The Consequences of Failing to Comply With CARB's Cap-and-Trade Program

Article written by John C. McCarron and Courtland C. Chillingworth of Downey Brand LLP

Prior articles have appropriately urged companies to prepare for the California Air Resources Board’s ("CARB") Cap-and-Trade program (AB 32) by evaluating projected annual greenhouse gas ("GHG") emissions and by negotiating with CARB for an appropriate number of emission credits (called "allowances"). The complicated and compounding consequences of failing to comply with AB 32’s emissions-allowance system can be financially onerous. This makes it imperative that companies acquire sufficient allowances at the outset.
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CLFP Capitol Day

CLFP held its Fourth Annual Capitol Day on June 20, 2012. The day was very successful and CLFP member companies had the opportunity to meet and converse with Legislators and legislative policy staff. This event gives member companies an opportunity to build relationships and educate policy-makers about the issues impacting the food processing industry.
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U.S. Senate Passes New Farm Bill

The U.S. Senate has passed a five-year farm bill that makes some changes, but does not overhaul federal farm policies. The bill provides for nearly $500 billion in spending over its five-year life, with about 80 percent of the spending devoted to the food stamp program. The bill includes $23 billion in budget cuts from current spending levels, including $4 billion in cuts in the food stamp program.
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CLFP Truck Weight Project Making Progress

CLFP is exploring the feasibility of launching an increased truck weight demonstration project. At this initial stage, support has been sought and obtained from three organizations as follows:
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2015: The Year Cap-and-Trade Costs Take a Toll

Over the past two years CLFP has been engaged in negotiations over specific aspects of California’s cap-and-trade regulation affecting food processors and the food processing industry. The program started on January 1, 2012, with an enforceable compliance obligation beginning with the 2013 greenhouse gas (GHG) emissions. In 2013, the cap-and-trade will require all facilities that emit more than 25,000 tons of CO2e annually to provide allowances for each ton of emissions during a three year period. If your facility emits more than 25,000 tons of CO2e annually you are subject to the AB 32’s cap-and-trade.
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Upcoming Events

Supplier Host Council Golf Tournament
October 15, 2012
Stockton Golf & Country Club, Stockton, CA

Food Processing School
February 4, 2013
Sheraton Grand Hotel, Sacramento, CA

CLFP Food Processing Expo (formerly the CLFP Expo & Showcase of Processed Foods)
February 5 & 6, 2013
Sacramento Convention Center, Sacramento, CA

 

Historical Tidbit

The California League of Food Processors (formerly the Canners League of California) was organized January 12, 1905, with thirty initial members.  L. F. Graham, head of the J. H. Flickinger Company, San Jose, was elected President.  In 1905 the total California fruit and vegetable pack was 4.5 million cases. Dues were $1.00 per firm per month, and to this was added a small income from specific projects.  Operations were continued on this small budget income for several years.