By Paul Sousa, Director of Regulatory & Environmental Affairs

Since the passage of SB 1383 (Lara) in 2016, California’s dairy industry has played an active role in the state’s ambitious climate change and greenhouse gas (GHG) reduction goals. Much has changed at both the state and federal levels, but one thing remains constant: dairy continues to be part of the climate solution.

California’s GHG reduction targets are aggressive, but dairy families have made significant progress—especially through incentive-based programs aimed at cutting manure methane emissions. Technologies such as anaerobic digesters and alternative manure management systems have been key to these reductions by capturing or minimizing methane from manure storage.

Understanding Dairy’s Emissions

The main GHGs associated with dairy operations include:

• Carbon dioxide (CO₂): A relatively small portion of dairy’s emissions, mainly from fossil fuel use.
• Nitrous oxide (N₂O): Emitted from soils involved in feed production.
• Methane (CH₄): The largest source, released from both manure decomposition (in anaerobic lagoons) and cows’ enteric fermentation.

Reducing methane has been the primary focus of state programs, and the dairy sector has responded with incredible success.

The Policy Landscape Is Evolving

While the federal government has slowed progress on climate related issues—recently with the SEC pausing a rule requiring climate-related risk and GHG disclosures—California is forging ahead.

Two new state laws passed in 2023—SB 253 and SB 261—require large companies operating in California to report their emissions:

• By 2026, reporting will cover Scope 1 (direct onsite emissions) and Scope 2 (indirect emissions from purchased energy).
• By 2027, companies must also report Scope 3 emissions, which include emissions from supply chain activities—including potentially dairy farms.

This could affect dairy indirectly, as processors and retailers may look to track and report emissions associated with the milk and dairy ingredients they purchase.  Western United Dairies (WUD) is actively engaged in this issue to ensure that farmers are not unfairly burdened by these reporting requirements.

Recognizing Our Progress

California’s dairy families have made decades of progress in reducing emissions, with more dramatic cuts in recent years. It’s important that our industry receives recognition for these achievements.

Tools like the FARM Environmental Stewardship (ES) Program—developed by the National Milk Producers Federation—help quantify on-farm emissions. Many dairies are already using FARM ES, and the data generated meets Scope 3 reporting standards, helping demonstrate our sector’s progress.

Looking Ahead

The shift toward sustainability has come with challenges—but also incentives that improve resilience, cut costs, and open up new revenue streams. Programs like Dairy Plus continue to offer funding to support emission reduction projects.

The latest round of awards should be announced shortly, and a third solicitation is expected soon. Now is a good time to start thinking about projects that could benefit your dairy—and position it for long-term sustainability and compliance.