HB 2957 — Reducing greenhouse gas emissions by providing authority for the regulation of indirect sources under the clean air act and implementing standards and programs that reduce emissions associated with buildings.

H-5356.1SUBSTITUTEH-5194.1HOUSE HOUSE BILL 2957State of Washington66th Legislature2020 Regular SessionByHouseSessionByRepresentatives AppropriationsFitzgibbon (originallyand sponsoredPolletRead byfirst Representativestime Fitzgibbon03/02/20.Referred andto Pollet)READCommittee FIRSTon TIMEAppropriations.AN 03/02/20.AN ACT Relating to reducing greenhouse gas emissions by providing authority for the regulation of indirect sources under the clean air act and implementing standards and programs that reduce emissions associated with buildings;

RACT requirements for a source or source category shall be adopted only after notice and opportunity for comment are afforded.(21) "Silvicultural burning" means burning of wood fiber on forestland consistent with the provisions of RCW ((70.94.660))70.94.6534.(22) "Source" means all of the emissions units including quantifiable fugitive emissions, that are located on one or more contiguous or adjacent properties, and are under the control of the same person, or persons under common control, whose activities are ancillary to the production of a single product or functionally related group of products.(23) "Stationary source" means any building, structure, facility, or installation that emits or may emit any air contaminant.(24) "Trigger level" means the ambient level of fine particulates, measured in micrograms per cubic meter, that must be detected prior to initiating a first or second stage of impaired air quality under RCW 70.94.473.(25)70.94.473.Sec. "Indirect emissions" means, for purposes only of emissions of greenhouse gases as defined in RCW 70.235.010, the emissions from the production or distribution of fuels where the release of air contaminants into the ambient air occurs during the consumption, use, combustion, or oxidation of the fuels.(26) "Leakage" means a reduction in emissions of greenhouse gases within the state that is offset by an increase in emissions of greenhouse gas emissions outside the state.Sec.

The department or authority may require persons who produce or distribute fossil fuels or other products that emit or the combustion of which emits greenhouse gases in Washington to comply with air quality standards, emission standards, or emission limits on emissions of greenhouse gases.

((and))(iii)and(iii) Emissions of carbon dioxide associated with the complete combustion or oxidation of liquid motor vehicle fuel, special fuel, or aircraft fuel that is sold in Washington where the annual emissions associated with that combustion or oxidation equal or exceed ten thousand metric tons be reported to the department.

((The))ExceptThe as provided in (a)(iv) of this subsection, the department shall not require suppliers to use additional data to calculate greenhouse gas emissions other than the data the suppliers report to the department of licensing.

Any proprietary or confidential information exempt from disclosure when reported to the department of licensing is exempt from disclosure when shared by the department of licensing with the department under this provision;provision.(b)(i) Except as otherwise provided in this subsection, the rules adopted by the department under (a) of this subsection must be consistent with the regulations adopted by the United States environmental protection agency in 40 C.F.R.

and(iv) If the department determines that it is necessary for purposes of accurately measuring greenhouse gas emissions associated with sources of indirect emissions regulated consistent with RCW 70.94.331(2)(c), the department may require the submission of data or information to be used for purposes of calculating greenhouse gas emissions that is different from or additional to the data reported under (a)(iii) of this subsection.(b)(i) Except as otherwise provided in this subsection, the rules adopted by the department under (a) of this subsection must be consistent with the regulations adopted by the United States environmental protection agency in 40 C.F.R.

., Laws of 2020 (sections 2 and 3 of this act), if the rule applies to sources of direct or indirect emissions other than transportation fuels alone, the department may not regulate entities that haveemit indirect emissions of less than twenty-five thousand metric tons per year.

For the purposes of assessing whether an entity exceeds this threshold, the department may average emissionsemission reported for recent years for which such data is available, or may use other reasonable methods of determining whether an entity may be assumed to emit at least twenty-five thousand metric tons per year, and therefore may be covered by regulatory requirements consistent with this section and sections 2 and 3, chapter .

