Sup. Ct. of Ohio. Following a 2023 Ninth Circuit ruling prohibiting compelled Prop 65 warnings for glyphosate in Roundup pesticide, Nat’l Assn. of Wheat Growers v. Bonta, that trend accelerated in 2025 with two new permanent injunctions against the Prop 65 warning requirement. The court in Personal Care Products Council v. Bonta held in August 2025 that cosmetics and personal care products manufacturers could not be compelled to add a Prop 65 warning identifying carcinogenicity and toxicity for titanium dioxide. This followed a May 2025 permanent injunction in Chamber of Commerce v. Bonta, which prohibited food manufacturers from being compelled to add a Prop 65 warning for acrylamide. As a result, in cases where the Prop 65 warning is “not purely factual and controversial” due to issues regarding the carcinogenicity or toxicity of the chemical or product at issue, a Prop 65 warning requirement may be unconstitutional under the First Amendment.

Chemicals/Contaminants of Concern

DTSC’s Proposal to Add Microplastics to the Chemicals of Concern List

The California Department of Toxic Substances Control (DTSC) continues to move forward with its proposal to add microplastics in consumer products to its Candidate Chemical List (CCL) under the state’s Safer Consumer Products (SCP) program. The proposed rule was published in June 2025 with public comment closing in August 2025. In November 2025, DTSC released a background document summarizing its preliminary findings on the potential for exposure and adverse impacts of microplastics in consumer products. DTSC seeks public comment on the background document by January 30, 2026. In particular, DTSC seeks feedback on consumer products such as artificial turf infill, children’s toys that contain primary microplastics, cleaning products, food contact articles such as wrappers and beverage bottles, plastic film mulch, single-use cigarette filters, and water-based interior wall paints. Businesses that manufacture or distribute products that contain plastic should consider submitting comments to DTSC. DTSC also hosted a virtual public workshop to share its preliminary research on December 11, 2025.

Energy Efficiency Standards

In 2025, the California Energy Commission (CEC) continued to aggressively enforce its Title 20 appliance efficiency program, settling dozens of enforcement actions with companies that manufacture and sell covered products. Showerheads and other plumbing fixtures continued to be a targeted enforcement, area, but CEC also obtained settlements with companies that manufacture and sell various other products, including golf cart chargers, wine chillers, LEDs, portable electric spas, battery chargers, computers, and commercial hot food holding cabinets.

CEC’s first-ever flexible demand appliance standard, which applies to pool controls, took effect in September 2025. Flexible demand appliance standards require smart appliances to automatically adjust their operation, helping to alleviate strain on the electric grid by reducing peak demand. CEC adopted its first flexible demand appliance standard as part of its implementation of SB 49 (Skinner, Chapter 697, Statutes of 2019). CEC also issued Requests for Information regarding potential appliance standards for other product categories, including low-voltage thermostats, electric vehicle supply equipment, and, most recently, residential battery energy storage systems.

Water Rights, Tribal Issues, Public Lands, Endangered Species 

Monarch Butterfly ESA Listing Status

As we reported last year, the monarch butterfly remains a closely watched candidate for protection under the Endangered Species Act (ESA). In 2025, the U.S. Fish and Wildlife Service (FWS) continued reviewing the rulemaking and reopened the public comment period from March through May, allowing stakeholders to weigh in on the listing, 4(d) provisions, and critical habitat proposal. Comments addressed the implications for overwintering groves—many of which are eucalyptus stands important to the western monarch’s coastal range.

A notable development occurred in September 2025, when the monarch listing did not appear in the administration’s Unified Agenda of anticipated regulatory actions, and FWS’s rulemaking was reclassified as a “long-term action.” That status indicates that a final listing decision is not expected within the immediate federal fiscal year, is likely at least nine months away, and may not occur at all during the Trump administration.

If finalized, a threatened listing would extend ESA protections to the species and could influence federal consultations and land management decisions in California, particularly regarding habitat conservation and development permitting involving federal actions. Looking ahead, stakeholders should monitor the rulemaking’s timeline, as a final decision in late 2026 would have significant implications for conservation efforts, state-federal coordination, and land-use planning affecting monarch habitat in California.

