Under California’s Cap-and-Trade Program, covered entities may use offset credits for up to 8 percent of their total compliance obligation for each compliance period. Offsets are tradable credits that represent verified GHG emission reductions in sectors and sources not covered under the cap. The inclusion of offsets in the program support the development of innovative projects and technologies from sources not subject to a compliance obligation. Below is a quick recap of the first year of California’s compliance offset program.