If you’ve been following the development of CDR policy, you’ve probably heard of the volunteer advocacy group OpenAir Collective. Just a few weeks ago our guest Sebastian Manhart said on this show “There’s no state that has policy movement that OpenAir collective didn’t have their fingers all over. I’m really impressed by the results of this kind of grassroots activism."
Now, OpenAir is working to pass SB308 in the U.S.’s largest economy: California. This proposed bill mandates that high-emitting facilities purchase "negative emissions credits" to offset their climate impact. It would be the first state-level legislation to create a compliance mechanism carbon removal.
This legislation makes polluters pay to remove CO2, a statewide public-sector source of funds that would have a catalytic effect on the CDR industry.
On this episode we’re joined by one of the founders of OpenAir, a leader of the advocacy effort in California, and the Director of Initiatives at Rethinking Removals: Chris Neidl.
Chris will help us understand the workings of SB308, its potential contribution towards California's climate targets, and share his personal experiences advocating for this important legislation.
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Full Transcript
Announcer: You’re listening to Carbon Removal Newsroom, a weekly show about current events in the world of carbon removal, from technology and innovation to policymaking and job growth. Brought to you by Nori, the carbon removal marketplace.
Radhika Moolgavkar: Hello, everybody, and welcome to a special episode of Carbon Removal Newsroom. If you’ve been following the development of CDR policy, you’ve definitely heard of the volunteer advocacy group called Open Air Collective. Just a few weeks ago, our guest Sebastian Manhart said on the show that there’s no state that has policy movement that Open Air Collective didn’t have their fingers all over. I’m really impressed by the results of this kind of grassroots activism. Today, open air is working to pass SB 308 in the US’s largest economy, California. This proposed bill mandates that high emitting facilities purchase negative emission credits to offset their climate impact.
It would be the first state level legislation to create a compliance mechanism for carbon removal. This legislation makes players pay to remove carbon dioxide A statewide public sector source of funds that would have a catalytic effect on the CDR industry. So today we’re joined by Chris Neidl, one of the open air founders and a leader in the advocacy effort in California. And we are going to ask him all about SB308 and how it moves the CDR industry forward and California forward too. So Chris, let’s just start by a quick overview of SB308 and what it is and how it works.
Chris Neidl: Yeah, sure, and thank you so much for having me, and those are very kind words from Sebastian. He’s doing great work. Yeah, so SB308 is just really, really significant for reasons that you just summarized. You know, we’re moving into a point now where we’re starting to see CDR really show up in very specific and concrete ways in policy discussions around the world, certainly in North America at the federal and state level, but also in Europe. But now we have to see real serious policies put in place that are going to really drive deployment.
And so California has really a defining role to play in leading that, not just in developing model policy, but as the fifth largest economy in the world, I think, certainly the largest economy in the United States. What it does doesn’t only set the bar high, but it really would really create a real catalyst for CDR that would be felt around the world. So that’s why we’re really, really excited about this bill, which was introduced earlier this year by Senator Josh Becker, who represents a good chunk of Silicon Valley. He is a real climate hawk, and he’d be a great person to have on the show at some point.
And he really gets technology. And so he was a kind of leader who gravitated towards this, really did his research, his staff was great. And they thought, let’s put together a policy that’s really commensurate with the challenge here and what we have to do and put California in a leadership position. And I think another significant part of the bill too, given not only the state, but his district is that he knows that California already is head and shoulders above anywhere else in the world in terms of creating an ecosystem For CDR, you know, it’s by far the largest concentration, not only of startups, but also of major players that are, you know, defining what it means to buy carbon removal, like Stripe, Frontier and all of its members.
And so he really sees not only the climate necessity of it, but he sees the opportunity that CDR really has for California’s economy and that we can, you know, California can really rule the day on this. So the bill in its structure really reflects, I think, those two priorities. And what it does, as you said, You know, there’s been proposals that have been put forward that are, you know, commitments to carbon dioxide removal, such as Finland, you know, making sort of a broad commitment to that by law. There have been other great policies, like ones that Open Air is working on, like the Massachusetts Carbon Dioxide Removal Leadership Act, which is a procurement policy where the state would buy CDR and ramp that up over time.
But this is really a category of policy that we haven’t seen yet, and that’s compliance. And in order for CDR to scale, The level of purchasing that has to happen, it really does have to be tied to emitters. And so what this bill does, starting in 2028, it creates an obligation where high emitting facilities in California would have to start buying CDR independent of cap and trade. Again, that’s a whole other win with this bill is it properly categorizes carbon removals as a separate thing for mitigation. So that’s already... Good Policy and then it would ramp it up over time between 2020 and 2045 because it parks this bill right in California’s existing net zero obligation, which was already passed into law.
