On June 26, 2025, the California Court of Appeals held that the environmental impact report (EIR) involved in the California Environmental Quality Act (CEQA) challenge to the County of Los Angeles’s approval of the 12,000-acre Centennial Specific Plan proposed by Tejon Ranchcorp (Tejon), was legally inadequate with respect to climate change impacts, specifically greenhouse gas emissions (GHGs) and wildfire risk. 

The court found that the County’s reliance on California's cap-and-trade program to offset the Centennial project’s estimated unmitigated GHG emissions was prejudicially misleading and unlawful under the CEQA. The EIR claimed the project would emit approximately 157,642 metric tons of greenhouse gas emissions annually. After deeming these emissions “significant,” the County proposed to mitigate 96% of them through the purchase of cap-and-trade allowances. However, the court found this approach improper because, although the cap-and-trade program regulates certain sectors such as energy and fuel suppliers, the Centennial project itself was not a “covered entity” under the program. As a result, relying on emissions reductions already required by law for other entities did not constitute valid CEQA mitigation. 

Further, the CEQA’s “additionality” requirement prohibits the use of emissions reductions that are already legally mandated for other entities to offset a project’s climate impacts. Mitigation measures must result in new, project-specific reductions rather than rely on reductions that are already accounted for under existing regulatory schemes. Consequently, by inappropriately applying cap-and-trade credits, the court held that the County understated the project’s climate impacts, thus violating the CEQA. As a result, the court mandated that the EIR be decertified until the GHG analysis is corrected. 

The court also affirmed the Superior Court’s finding that the EIR’s discussion of wildfire risks beyond the project site was legally deficient because it failed to adequately consider how the project could exacerbate off-site wildfire conditions. The EIR acknowledged on-site wildfire risks but offered only a one-paragraph discussion of off-site wildfire risks, failing to analyze the risk of new ignitions from off-site project infrastructure and failing to meaningfully reduce these off-site risks. This rendered the analysis prejudicially misleading, especially given the growing severity of wildfires linked to climate change in California. 

The court also rejected claims that the EIR violated CEQA with respect to wildlife movement, habitat connectivity, native vegetation loss, and failure to consider feasible project alternatives. It further rejected Tejon’s claim preclusion argument based on Climate Resolve’s settlement on similar grounds.

Challenge to large development project on border of Los Angeles County and Kern County.

Center for Biological Diversity v. County of Los Angeles

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California Court of Appeals Rejected GHG Offset Scheme in Tejon Ranch Development

Filed

United States of America

California

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California Court of Appeals Rejected GHG Offset Scheme in Tejon Ranch Development

Policy instrument

Risk

Impacted group

Just transition

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance