Year in Review: Key Energy Bills from 2025 Legislative Session
California passed hundreds of bills that address climate, energy affordability, and other environmental issues during the 2025 legislative session. The following is a review of the key energy and climate laws passed during 2025.
Streamline CEDQ requirements for oil production
SB 237 streamlines compliance with the California Environmental Quality Act (CEQA) for certain oil and gas permitting activities in Kern County by relying on a countywide environmental impact report, resolving long-running litigation. The bill also increases oversight of offshore drilling and authorizes temporary suspension of summer gasoline blend requirements under specified price-spike conditions.”
Extend cap and trade
AB 1207 extends California’s cap-and-trade program, now called “cap-and-invest,” through 2045. The bill also changes how the California Air Resources Board (CARB) distributes allowances.
Cap and trade revenue allocation
SB 840 revises spending from the program’s revenue, including $1 billion for high-speed rail each year, $1 billion for spending through the budget, and $1.7 billion for various safe drinking water, fire prevention, transportation, and clean air programs.
State wildfire liability fund
SB 254 strengthens and expands financing mechanisms for the state wildfire liability framework and updates utility wildfire mitigation planning requirements. The bill, among other things, requires electrical utilities to submit a wildfire mitigation plan to the office for review at least once every four years.
Western regional electricity market
AB 825 allows California to participate in a Western regional electricity market by expanding partnerships with other states. This law provides the groundwork for developing a Western market and is intended to promote the inter-state trading of solar and wind power. The bill is intended to reduce electricity costs, improve grid reliability, and increase the use of renewable energy.
CEQA reform
AB 130 and SB 131 are part of CEFA reform that is intended to make it easier to build new homes in the state by easing environmental review requirements. The legislation that includes a six-year pause on updates to residential building standards statewide that could include restricts on natural gas in new construction.
Sale of E15 gasoline
AB 30 authorizes the temporary sale of E15 gasoline in California while CARB evaluates its impacts on air quality and emissions standards.”
Battery storage safety
SB 283 regulates battery energy storage systems (BESS) by requiring developers to confer with the local fire authority about fire-prevention designs. This is required before operations can begin.
Air pollution monitoring programs
SB 352 establishes air pollution monitoring programs in heavily polluted communities. The law requires CARB to select the locations, and the program must be in place for at least five years with optional five-year extensions.
CEQA exemption for climate disclosures
AB 154 provides an exemption from CEQA for certain regulations adopted to implement climate disclosure and accountability rules.
Carbon dioxide pipelines
SB 614 lifts the state’s 2022 moratorium on carbon dioxide pipelines. It authorizes and regulates the development of carbon dioxide pipelines and carbon management infrastructure, enabling carbon capture and sequestration projects.
Restricting rate recovery for political activities
AB 1167 restricts how investor-owned electric and gas utilities can recover certain expenses through customer rates