Last year, I believe, and so it what it does is it takes that 15% of what California needs to do to get to net zero they can’t be mitigation. And rather than having that be offsets or something else that’s undefined, it says, well, the best, most net zero line way to do that is carbon removal. So it’s actually adding carbon dioxide removal into the broader net zero picture of California. And that’s massive. That’s a really, really important policy move. And that’s a really high magnitude move in terms of an actual, you know, catalyzing CDR.
So there’s more details to it, but I’ll pause there for a second in case you had any questions.
Radhika Moolgavkar: Yeah, I mean, I have a ton of questions, but let’s just start with something maybe that is hopefully a little zoomed out and hopefully not basic, but is this, do you think, The type of policy that can be replicated across the United States, if I’m sure you follow like Washington State this I think a year ago sort of passed their own version of cap and trade in sort of as a follow on to what California did. Do you see other states being able to adopt this policy relatively easily or is it something that’s very specific to California.
Chris Neidl: It’s not specific to California. I do think that the basic mechanics of this are highly replicable. In fact, I would call it model policy. Again, I love the procurement model that Massachusetts is pursuing. That’s a separate conversation we could have in the fall maybe. But I think there’s a couple of conditions that probably really help sort of force the issue of a policy like this or really create space for it. And then one is net zero. So if you’ve really committed to that, You know, you’re going to look at the math of that and you’re going to say, not all of that can be done in a, you know, climate meaningful timeframe.
It can’t all be mitigation, you know, there has to be removals. And so if you already have that net zero commitment, that then sort of, I think, creates the sort of the foundation for proposing A bill like this. And there are other states that have that. I think Washington, for instance, we just had a win in Washington that was led by an amazing group of advocates there to include greenhouse gas removal as an eligible technology category for grants. And they have the similar type of background regulations that could make something like an SB308 really work there.
I think places like California, or rather New York, certainly, which was the first to have a net zero commitment, could definitely do it. And as more states start to reach those other levels where they have a more significant obligations, you could see something that looks like SB308 pop up, not only in the United States, but I think people are talking about it in Europe as well. So the basic formula there, I think, is highly replicable.
Radhika Moolgavkar: Cool. And then maybe pulling back to the history, Obviously, you mentioned Senator Becker, I believe, and his interests, but how was this legislation developed? Was it something that open air went and pitched to him? Or was it something you worked on together? How did you get and mobilize? Because it’s a big process. It’s not something you do overnight.
Chris Neidl: Yeah, it almost goes back two years. And open air, one of the things we pride ourselves on is our members write our own legislation. So we tend to go and Pitch whole bills after a policy development process that we’ve sort of organically developed over the years. This is not what happened in California. This really, the actual policy design, we read it early and we gave input, but the policy design was actually generated by Senator Becker’s team, particularly by his climate policy director, Ken Branson, who big shout out to him, extremely knowledgeable and serious about this subject and really put in the work.
What it did, though, historically, where open air did come in is it goes back to Glasgow for COP26. And Senator Becker was there at the conference. And we managed to kind of smuggle him into a carbon dioxide removal event that had also the leading lights because he was interested in it at a very high level. And when he walked in the door, the first person he bumped into was like Jen Wilcox. And then he was able to speak to all sorts of people and sit down and hear an amazing panel.
And I think that’s where the wheels started really turning for him. And then we held a roundtable about a month later with different CDR experts and some local CDR companies to sort of talk through and almost kind of do an ask me anything for him and his staff as well as some other members of the legislature and Ken Branson was on that call. And he really was like, huh, okay. And then so it was a real process of talking through when is the timing right? What is the approach? And they looked at all sorts of models.
And I think it’s really to his credit, there’s always a temptation to do what we call study bills, where legislators can say, we want our name associated with something, let’s do the easiest thing possible. What Senator Becker did and Ken did is they said, no, let’s take this really seriously. Let’s do something seriously and really define what good policy looks like. And that’s exactly what they did. And then after several months of writing and revisions, they introduced it back in February.
Radhika Moolgavkar: So when you’re thinking about how the legislation was drafted, California has a complicated political dynamic. And so did you see that impact, how the legislation was drafted or how it has been accepted? And what are sort of the community equity provisions and Yeah, absolutely.
