CARB’s proposed 2026 amendments to the Mandatory Reporting of GHG Emissions Regulation (MRR) would bring in-state biomass-derived fuel production facilities and importers of biomass fuels outside the bulk transfer/terminal system into the reporting program for the first time – and require LCFS pathway codes to be reported alongside MRR volumes. The Board took up the amendments at its May 28 hearing alongside the Cap-and-Invest package; OAL action is the remaining step before the new obligations take effect.
Background
California’s MRR has required electricity generators, industrial facilities, fuel suppliers, and electricity importers above 10,000 MT CO2e to report annual emissions since 2009, and it supplies the data backbone for the Cap-and-Invest Program. Trinity covered the proposed amendments in detail when they were released in January; this article focuses on the changes most relevant to fuel suppliers and the rulemaking’s status following the Board’s May 28, 2026 hearing. The proposal’s rationale is detailed in the ISOR staff report.
What the MRR Amendments Change
- Expanded point of regulation: In-state biomass-derived fuel production facilities and importers of biomass fuels supplying outside the bulk transfer/terminal system are brought into the reporting program.
- LCFS–MRR cross-reporting: Suppliers must report LCFS pathway codes alongside MRR volumes.
- Biorefinery parity: Biorefineries are covered at full parity with petroleum refineries regardless of emissions level.
- New product categories: New categories for renewable gasoline, biomass-derived LPG, and CARBOB/RBOB; ethanol suppliers must report fossil denaturant as RBOB using a user-defined value that defaults to 2%, which increases covered emissions.
- Verification streamlining: Site visits required every three years, with remote visits allowed for low-risk reporters. Six-year consecutive verification limit now applies to non-CARB verifications under the same scope as MRR, such as GHG verification for other states. More stringent COI requirements would be implemented for verification bodies to include LCFS consulting work.
- Single reporting entity: Multiple entities under common operational control must report as a single reporting entity.
- Exemption categories: New exemption categories to be added for fuel volumes excluded from emissions reporting.
- Broadened supplier definition: The fuel-supplier definition would be revised to include suppliers of imported LPG, biomass-derived natural gas (bio-NG), and hydrogen.
Cap-and-Invest: Adopted May 29, Effective September 1
The companion Cap-and-Invest amendments were adopted by the Board on May 29, 2026 (9–4 vote) and are expected to take effect September 1, 2026, pending OAL review. For fuel-sector clients, the key changes are: refinery product-based benchmarks transition from the complexity-weighted barrel to liquid hydrocarbon fuel and asphalt production data, changing industrial allocation calculations beginning 2027; updated 2027–2030 allowance allocations for electrical distribution utilities; and the formal renaming of the program from Cap-and-Trade to Cap-and-Invest under AB 1207, which also extended the program through 2045. Biorefineries newly covered under the parallel MRR rulemaking may simultaneously face new Cap-and-Invest compliance obligations.
What This Means by Segment
- Biomass-derived fuel producers and importers of biomass fuels outside the bulk transfer/terminal system: May be newly subject to MRR upon final rule – begin the compliance gap assessment now.
- Biorefineries: Covered unconditionally under the parity provision, and potentially facing Cap-and-Invest obligations in parallel.
- Ethanol suppliers: The denaturant change increases covered emissions.
- All LCFS pathway holders reporting under MRR: LCFS pathway codes must be reported for renewable fuel suppliers.
Action Checklist
- Determine whether your activities fall within the expanded MRR point of regulation.
- Ensure accurate fuel pathway code (FPC) tracking if importing renewable fuels.
- Ethanol suppliers: model the covered-emissions impact of the 2% denaturant default.
- Watch for OAL for final amendment implementation data.
Trinity’s Clean Fuels Practice provides MRR reporting, verification, and Cap-and-Invest compliance planning. If you would like to discuss the MRR amendments and how they may impact your operations, please email Alex Marcucci.