Central Valley Project and State Water Project

The U.S. Bureau of Reclamation (Reclamation)’s Central Valley Project (CVP), which is operated jointly with the California Department of Water Resources’ State Water Project (SWP), manages the collection, storage, and transport of many millions of acre-feet of water through the Central Valley for delivery to irrigators and municipalities and to meet state and federal ecological and species requirements.

On December 4, 2025, Reclamation issued a Record of Decision adopting a revised long-term coordinated operation plan for CVP and SWP. The new Record of Decision replaces the previous long-term operations decision signed in December 2024. The updated plan responds to Executive Order 14181, dated January 24, 2025, directing federal agencies to take all available measures to increase water deliveries and hydropower production while remaining consistent with federal law and existing environmental protections.

The Record of Decision allows CVP to increase annual water deliveries by 130,000 to 180,000 acre-feet, and SVP by 120,000 to 220,000 acre-feet, depending on hydrologic conditions. The changes will include adjustments to Delta export operations, removal of the Delta Summer and Fall Habitat Action, and removal of early export-reduction concepts from California’s Healthy Rivers and Landscapes Program. It is likely this decision will face legal challenges in 2026.

WIIN Act Contract Conversions and Anticipated Developments

Following the Eastern District of California’s June 30, 2025 decision upholding Reclamation’s mandatory contract conversion process under Subtitle J of the Water Infrastructure Improvements for the Nation (WIIN) Act, Reclamation has continued processing accelerated repayment contracts without additional National Environmental Policy Act (NEPA) or ESA review.

However, an appeal of the district court’s ruling was taken on August 14, 2025. As a result, the court’s decision may not remain the operative interpretation of Subtitle J. Rapid expansion of WIIN Act conversions across the CVP—combined with the Trump administration’s January 2025 Executive Order noted above—may be affected in light of the pending appeal.

In 2026, stakeholders should expect continued administrative implementation of WIIN Act conversions, potential congressional action to extend Subtitle J authorities, and further alignment of CVP operations with the administration’s water delivery directives. The appeal of the district court opinion could also affect CVP operations. Finally, the opinion does not insulate CVP operations (or other discretionary Reclamation actions) from NEPA/ESA review—those remain governed by the usual project-operations decision points (biological opinions, operations criteria, permits, etc.).

Klamath Project Litigation Outlook

The most significant federal development affecting Klamath Project operations and ESA compliance in 2025 was the Department of the Interior’s issuance of updated legal guidance on May 14, 2025. The Acting Solicitor’s memorandum “Klamath Updated Analysis of Endangered Species Act Obligations” (“2025 Guidance”) reaffirmed the Department’s 2021 analysis of Reclamation’s contractual authority and concluded that Reclamation lacks discretionary authority over core Project operations where mandatory delivery obligations apply. Because ESA §7 consultation is required only for discretionary federal actions, the guidance directs Reclamation to reassess its consultation posture and annual operations planning to ensure consistency with binding contracts and statutory mandates. Although the 2025 Guidance reiterates legal conclusions first articulated in 2021, it represents a significant shift from the federal government’s earlier practice of treating Project operations as sufficiently flexible to accommodate ESA‑driven adjustments. It also ties into ongoing litigation before the Ninth Circuit addressing Reclamation’s ESA obligations and the scope of federal authority over Upper Klamath Lake operations. A 2026 decision by the Ninth Circuit could clarify the extent of federal discretion over Project operations and significantly influence the long‑term legal framework governing the Klamath Project. Although the 2025 Guidance was specific to the Klamath, it may also hint at how Reclamation is thinking more broadly about ESA compliance frameworks, including discretionary actions and consultation triggers, so as to potentially impact other California federal irrigation projects.

Regulatory and Legal Developments in the Sacramento–San Joaquin Bay Delta: 2025 Review and 2026 Outlook

California’s long-running effort to update the Bay Delta Plan entered a decisive new phase on July 24, 2025 when the California State Water Resources Control Board released a revised draft update to the Water Quality Control Plan for the San Francisco Bay/Sacramento–San Joaquin Delta Estuary (Bay Delta Plan), marking the most consequential regulatory development affecting the Delta in nearly a decade. The draft update proposes new flow objectives, habitat requirements, and operational constraints applicable to the Sacramento River watershed, the Delta eastside tributaries, and the Delta itself. It also formally incorporates the State’s Healthy Rivers and Landscapes Program—successor to the Voluntary Agreements (VAs)—as a principal compliance pathway, while retaining a prescriptive regulatory pathway should negotiated commitments fail to materialize or prove inadequate. A December 2025 revision of the Bay Delta Plan retained this essential framework.