Chris Neidl: I mean, I think that one of the things that’s really smart about this bill, which reflects both a realistic sense of where the sector is right now, but also not wanting to rush things, wanting to make sure that this is a consultative process, which there’s already laws in place that sort of dictate that there has to be consultation like this. But CARB, which would be the agency that would be responsible for administering this, it gives a five-year period basically to come up with how do we categorize good CDR policy? How do we make sure that we have the best standards in place so that we can measure that with security and certainty?
And core to that as a principle is we want to make sure that we have consultation from as many different groups, including You know, frontline communities in California to help co-create that definition. So I think that giving that five-year period is both smart from a market development perspective, but also for making sure that we can get everybody on board and we’re not rushing this. So I’d say that is one of the sort of, you know, key elements of the bill that I think reflects a real wisdom and sensitivity to making sure that a lot of people are involved.
I think one of the things that is great about this bill as well We have to be clear, carbon dioxide removal can go many different ways, and it’s really up to the Californians, the Washingtons, the New Yorks, the Massachusetts to define a pathway for carbon dioxide removal that is pro-community, that really emphasizes co-benefits, and that is not just an appendage of oil and gas, which is where we will see in other certain states that won’t be named. And so I think what there’s also in California is a, or in the bill is a direct exclusion of enhanced oil recovery, you know, can’t, isn’t eligible, you know, which is a really, really important thing, which would work at cross purposes from our decarbonization goals.
So, And I think the other thing that’s worth saying too is that the office has been really open and receptive to listening and has made changes to the bill as we’ve gone along as it’s gotten input from other key stakeholders. So I think they’ve dealt with it really in an excellent way. I give them an A plus in terms of how they’ve approached it.
Radhika Moolgavkar: It’s rare to hear government being given an A plus, so good job, California. And then my final question just about maybe the text of the bill itself is, does the legislation mandate that facilities purchase CDR credits from within California, or will that type of process be part of the administrative rulemaking later on, which I assume will have to happen?
Chris Neidl: Yeah, for this type of bill, they can’t do that legally. If you’re requiring a private entity to make those purchases, you can’t dictate entirely that it would be in California. But there is a clause in there, which I know was taken really from other precedents, where at least 50% of the purchases have to have significant direct benefits to California, which all but sort of Forces it that there will be significant project development in California. But that being said, it’s worth stressing that California is gifted with every possible resource you could possibly want to do carbon removal and storage, both from a natural resource perspective, we have enormous storage potential, as well as all of these companies that are forming in California.
So just for economic and project reasons, it’s likely that there would be a lot of project development in California with or without that clause.
Radhika Moolgavkar: Yeah, I read the bill and I’m like, oh, that definitely sounds like some sort of compromise or precedent language, as you said. So let’s talk a little bit about some of the political dynamics within California that I think probably are representative of the broader political dynamics within CDR. So as the bill was proposed, as it’s been going through the various reviews, What kind of forces have been in support and who has been less favorable towards it?
Chris Neidl: Yeah, so our coalition, which continues to grow, you know, we’re adding other organizations and recirculating our memo of support to members of the legislature on a regular basis that grows, definitely has strong representation. And this is what we want to put on our sleeve here is that I think there’s 18 different CDR startups all based in California that are on there. We want to show the industry through this bill and through our advocacy. We’re also really, really pleased to have Climate Action California. We have a few local 350 groups that are on there.
The Rocky Mountain Institute was an early national, highly influential sustainability advocacy and research group joined. And so we’re continuously working to try to expand We’re in dialogue with different labor groups. Right now, there’s a huge opportunity for labor and job creation with this. A lot of CDR is about building, installing, operating, and fixing things. That’s an ongoing conversation that we want to have to see if we can expand our coalition to include labor. We think it’s a good... Variety that we’re seeing there and again it continues to grow on the on the opposition side oil and gas, you know formally came out against it.
The Chamber of Commerce also has come out against it, and then we have you know some environmental justice groups have also raised objections to it as well, so. That so far is what we’re looking at as opposition. We’re not seeing really strenuous campaigning against the bill, which is a different thing altogether. There is some coming from oil and gas and from the chamber, but from our fellow travelers in the broader climate movement, we haven’t seen very, very strong opposition beyond certain statements of opposition.
Radhika Moolgavkar: And as to oil and gas and the chamber, What are their main objections? We’ve talked a lot actually on the show about the various fractures within the environmental justice movement on CDR, but curious what the chamber and oil and gas are highlighting as issues in this bill.
