AB 1704 directs the state board to produce a measurement framework and a statewide strategy for reducing greenhouse gas emissions embodied in building materials. The framework creates reporting obligations for both covered construction projects and material manufacturers and establishes the data foundation for a sector‑level reduction target.
The bill pairs mandatory data collection with compliance flexibilities: projects can rely on alternative compliance (including a possible embodied carbon trading system) and are excused from penalties if they document that lower‑carbon substitutes are infeasible or cause excessive cost impact. The proposal is designed to shape procurement, product disclosure, and design choices across California’s construction sector while creating new data and regulatory responsibilities for manufacturers, builders, and regulators.
At a Glance
What It Does
Requires the state board to develop (1) a framework for measuring average carbon intensity of construction materials and (2) a comprehensive strategy to achieve a net 40% reduction in building‑material greenhouse gas emissions. It mandates life‑cycle assessment submissions for covered projects and Environmental Product Declarations (Type III or equivalent) from manufacturers, establishes reporting/tracking, and authorizes alternative compliance pathways.
Who It Affects
Applies to entities building projects that meet size thresholds (multiunit residential or larger nonresidential projects), manufacturers of construction materials sold in California, architects and contractors who must produce LCAs, and state agencies involved in procurement and standard‑setting. It also implicates regulators who will write reporting and compliance regulations.
Why It Matters
This bill makes embodied carbon a regulated metric for many California projects for the first time, creating both market pressure for low‑carbon products and a public dataset of product carbon intensity. For procurement, product development, and compliance teams, it means new disclosure, documentation, and potentially supply‑chain shifts.
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What This Bill Actually Does
AB 1704 charges the unnamed “state board” with two near‑term deliverables: by the end of 2026, a framework to measure the average carbon intensity of materials used in new construction, and by the end of 2028, a strategy to achieve a 40 percent net reduction in the greenhouse gas emissions associated with those materials by 2035. The bill anchors the reduction baseline to an industry average drawn from Environmental Product Declarations (EPDs) reported for the 2026 calendar year or the most current data available, and it contemplates a phased schedule for targets to begin after the baseline is set.
Operationally, the framework compels two streams of information. First, entities that build projects above specified size thresholds must submit a life‑cycle assessment (LCA) focused on the Product Stage (ISO 14040/14044 A1–A3 phases) to quantify material carbon intensity for that project.
Second, manufacturers must supply Type III EPDs (ISO 14025) or similarly robust, industry‑accepted LCA outputs for products sold for use in covered projects. The bill instructs the board to spell out reporting formats, and it allows the board to create a tracking system; the board may charge only an administrative fee for operating that mechanism.Compliance is flexible.
Projects can use lower‑carbon materials or other approved methods and may combine those with an embodied carbon trading system or alternative compliance approaches if established. The bill builds an explicit safety valve: if switching to lower‑carbon materials would be unfeasible or impose a “cost impact” (defined in the statute), a project that documents those limits will be deemed to comply.
The statute defines “feasibility” with multiple criteria—availability, performance, safety, warranty/defect history, and comparable useful life—and quantifies “significant” cost impact as a 5 percent or greater increase in material or operational costs attributable to the lower‑carbon substitute.Several procedural and legal guardrails shape implementation. The state board must consult stakeholders and technical experts; it cannot use this authority to approve, deny, or delay project permits.
Manufacturers’ reporting obligations are mandatory for compliance, and the statute prevents building projects from being characterized under CEQA as causing adverse environmental impacts solely because they incorporate materials whose manufacture generates emissions. The bill exempts reporting rules from the Administrative Procedure Act but requires public workshopping and interagency technical exchange before adoption; all other regulations remain subject to normal rulemaking procedures.
The Five Things You Need to Know
The state board must adopt a measuring framework by December 31, 2026 and a strategy to reach a 40% net reduction in building‑material GHG emissions no later than December 31, 2035.
Covered projects are those of at least five new residential units or 10,000 square feet of nonresidential building space; these projects must submit an LCA focused on ISO 14040 A1–A3 Product Stage phases.
Manufacturers must provide Type III Environmental Product Declarations (ISO 14025) or an equivalent industry‑accepted LCA; the board may specify alternatives if EPDs are insufficient or supply chains disrupt availability.
The statute defines a ‘significant’ cost impact as a 5% or greater increase in material or operational cost attributable to using a lower‑carbon material; documented unfeasibility or cost impact renders a project ‘deemed to comply.’, Penalties for violations are limited to specified provisions of California’s Health and Safety Code Section 42402 (with harsher penalties for willful or deceitful violations), and penalties do not apply to projects deemed to comply under the feasibility/cost carve‑outs.
Section-by-Section Breakdown
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Framework deadline and interagency consultation
Directs the state board to develop, by December 31, 2026, a measurement framework for average carbon intensity of materials used in new buildings and to consult a specified list of stakeholders and agencies (including the California Building Standards Commission, HCD, and the State Energy Commission). Practically, this creates an interagency process to align building standards, housing policy, and energy policy around a common measurement approach.