In 2026, the State Water Board is expected to conduct public workshops, respond to comments, and hold formal evidentiary hearings on the draft update. A Board vote on adoption is likely to take place in late 2026, though delays remain possible if negotiations over the Healthy Rivers and Landscapes Program stall or if the CEQA streamlining proposal encounters legislative or judicial obstacles.

Regardless of the pathway ultimately adopted, litigation is highly likely. Environmental organizations may challenge the adequacy of flow protections or the enforceability of voluntary commitments, while water users and local agencies may contest the scientific basis for flow objectives, the Board’s exercise of authority under the Porter-Cologne Water Quality Control Act, or reliance on CEQA exemptions. Following adoption, implementation proceedings—including water rights actions and development of monitoring and adaptive management programs—will extend well beyond 2026 and will shape Delta operations for years to come.

Water

Implications of the U.S. Supreme Court’s Decision in San Francisco v. EPA

California’s Water Boards will grapple with implementing San Francisco v. EPA, 604 U.S. 334 (2025), in the National Pollutant Discharge Elimination System (NPDES) permits they issue. The case, in which Beveridge & Diamond helped San Francisco secure a major victory at the U.S. Supreme Court, held that NPDES permits cannot impose “end result” prohibitions that hold permittees responsible for receiving water quality. California NPDES permits have long contained these now-forbidden end-result provisions, and the state has reserved the right to impose them as non-federal requirements under the Water Code.

Over the next year, look out for Water Board attempts to impose state-only prohibitions on violating water quality standards. The San Francisco Bay Regional Water Quality Control Board proposed such a term in a recent draft permit, and other Water Boards may follow suit. Environmental groups may also press the Water Boards to “replace” end-result prohibitions with new effluent limitations.

Commercial, Industrial, and Institutional (CII) Permit in LA; Legislation (failed) to Take CII Permit Statewide

During 2025, the Los Angeles Regional Water Quality Control Board continued to progress toward the adoption of a watershed-specific general NPDES permit to regulate stormwater (and certain authorized non-stormwater) discharges from designated privately owned CII facilities in the Dominguez Channel and Los Cerritos Channel watersheds. This effort followed EPA Region 9’s residual-designation determination for these watersheds and would result in a substantial expansion of NPDES permitting requirements to the non-industrial portions of facilities greater than 5 acres in size. Although the revised permit was scheduled for Board consideration in November 2025, the adoption hearing was postponed.

The current revised draft would allow facilities to pursue compliance through one of three pathways. First, participation in a local watershed-management group funding approach. Second, facility-specific design standards to reduce runoff. Or third, direct monitoring-based demonstration of compliance.

In 2026, the most concrete near-term expectation is continued agency work on responses to the additional 2025 comment letters and rescheduling of an adoption hearing. Separately, AB 1313 was introduced in the California Legislature in 2025 and would have codified a requirement for a statewide CII stormwater permit, but the bill was placed on the inactive file in June 2025—making its 2026 trajectory one to monitor.

Data Center Water Use

In January 2025, California Assembly member Diane Papan introduced AB 93, a proposed measure to regulate water use by data centers operating within the state. The bill emerged in response to the rapid expansion of data centers across California, which has driven increased demand for both water and energy resources and raised concerns regarding the state’s long-term sustainability goals. In this context, AB 93 would have required owners or operators of data centers, prior to applying for an initial business license, equivalent authorization permit, or permit renewal from a city or county, to provide their water supplier with an estimate of the facility’s anticipated water use.

The California Assembly passed AB 93 in May 2025, followed by Senate approval in September 2025. In October 2025, however, Governor Newsom vetoed the bill, citing concerns about imposing rigid reporting requirements on a rapidly evolving sector without fully understanding the potential impacts on businesses and technology consumers. The veto was widely interpreted as an effort to avoid constraining growth in California’s data center industry.

