Business groups plan a major protest against California's cap-and-trade carbon market at a regulatory hearing Thursday.

Manufacturers, oil refiners and others plan to testify against the controversial market during a meeting of the California Air Resources Board, which is in charge of the fledgling carbon market.

These groups see the carbon market as a giant tax that will cost businesses upwards of $1 billion a year. They are urging the Air Resources Board, and Gov. Jerry Brown, to lighten the cost burden on businesses or do away with the program altogether.

The program is the central piece of California's climate-change law, AB 32. The market kicks off in earnest Nov. 14, when the resources board will auction off 61 million credits. Each credit represents the right to emit a ton of greenhouse gases.

The board has said it might give away more of the credits for free, instead of auctioning them off. Some business groups are urging the state to make all the credits free.

Thursday's meeting is expected to include a general update on the market, but the board isn't expected to take any specific action.

Nonetheless, business groups plan to be at the meeting in force.

"It's our last chance to really comment on this thing before they go forward with the auction," said Gino DiCaro, spokesman for the California Manufacturers and Technology Association.

The manufacturers group, along with the California Chamber of Commerce, California Business Roundtable and California League of Food Processors, urged Brown recently to rewrite the rules of the market.

"We urge you to take immediate steps to protect California businesses and consumers by increasing the allocation of free allowances," they wrote the governor. "If more time is needed, we urge you to halt this auction as it is currently envisioned. We must ensure that this auction does not raise billions of dollars in new taxes on the backs of California businesses and consumers."

The state plans to hand out carbon credits to 430 factories and others. Most of the credits will be doled out free, but some will be sold. The total allotment - the "cap" - will gradually decrease over the years, reducing the amount of carbon in the air. Companies that exceed their allotment will have to buy them.

© Copyright The Sacramento Bee. All rights reserved.

• Read more articles by Dale Kasler

Order Reprint