Strategy and 40% net‑reduction target
Requires a comprehensive sector strategy by December 31, 2028 that aims for a 40% net reduction in GHG emissions from building materials no later than December 31, 2035. The statute fixes the baseline to an industry average of EPDs reported for 2026 (or the most current data the board selects), which will determine the numerical starting point for subsequent targets and compliance timelines.
LCA and EPD submission requirements
Sets two mandatory disclosure streams: project LCAs (ISO 14040 series focusing on Product Stage A1–A3) for covered projects, and manufacturer EPDs (Type III under ISO 14025) or similarly rigorous, industry‑accepted LCA products. The board must specify how to proceed where EPDs are scarce or supply chains limit availability, giving it discretion to define acceptable substitutes or phase‑in approaches.
Reporting, tracking, and cost/feasibility evaluation
Allows the board to build a tracking mechanism to collect carbon intensity data and monitor progress; the board may recover only administrative costs through fees. Using submitted data, the board must evaluate the cost impact and feasibility of the overall strategy and propose remedies for known cost or implementation barriers—an explicit nod to balancing climate objectives with real‑world constraints.
Definitions of feasibility and cost impact
Defines ‘feasibility’ with multi‑factor criteria (installability, health and safety, equivalent function/ performance/durability, commercial availability, and absence of defect‑claim history). Establishes ‘significant’ cost impact as a 5% or greater increase in material or operational cost or a schedule delay attributable to adopting a lower‑carbon substitute, measured against the project’s baseline materials at permit application.
Applicability, timing, alternative compliance, and deemed compliance
Specifies that targets start no earlier than January 1, 2027 and two years after the baseline is set; for residential projects, the applicable target is locked based on the first model home permit date. Projects may pursue lower‑carbon materials, alternative compliance pathways, or an embodied carbon trading system if established. If after attempting available methods a project still cannot meet the target due to feasibility or cost impact, it is deemed to comply provided it submits specified documentation.
CEQA and rulemaking carve‑outs; public workshop requirement
Prevents adverse environmental impacts from the manufacture of building materials from being attributed to a project under CEQA, and exempts reporting regulations from the Administrative Procedure Act while requiring public comment and workshopping before adoption; other regulations remain subject to the APA. The approach compresses full APA procedures for reporting standards but retains stakeholder engagement through workshops.
Enforcement and penalties
Limits penalties for violations to categories set out in Health and Safety Code Section 42402 (with escalated penalties for deliberate or deceitful violations), and makes those penalties the exclusive enforcement tool for violations of this section and Section 38561.6, except that projects deemed to comply may not be penalized for failing to meet targets.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Manufacturers already producing EPDs and low‑carbon products — they gain a regulatory advantage as disclosure requirements raise market value for products with documented lower embodied carbon.
- Architects, consultants, and LCA service providers — demand for project LCAs, product verification, and compliance documentation will expand a market for technical services and specialized expertise.
- State procurement and large public projects — the bill offers a policy lever to accelerate low‑carbon procurement across CalTrans, DGS, and other agencies listed for expedited adoption measures, enabling coordinated demand signals that can scale markets.
Who Bears the Cost
- Small and medium manufacturers without EPDs — required product reporting and potential testing cost may be material, especially for firms that sell into regional markets without prior EPD investment.
- Developers and builders of covered projects — project teams must budget for LCAs, potential higher‑cost substitute materials, and documentation; even with the 5% carve‑out, compliance work increases preconstruction costs and schedule risk.
- State board and partner agencies — implementation requires technical rulemaking, data management, and ongoing evaluation; while reporting fees can reimburse administrative costs, initial build‑out and interagency coordination will demand staff capacity and expertise.
Key Issues
The Core Tension
AB 1704 pits an aggressive, data‑driven decarbonization goal against the reality of construction procurement, product availability, and cost sensitivity: it asks the market to shift product choice and industrial processes while protecting projects from infeasible or materially costly substitutions—forcing regulators to choose between strict standards that move markets and pragmatic flexibilities that preserve project viability.
The bill builds a heavyweight data regime around LCAs and EPDs but leaves important details to the state board. That creates three implementation risks: data‑quality gaps, uneven EPD coverage across materials and manufacturers, and potential gaming without robust verification.
The statute permits alternative LCA approaches “similar” to Type III EPDs and allows the board to decide how to proceed when data are insufficient; those choices will determine whether the program produces reliable, comparable measures or a patchwork of metrics that hamper market confidence.
The feasibility and cost‑impact carve‑outs both protect projects but create administrative and interpretive burdens. ‘Feasibility’ is multi‑factor and includes subjective judgments (for example, what counts as commercially available “to the region of the project”). The bright‑line 5% threshold for a ‘significant’ cost impact looks administratively neat but will generate disputes about baseline selection, which the bill ties to what the project would have used at permit application.
Finally, the reporting‑rule APA exemption speeds design of data standards but trims formal judicial review pathways; reliance on workshops and stakeholder exchanges shifts much of the rule‑shaping into negotiated spaces where capacity and access could advantage well‑resourced firms.
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