Following the veto, Assembly member Papan indicated that she intends to continue working with the Governor’s Office and other stakeholders to develop revised legislation that better balances technological innovation with sustainable resource management.

As a result, additional legislative or regulatory efforts addressing data center water use are likely to emerge in 2026. Companies operating or developing data centers in California should closely monitor these developments, as future proposals could affect project planning, permitting, and long-term operational strategies.

Cal/OSHA

Cal State Auditor Report Alleges Deficiencies in Cal/OSHA’s Enforcement Processes

In July 2025, the California State Auditor’s office released a report highlighting “deficiencies in California's Division of Occupational Safety and Health (Cal/OSHA)’s enforcement processes and staffing levels,” based on a review of 60 case files handled between fiscal years 2019-20 and 2023-24. The report notes that, in certain cases, Cal/OSHA did not demonstrate sufficient rationale for closing workplace complaints without conducting an on-site inspection. In 9 of the 30 uninspected cases reviewed, the report questioned Cal/OSHA’s rationale for deciding not to inspect, noting that the case files “lacked evidence to support that Cal/OSHA had complied with its own policies.” Further, 6 out of 7 uninspected cases involving accidents “lacked documentation to support Cal/OSHA’s decision not to inspect.” Where Cal/OSHA conducted on-site inspections, it “did not consistently document effective reviews of employers’ injury and illness prevention programs (IIPP)” and in some cases “took weeks or even months” to initiate complaint and accident inspections.

The report recommended that Cal/OSHA should, by July 2026, implement various changes to its policies and procedures, including:

• Requiring a thorough rationale for decisions not to conduct on-site inspections and documentation of those decisions.
• For letter investigations, requiring enforcement personnel to include supporting documents from employers (not only employers’ written responses) before closing a letter investigation.
• Specifying how Cal/OSHA personnel should document IIPP evaluations. The report recommended that Cal/OSHA should consider distributing a uniform template for documenting an IIPP evaluation.
• Regarding abatement verification, requiring supporting evidence beyond signed certifications such as photographs and detailed inspector observations.
• Requiring that enforcement personnel document rationales and evidence supporting classification and adjustment factors for each fine, and rationales for all post-citation fine reductions.

Other recommendations relate to addressing staffing shortages and modernizing certain processes and systems.

Cal/OSHA’s response to the California State Auditor’s office lists various changes that are in progress:

• Updating the enforcement branch’s policies and procedures manual. The current manual contains approximately 170 policies, many of which have not been updated in over a decade. Cal/OSHA is updating policies related to complaints, inspection, and abatement. Many of these new policies are targeted to be released in mid-2026.
• Improvements to Cal/OSHA’s staffing level and data management system.
• A portal that will allow complaints to be filed online by any member of the public. This feature is scheduled to go live in 2027.

Businesses should monitor changes to Cal/OSHA policies, procedures, and staffing. As Cal/OSHA implements changes in these areas, employers might see increased inspection activity from Cal/OSHA and face higher levels of scrutiny from Cal/OSHA when responding to complaints, during inspections, and when meeting abatement obligations.

Updated guidance on Lead Standard

Last year’s edition of Environmental Developments to Watch in California discussed Cal/OSHA’s updated lead standards, which went into effect on January 1, 2025. In May 2025, Cal/OSHA issued guidance for construction employers doing dry abrasive blasting, who are subject to an exception that allows a permissible exposure limit (PEL) of 25 µg/m³ as an eight-hour time weighted average during such tasks until January 1, 2030. The updated standard also limits the number of hours a worker can spend conducting dry abrasive blasting until the employer determines the worker’s actual exposure by performing an exposure assessment. Until January 1, 2030, workers whose employers have not yet conducted the exposure assessment can spend up to five hours a day doing abrasive blasting, which will decrease to two hours per day post on January 1, 2030. In the guidance, Cal/OSHA clarifies that once the employer has conducted the exposure assessment, there is no limit on the amount of time an employee may conduct abrasive blasting, as long as exposure is below the permissible exposure limit, taking into consideration the protection provided by respirators. Moreover, Cal/OSHA explains that if an employee is correctly using a respirator with a protection factor of 1,000 at all times, air concentrations of up to 25,000 µg/m³ are permitted until January 1, 2030, while air concentrations of up to 10,000 µg/m³ would be permitted starting on January 1, 2030. Businesses should continue to monitor any further clarifications from Cal/OSHA.