Chris Neidl: Yeah, I think some of these are reflexive that we see anywhere. You go to literally anywhere and these are the two that you would expect to be arrayed against it. They’re different though. I don’t want to throw them in the same bucket. I think that As the CDR sector starts to grow and many more CDR companies become members of the chamber, the tune on that will change. But the oil and gas one is an obvious one, and it’s as long as climate advocacy itself is that it’s perceived as something that is penalizing oil and gas, and they’re going to resist it.
They think it’s going to affect their bottom line. The chamber as well, you’ll see flavors of that argument as well, and You know, concerns that it’s going to, you know, price businesses out from California where we think it’s certainly in the mid to long term is going to be an economic, you know, boom for California. So those are the arguments. We’re not sure how close they’ve read it. You know, I think that there is just sort of a reflexive tendency to push back against these types of bills that aren’t particular to CDR per se, but more have to do with sustainability and clean energy initiatives.
Radhika Moolgavkar: Yeah, I find the chamber one the most interesting because to your point, It’s meant to grow business. And so I find that a little bit strange. But to move on, what has been the response from most lawmakers? And obviously you gave a special thanks to Senator Becker, but are there others who have been part of the process that you’d like to highlight?
Chris Neidl: Well, I think we were really pleased that the bill passed pretty handily in the Senate, you know, so that was a huge victory. It’s the first time a bill of this kind has not only been proposed, but it actually made it through one of the chambers. So that was last month, and that was a huge victory for us. And so we heard a lot of great questions during the hearing in our citizen advocacy, a lot of smart questions and follow-up, and there seemed to be, you know, they got it. And so that passed.
As we’re in the assembly right now, it’s an educational process. As you guys know, as a lot of people don’t know, we’re talking to staffers. They definitionally, some things they haven’t quite gotten up to speed on, the difference between carbon removal and CDR and things like this. And so we are doing citizen lobbying engagement with members of the assembly right now. Which we’ve been impressed by. These have been really good questions. We’ve been able to stay on the phone with people for a long time, bring constituents on. So we haven’t really seen, we haven’t been disappointed at this level, but it all comes down to whether they vote yes.
So we have some key dates coming up. We have a hearing that’s coming up in a couple of weeks that so we’ve been focusing a lot on members of the assembly natural resources committee. we’ve had a number of citizen lobbying meetings, but we need more of them, and we need way more phone calls going into those members right now in order to push it to the next phase. In August, where it will go through appropriations, then we make it through there we’re looking at a floor vote at the end of the month or early September.
Radhika Moolgavkar: Wow, things are moving. So before we leave sort of the political dynamics, one thing that I am personally curious about is within California and I think within the larger environmental movement, there’s sort of this push-pull around permitting reform, right? Because obviously you need to have quick permits for, or not obviously, but it’s preferred to get your business up and running. Flip side is these reforms and stuff cause people anxiety because they could allow nefarious actors to act more nefariously, if you will. And I know that Gavin Newsom right now has provided the governor of California has, you know, asked for some modest permitting reform that has caused a lot of angst within the government.
State so curious if you’ve heard anything about the permits required for scaling CDR and how those two things in your mind will interact as this legislation moves forward, if at all.
Chris Neidl: Well, I think this bill does kind of force the issue a little bit on that right so you’re exactly right that. And there’s so I come from solar and I spent 15 years in solar before I came over and a lot of advocates and the general public don’t understand. Until they try to buy solar, that a lot of the problem with it is permitting related. Whether you’re talking about residential or commercial rooftop or utility scale, it’s a boring subject, but it is so pivotal to whether or not these things actually happening.
So creating that kind of a conducive environment for permitting for CDR is going to be absolutely critical. And we hope that the passage of a bill like this really forces that issue. And unlike solar, we’re not just talking about internet connection to the grid and You know, fire codes and things like that. You’re talking about a vast array of entirely, utterly different forms of carbon removal that take place on ocean and land, and some are, you know, working lands based, some are, you know, quote unquote engineered, and all of those have their own permitting requirements.
So it definitely is a daunting task. I don’t think California is acting alone because we know the federal leadership that’s already happening on this is, you know, helping to accelerate things and certainly things like DAC hubs when it comes to that will be pushing the ball forward by the time this bill would actually be implemented, you But you’re exactly right. There has to be a lot of reform and understanding. And the key thing is not to shoehorn CDR into some other area of regulation that it most resembles, which we’re seeing in some areas.
You have to look at each technology in its own right, and you have to regulate around that. And you’re right, it should be speedy, but it can’t be too speedy. And this is the thing that the industry, I think, would be the first to say when you look at other industries that you can get a black eye. You want to make sure that regulations are transparent, fair, robust, fact-based, and amendable over time, and that protect the public good as well as this nascent sector. So a lot of work is going to have to go into that.