., Laws of 2020 (sections 2 and 3 of this act).(2)(a) For the purposes of any rules adopted by the department to regulate greenhouse gases under this chapter, for biofuels that lead to reduced life-cycle emissions relative to fossil fuels that the biofueldepartment maymust, reasonably be presumed to be a substitute for including,biofuels, butallow not limited to, gasoline, diesel, natural gas, or heating oil, the department must assign to the biofuel credits against compliance obligationsobligations, or assign to the biofuel the generation of emission reduction unitsunits, or other regulatory or market-based mechanisms in an amount proportional to the difference in life-cyclelifecycle emissions betweenattributable theto:(i) fossilThe fuelbiofuel; and the biofuel.(b) For the purposes of this subsection, "biofuel" means a liquid or gaseous fuel derived from organic matter including, but not limited to, biodiesel, renewable diesel, ethanol, renewable natural gas, and renewable propane.(3) For the purposes of any rules adopted by the department to regulate greenhouse gases under this chapter, the department may:(a) Determine, assess, and collect annual fees from persons subject to the rules in an amount sufficient to cover the direct and indirect costs of administering and enforcing the requirements of the rules;

and(b)and(ii) RelyThe uponfossil market-basedfuel mechanisms,including, includingbut bankable,not tradeablelimited creditsto, gasoline, diesel, or emissionheating reductionoil, unitsreasonably assumed to achievebe greenhousedisplaced gasby emissionthe reductions,use asof longthe asbiofuel.(b) suchFor mechanismsthe arepurposes notof auctionedthis subsection, "biofuel" means a liquid or soldgaseous fuel derived from organic matter including, but not limited to, biodiesel, renewable diesel, ethanol, renewable natural gas, and renewable propane.(3) For the purposes of any rules adopted by the statedepartment to regulate greenhouse gases under this chapter, the department may:(a) Determine, assess, and collect annual fees from persons subject to the rules.(4)rules Byin Januaryan 20,amount 2021,sufficient to cover the housedirect ofand representativesindirect environmentcosts of administering and energyenforcing committeethe andrequirements of the senaterules;(b) environment,Rely energy,upon andmarket-based technologymechanisms, committeeincluding mustbankable, holdtradeable atcredits leastor oneemission jointreduction meetingunits atto whichachieve thegreenhouse departmentgas mustemission presentreductions, anas updatelong onas thesuch progressmechanisms ofare rulenot makingauctioned authorizedor sold by thisthe act.NEWstate SECTION.  Sec.to persons subject to the rules;

and(c) Identify and give special consideration to energy-intensive and trade-exposed facilities only to the extent necessary in order to address leakage.(4) For the purposes of this section, "leakage" means a reduction in emissions of greenhouse gases within the state that is offset by an increase in emissions of greenhouse gas emissions outside the state.(5) By January 20, 2021, the house of representatives environment and energy committee and the senate environment, energy, and technology committee must hold at least one joint meeting at which the department must present an update on the progress of rule making authorized by this act.NEW SECTION.  Sec.

A new section is added to chapter 70.94 RCW to read as follows:(1) The department may give special consideration to energy-intensive and trade-exposed facilities only to the extent necessary to address leakage.(2) For the purposes of this section, "energy-intensive and trade-exposed facilities" mean facilities with the following North American industry classification system (NAICS) codes, using the system in effect as of January 1, 2020:(a) 311411:

Frozen fruit, juice, and vegetable manufacturing;(b) 311423:

Dried and dehydrated food manufacturing;(c) 311611:

Animal (except poultry) slaughtering;(d) 322110:

Pulp mills;(e) 322121:

Paper (except newsprint) mills;(f) 322122:

Newsprint mills;(g) 322130:

Paperboard mills;(h) 325120:

Industrial gas manufacturing;(i) 324110:

Petroleum refineries;(j) 325188:

All other basic inorganic chemical manufacturing;(k) 325199:

All other basic organic chemical manufacturing;(l) 325311:

Nitrogenous fertilizer manufacturing;(m) 327211:

Flat glass manufacturing;(n) 327213:

Glass container manufacturing;(o) 327310:

Cement manufacturing;(p) 327410:

Lime manufacturing;(q) 327420:

Gypsum product manufacturing;(r) 327992:

Ultra high purity silicon manufacturing;(s) 331111:

Iron and steel mills;(t) 331312:

Primary aluminum production;(u) 331315:

Aluminum sheet, plate, and foil manufacturing;(v) 331419:

Primary smelting and refining of nonferrous metal (except copper and aluminum);(w) 334413:

Semiconductor and related device manufacturing;(x) 336411:

Aircraft manufacturing;

and(y) 336413:

Other aircraft parts and auxiliary equipment manufacturing.(3) The energy-intensive and trade-exposed facilities to which the department may give special consideration do not include the products produced by the facilities.NEW SECTION.  Sec.

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