Regulations Coming into Effect in 2026

The following Cal/OSHA regulations take effect in 2026: 

• Confined Spaces in Construction: The revised regulations, which took effect January 1, require employers to have a competent person conduct an initial survey of confined spaces at the time work begins. Employers are also required to have a competent person inspect the work area with sufficient frequency to effectively identify new confined spaces. Employers must inform their employees and the controlling contractor of each new confined space discovered or created because of demolition activity. The revised regulations also have updated definitions for “entry employer,” “hazardous atmosphere,” “lockout,” “tagout,” and “minimum explosive concentration.”
• Diving Operations: The California Department of Industrial Relations’ Occupational Safety and Health Standards Board (OSHSB) initiated this rulemaking in response to discussions with the Occupational Safety and Health Administration (OSHA) to ensure that California regulations are at least as effective as the federal requirements in 29 CFR 1910.401 through 29 CFR 1910.422. The amended regulations more closely mirror the corresponding federal requirements but are not expected to impose new requirements on affected stakeholders. The revised regulations introduce a new definition of “controlled environment,” modify the definition of “film and TV diving,” and delete the definition of “technical diving.” Additionally, the requirements for film and TV diving have been modified to incorporate certain practices for teams working in controlled environments, performing film and TV diving, where line-tending is unnecessary. Per OSHSB, these practices are current industry practices.

Rulemaking Developments to Watch in 2026

The following rulemakings are under active consideration by the OSHSB in 2026:

• Process Safety Management for Petroleum Refineries: OSHSB proposed to amend the California Process Safety Management (PSM) standard specific to petroleum refineries that was adopted in 2017. The proposed amendments would clarify (i) the definitions of “highly hazardous material,” “major change,” and “employee representative;” (ii) requirements relating to the Hierarchy of Hazard Control Analysis; and (iii) how employers will allow for effective participation by employees engaged in PSM activities.
• First Aid: The proposal would implement changes to California Code of Regulations (CCR) title 8 – section 1512 Emergency Medical Services (which applies to Construction), and section 3400 Medical Services and First Aid (which applies to General Industry). The proposed revisions to section 1512 (i) require that employers check the contents of first aid kits before being sent out on each job, and at least weekly on each job; (ii) provide that all employees shall have ready access to a first aid kit and that the location of each first-aid kit shall be clearly indicated; and (iii) provide employers with the option of consulting with other licensed health care professionals (and not only physicians) as to the contents of first aid kits, and as an alternative to such consultation, employers may conform with the requirements of a table included in the proposed rule. The proposed revisions to section 3400 (i) similar to the proposed amendments to section 1512, require ready access and indication of location of first aid kits; (ii) provide employers with the option of consulting with a licensed health care professional as to the contents of first aid kits, or complying with a table contained in the proposed rules; and (iii) provide that based on location of employees and types of hazards, employers shall evaluate the need for, and provide additional first aid supplies.

OSHSB held public hearings for both rulemakings on January 15, 2026, and B&D continues to monitor further developments.

Hazardous Waste

2025 Draft Hazardous Waste Management Plan from DTSC

The Board of Environmental Safety, on November 17, 2025, voted 4-1 to approve DTSC’s 2025 Hazardous Waste Management Plan (the Plan). As required by California Health and Safety Code section 25135, the Plan serves as a comprehensive planning document for the management of hazardous waste, an informational source to guide state and local hazardous waste management efforts, and a guide for DTSC’s implementation of its hazardous waste management program.

The Plan, the first of its kind published pursuant to section 25135, includes three goals (down from the ten goals DTSC initially proposed) intended to act as high-level priorities and recommendations for the implementation of DTSC’s hazardous waste management program over the next two years:

• Goal 1: Reduce hazardous waste generation and divert hazardous waste away from incineration or landfilling.
• Goal 2: Ensure hazardous waste identification and management standards are scientifically sound, health protective, and environmentally safe.
• Goal 3: Use data and resources to promote sustainable and health-protective management from cradle to grave.

