2025 Laws

The New Year is Almost Here

As we usher in 2025, California continues to push the nation with forward-thinking environmental legislation. While many new laws reflect the State’s commitment to innovation and resilience, they are also likely to impact businesses across various industries. From stricter rules on materials and substances to enhanced transparency requirements, these changes demand careful attention from both regulators and the regulated community.

The PFAS Bill: Assembly Bill No. 1817

Assembly Bill No. 1817 (“AB 1817”) prohibits manufacturing, distributing, selling, or offering for sale, in California any new textile articles that contain regulated perfluoroalkyl and poly-fluoroalkyl substances (“PFAS”). There are limited exceptions to the prohibition. For example, the deadline is extended for outdoor apparel for severe wet conditions, but the products must include a disclosure stating “Made with PFAS chemicals” starting January 1, 2025. And while there are exceptions, AB 1817 will significantly impact a wide swath of industries. The prohibition applies to common items like apparel and backpacks, but it also will affect businesses involved in making, distributing, and selling accessories, handbags, draperies, and upholstery.  Compliance with AB 1817 requires that in lieu of using PFAS in their products, manufacturers use the least toxic alternatives available, including alternative designs, to ensure consumer safety and environmental protection.

AB 1817’s reach is not limited to just eliminating certain types of goods. Manufacturers must also provide a certificate of compliance to retailers and distributors, affirming that their textile articles meet the new regulations and do not contain regulated PFAS. Retailers and distributors who do business with those manufacturers and rely in good faith on the compliance certificates are protected from liability under this law. 

To prepare for these changes, businesses impacted by AB 1817 should assess their current inventory to identify products containing PFAS and phase them out immediately. For outdoor apparel designed for severe wet conditions, businesses should ensure they have proper labeling and develop a strategy to meet the 2028 compliance date.

The Pesticide Bill: Assembly Bill No. 363

Assembly Bill No. 363 (“AB 363”) prohibits the sale, possession, or use of a pesticide containing one or more neonicotinoid pesticides for any nonagricultural use or on nonproduction ornamental plants, trees, or turf outside of limited exceptions. These types of pesticides are important to control harmful insects but also hurt human health and the environment. Effective January 1, 2025, this ban aims to protect pollinators and the environment from the harmful effects of neonicotinoids.

AB 363 requires the Department of Pesticide Regulation to evaluate the impacts of neonicotinoid use and nonagricultural settings and adopt necessary control measures. These measures must include a robust enforcement plan, which is likely to involve state-mandated local programs to ensure compliance.

Businesses should review current pesticide stocks to identify and properly dispose of products containing neonicotinoids intended for nonagricultural use before the January 1, 2025, deadline.

Oil and Gas Production Bill: Assembly Bill No. 218

Assembly Bill No. 218 (“AB 218”) establishes new requirements for oil and gas production facilities or wells located within health protection zones. A health protection zone is the area within 3,200 feet of a sensitive receptor, any place where people may be more vulnerable to adverse health effects such as homes, hospitals, and schools. These areas are protected to safeguard those in them from the risks associated with oil and gas production.

Prior law mandated compliance with specific health and safety laws and submission of a leak detection and response plan by January 1, 2025, but AB 218 extends the timeline. Under AB 218, operators must prepare and submit a sensitive receptor inventory and site map to the Geologic Energy Management Division at the Department of Conservation (“CalGEM”) by July 1, 2025. The leak detection and response plan is not required until July 1, 2028. Additionally, compliance with health and safety requirements will be required starting July 1, 2026.

Businesses should ensure all necessary documentation, including the sensitive receptor inventories and maps, are prepared and submitted well ahead of the July 2025 deadline. To avoid delays, businesses should also stay informed of upcoming deadlines, including the full health and safety compliance in 2026 and the leak and detection plans submission in 2028.

CEQA Changes: Assembly Bill No. 356 and Senate Bill No. 69

Assembly Bill No. 356 (“AB 356”) and Senate Bill No. 69 (“SB 69”) introduce minor changes to the California Environmental Quality Act (“CEQA”). While these changes mainly affect lead agencies, they are important for navigating the CEQA process.

AB 356 extends the deadline to evaluate the aesthetic effects of projects involving refurbishment, conversion, or replacement of existing buildings. This applies to buildings specifically defined as exempt by CEQA and refers to the visual impacts of a project. Previously set to expire in 2024, the provision is now in effect until January 1, 2029. Lead agencies must file a notice with the Governor’s Office of Planning and Research and the county clerk if it determines that evaluating aesthetic effects is not required and the project will be approved. This extension adds new duties to lead agencies, creating a state-mandated local program.

SB 69 requires lead agencies approving CEQA projects to file a notice of determination, including amendments or updates, on the county clerk’s website and the State Clearinghouse’s website within 24 hours of a decision. 

Businesses should stay up to date on any deadlines for evaluating aesthetic effects and the lead agency’s filing of necessary notices to ensure their project is being properly evaluated.

Climate Transparency Bills: Senate Bills 253 and 261

Senate Bill 253 (“SB 253”) and Senate Bill 261 (“SB 261”) introduce new requirements aimed at promoting transparency and accountability in climate and financial reporting for big businesses. 

SB 253 requires companies with annual revenue exceeding $1 billion who operate in California to publicly report their scope 1, scope 2, and scope 3 emissions. Scope 1 refers to the direct emissions a company produces, scope 2 refers to the indirect emissions a company produces, and scope 3 refers to the scope 1 and scope 2 emissions of the company’s supply chain. These disclosures will be required annually beginning on January 1, 2026, based on the company's 2025 scope 1 data. In 2026, emissions from scope 2 data must also be included, and in 2027, scope 3 data emissions. These bills seek to provide the public and government agencies a clear view of how individual businesses are impacting the environment.

Businesses will need to submit these reports to the California Air Resources Board (“CARB”) and ensure they are accessible to the public. CARB will publish reporting locations and further regulations to implement this process by July 2025. 

SB 261 requires companies with annual revenue over $500M doing business in California to provide climate-related financial risk reports detailing the physical and transition threats they face as a result of climate change. In addition, companies must report and explain the measures they take to mitigate and adapt to these risks. The first round of disclosures will be due by January 1, 2026, and will be reviewed by the Climate-Related Risk Disclosure Advisory Group.

Businesses should ensure they are keeping up to date on their data and climate change risks to be able to meet the deadlines. 

Climate Bond: Proposition 4

Proposition 4, approved by California voters on the November 2024 ballot, is a $10 billion investment by the State into climate mitigation and resiliency projects. This money will be spread across general obligation bonds for water, wildlife prevention, and the protection of communities and lands in the State. The bill intends to address the most urgent climate needs of California before it’s too late for the State to act. 

Be Ready For What’s Next in 2025

While the New Year always brings focus to our personal goals and resolutions, businesses need to stay on top of new state laws. By accessing compliance requirements and implementing strategies early, companies can avoid penalties, reduce disruptions, and position themselves for long-term success in an increasingly regulated landscape. Staying informed and proactive is the easiest way to ensure 2025 is a very successful year.