And again, we think a bill like this sort of forces the issue on those forms of performance.
Radhika Moolgavkar: All right, well, moving on to our last topic, which is kind of the status of the legislation. I think you did give us sort of the status, but really quickly, can you recap the next steps of the process so people who are listening and might not be as familiar can hear it one more time?
Chris Neidl: Yeah, absolutely. So right now, again, we landed in La Salle, I think about six weeks ago, rather in the assembly, and we are Teeing up for our first hearing, which is the it’s gone to the Natural Resources Committee in the Assembly, chaired by Assemblymember Luz Rivas. And that is going to be on July 10th. So we’re just about a couple of weeks out from that. And so right now, what we’re really focusing on is educating those members and getting constituents to engage by phone calls and also joining citizen lobbying meetings to talk with us.
And we can bring companies on that might be in the district So that we’re able to actually present that there’s constituent will behind this bill, but to inform them. So it’s a kind of a one-two education plus a real direct ask for co-sponsorship of the bill. So that is laser focused. That’s what we’re focused on right now for the next two weeks. And hopefully we can include in the show notes, we’ve developed a call tool at Open Air Collective, which makes that easy for people. As well as a form that if you want to sign up to be on a citizen lobbying meeting at Zoom, usually 20 minutes long, you can join other open air members to directly talk to your assembly members.
I can’t overstate how important it is. That’s the only way this bill is going to pass. It’s the only way that we’re going to be able to sort of push back against opposition from oil and gas and Chamber and other actors. So I highly encourage people to do that. If we do get through natural resources, then there’s a recess that happens in July, and then we’ll be doing a lot of citizen lobbying to broader membership. And then it’s going to go into at some point in August, it would go into appropriations because there is a fiscal impact associated with this bill.
So that has to. So we’ll be doing the exact same thing, targeting those members and pushing and pushing. And then if we do get through that, then at some point shortly thereafter, it will go to a general floor vote. And then we’ll just go ballistic that it’s just about really mobilizing every single You know, force or individual that’s in favor of this to make sure that it gets to the floor and that we get a yes vote. So we have a long and steep road ahead of us. I’m not lying.
You know, the odds are probably a bit against this. But if we push, we can pass this bill. And that would be a defining moment globally for carbon dioxide removal.
Radhika Moolgavkar: Okay, so if I heard you correctly, the call to action for any of our listeners, we will put into the show notes, but you have easy ways for them to join the Open Air Collective’s work on this, and really it’s about pushing, doing the grassroots advocacy, right? Pushing the legislators to do the right thing on this bill and say yes.
Chris Neidl: That’s right. And the one other thing I could add is that if you want to join our coalition of support, your company, your organization, you know, we want to have that as diverse and broad as possible. So we can include the, you know, the Canva link to that. If you want to add your logo and your name to that, you know, by all means, do reach out to us. That’s a good summary.
Radhika Moolgavkar: And where should they reach out? What’s your website or what’s the best way?
Chris Neidl: Yeah, you can do openair. cc is there and there’s a join form. Probably don’t want to put my personal email in here, but inbox is crowded enough. But what we could do is in that form that we’ll add there for people who want to sign up to a citizen lobbying, sign up to that. We’ll see you in there and we’ll obviously engage with you after that and you can decide what role you want to play.
Radhika Moolgavkar: Then we’ll definitely drop it in the show notes too for people, but always good to hear it. All right, Chris, any last words that you want to pass on to our listeners? And my last question before you answer that is, assuming this all goes the way you plan, when does this go into effect? When would this bill become law?
Chris Neidl: Yeah, it would go into it. Well, then the governor has to support it, which that’s a whole other question that’s its own form of advocacy. Where we’ll be lobbying Governor Newsom directly, but there’s some time that elapses before he has to sign it. If it does go into law, then it would really be put into effect immediately. And then there’s a lot of setup, again, because we want to do this right, make sure that there’s a lot of conceptualization and standards that have to be developed on the carbon. Then it’s the scheduling of input and the rulemaking process, which again, we’ve given a long runway for that, but that would start at some point in the next year.
Radhika Moolgavkar: Perfect. And any last words?
Chris Neidl: Let’s get this done, California. I mean, the world is watching. There’s nothing even remotely comparable to it in the magnitude and the significance of what’s being proposed here. So get involved in any way you can. And let’s get it done in California, which is appropriate. This is where it should all start, right?
Radhika Moolgavkar: Cool. Well, thanks so much for your time, Chris. And best of luck on the passage of the bill.
Chris Neidl: Thank you so much.
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