Of the three goals, Goal 2 and 3’s recommendations have the most potential to change DTSC’s hazardous waste management program at a fundamental level. Goal 2’s recommendations include ten strategies to pursue statutory or regulatory changes that ensure hazardous waste is appropriately identified and managed for ignitability, corrosivity, and reactivity, while continuing research on toxicity criteria. Of particular note is DTSC’s commitment to evaluate:

• The acute aquatic bioassay and comparable methods used in other states or nations to assess its effectiveness in determining aquatic toxicity;
• The waste extraction test (WET) and other leachability tests used globally to assess effectiveness at determining how soluble constituents in waste leach in a landfill; and,
• Contaminants of emerging concern, such as per- and polyfluoroalkyl substances (PFAS), including determining whether such substances meet the criteria for hazardous waste under federal and state regulation.

Goal 3’s recommendations include 10 strategies to improve the data that underpin DTSC’s hazardous waste management framework to inform continuous planning efforts. Of note is DTSC’s commitment to:

• Adopt regulations to update California Waste Codes 611 (Contaminated soil from site clean-ups) and 181 (Other inorganic solid waste) to identify the inorganic hazardous constituents that cause the waste to be identified as hazardous;
• Work with manufacturers, retailers, regulatory agencies, and other groups to analyze end-of-life lithium-ion batteries and end-of-life solar panels to determine California's readiness to manage alternative energy waste streams; and,
• Amend reporting requirements for universal waste photovoltaic modules to require reporting in weight only, instead of count or weight, and evaluate reporting requirements for universal waste electronic devices.

The Plan does not include the recommendation originally proposed in the draft version of the Plan directing DTSC to identify and evaluate alternative management standards that would have allowed for the disposal of non-Resource Conservation and Recovery Act soil identified as hazardous solely because it exceeds the Soluble Threshold Limit Concentrations based on WET (not total concentration) for inorganic substances (as defined in California Code of Regulations, title 22, section 66261.24 Table II) in landfills that include a composite liner system and comply with the California State Water Resources and Control Board and CalRecycle requirements. This recommendation drew particular scrutiny from industry and environmental groups alike.

For the next two years, until DTSC’s next Hazardous Waste Management Plan is due in March 2028, industry should expect new regulations aimed at implementing the goals and recommendations outlined in the Plan. Regulated entities in the state should closely monitor any such developments and assess their impacts.

State Regulation in Light of Federal Rollbacks / California Attorney General (AG)’s Enforcement Initiatives

The AG’s office continued to pursue environmental enforcement as both a consumer-protection and EJ priority, with an emphasis on plastics pollution and “green” marketing claims. The AG has also been aggressive in using litigation to challenge a range of Trump administration energy, infrastructure, and grant-termination actions with direct implications for state climate and resilience programs.

Plastics

With respect to plastics, the AG concluded a statewide investigation into the recyclability of plastic carryout bags sold in California, announcing a settlement with four manufacturers requiring them to stop selling plastic carryout bags in California and pay $1.753 million, while also filing suit against additional bag manufacturers over alleged deceptive recyclability claims under California law.

Clean-Energy Transition

At the federal level, the AG brought or joined cases challenging Trump administration actions affecting the clean-energy transition, including litigation over efforts to freeze wind energy development, a lawsuit challenging the President’s “National Energy Emergency” executive order and related permitting directives, and a coalition suit contesting the federal government’s attempt to withhold EV infrastructure funds appropriated by Congress. As noted above, California also led a coalition lawsuit challenging the federal government’s use of the CRA to attack California’s Clean Air Act waivers and clean vehicles program.

The AG also targeted the termination or curtailment of major resilience and climate-equity funding streams, including challenges to the Federal Emergency Management Agency’s termination of the Building Resilient Infrastructure and Communities (BRIC) disaster-mitigation grant program, DOE’s policy imposing a funding/reimbursement cap for state energy programs, and EPA’s termination of the $7 billion “Solar for All” program. The office also filed an amicus brief opposing EPA’s termination of the Environmental and Climate Justice Block Grant program, joined multistate letters opposing proposed changes to PFAS reporting under the Toxic Substances Control Act and urging Congress to block legislation limiting EPA’s Integrated Risk Information System science program, and intervening to defend EPA’s 2024 chemical accident safety rule.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.