Clean fuels program

AN ACT Relating to the clean fuels program; amending RCW 1
70A.535.025, 70A.15.3150, and 70A.15.3160; reenacting and amending 2
RCW 70A.535.010 and 43.21B.110; adding a new section to chapter 3
70A.535 RCW; and prescribing penalties. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 70A.535.025 and 2022 c 182 s 408 are each amended to 6
read as follows: 7
(1) The department shall adopt rules that establish standards 8
that reduce carbon intensity in transportation fuels used in 9
Washington. The standards established by the rules must be based on 10
the carbon intensity of gasoline and gasoline substitutes and the 11
carbon intensity of diesel and diesel substitutes. The standards:12
(a) Must reduce the overall, aggregate carbon intensity of 13
transportation fuels used in Washington; 14
(b) May only require carbon intensity reductions at the aggregate 15
level of all transportation fuels and may not require a reduction in 16
carbon intensity to be achieved by any individual type of 17
transportation fuel; 18
(c) Must assign a compliance obligation to fuels whose carbon 19
intensity exceeds the standards adopted by the department, consistent 20
with the requirements of RCW 70A.535.030; and 21
H-0615.1
HOUSE BILL 1409
State of Washington 69th Legislature 2025 Regular Session
By Representatives Fitzgibbon, Doglio, Berry, Duerr, Parshley, Reed,
Ormsby, Hill, and Macri
Read first time 01/20/25. Referred to Committee on Environment &
Energy.
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(d) Must assign credits that can be used to satisfy or offset 1
compliance obligations to fuels whose carbon intensity is below the 2
standards adopted by the department and that elect to participate in 3
the program, consistent with the requirements of RCW 70A.535.030.4
(2) The clean fuels program adopted by the department must be 5
designed such that: 6
(a) Regulated parties generate deficits and may reconcile the 7
deficits, and thus comply with the clean fuels program standards for 8
a compliance period, by obtaining and retiring credits;9
(b) Regulated parties and credit generators may generate credits 10
for fuels used as substitutes or alternatives for gasoline or diesel;11
(c) Regulated parties, credit generators, and credit aggregators 12
shall have opportunities to trade credits; and 13
(d) Regulated parties shall be allowed to carry over to the next 14
compliance period a small deficit without penalty.15
(3) The department shall, throughout a compliance period, 16
regularly monitor the availability of fuels needed for compliance 17
with the clean fuels program. 18
(4)(a) Under the clean fuels program, the department shall 19
monthly calculate the volume-weighted average price of credits and, 20
no later than the last day of the month immediately following the 21
month for which the calculation is completed, post the formula and 22
the nonaggregated data the department used for the calculation and 23
the results of the calculation on the department's website.24
(b) In completing the calculation required by this subsection, 25
the department may exclude from the data set credit transfers without 26
a price or other credit transfers made for a price that falls two 27
standard deviations outside of the mean credit price for the month. 28
Data posted on the department's website under this section may not 29
include any individually identifiable information or information that 30
would constitute a trade secret. 31
(5)(((a) Except as provided in this section, the )) The rules 32
adopted under this section must reduce the greenhouse gas emissions 33
attributable to each unit of the fuels to 20 percent below 2017 34
levels by ((2038)) no earlier than January 1, 2034, based on the 35
following schedule: 36
(((i))) (a) No more than 0.5 percent each year in 2023 and 2024;37
(((ii))) (b) No more than an additional one percent each year 38
beginning in 2025 ((through 2027;39
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(iii) No more than an additional 1.5 percent each year beginning 1
in 2028 through 2031; and2
(iv) No change in 2032 and 2033.3
(b) The rules must establish a start date for the clean fuels 4
program of no later than January 1, 2023.5
(6) Beginning with the program year beginning in calendar year 6
2028, the department may not increase the carbon intensity reductions 7
required by the applicable clean fuels program standard adopted by 8
the department under subsection (5) of this section beyond a 10 9
percent reduction in carbon intensity until the department 10
demonstrates that the following have occurred:11
(a) At least a 15 percent net increase in the volume of in-state 12
liquid biofuel production and the use of feedstocks grown or produced 13
within the state relative to the start of the program; and14
(b) At least one new or expanded biofuel production facility 15
representing an increase in production capacity or producing, in 16
total, in excess of 60,000,000 gallons of biofuels per year has or 17
have received after July 1, 2021, all necessary siting, operating, 18
and environmental permits post all timely and applicable appeals. As 19
part of the threshold of 60,000,000 gallons of biofuel under this 20
subsection, at least one new facility producing at least 10,000,000 21
gallons per year must have received all necessary siting, operating, 22
and environmental permits. Timely and applicable appeals must be 23
determined by the attorney general's office.24
(7) Beginning with the program year beginning in calendar year 25
2031, the department may not increase the carbon intensity reductions 26
required by the applicable clean fuels program standard adopted by 27
the department under subsection (5) of this section beyond a 10 28
percent reduction in carbon intensity until the:29
(a) Joint legislative audit and review committee report required 30
in RCW 70A.535.140 has been completed; and31
(b) 2033 regular legislative session has adjourned, in order to 32
allow an opportunity for the legislature to amend the requirements of 33
this chapter in light of the report required in (a) of this 34
subsection.35
(8))) and on January 1, 2026;36
(c) No more than an additional three percent beginning on January 37
1, 2027; and38
(d) No more than an additional two percent each year beginning 39
January 1, 2028, through January 1, 2034.40
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(6) Transportation fuels exported from Washington are not subject 1
to the greenhouse gas emissions reduction requirements in this 2
section. 3
(((9))) (7) To the extent the requirements of this chapter 4
conflict with the requirements of chapter 19.112 RCW, the 5
requirements of this chapter prevail. 6
NEW SECTION. Sec. 2. A new section is added to chapter 70A.535 7
RCW to read as follows: 8
(1) All regulated parties and credit generators are required to 9
submit reports under RCW 70A.535.070 in a timely manner to meet the 10
entities' compliance obligations and shall comply with all 11
requirements for recordkeeping, reporting, transacting credits, 12
obtaining a carbon intensity calculation, and other provisions of 13
this chapter. 14
(2) Each deficit for which a registered party does not retire a 15
corresponding credit at the end of a compliance period constitutes a 16
separate violation of this chapter unless that registered party 17
participates in the credit clearance market as required under RCW 18
70A.535.030(8). For each violation, the department may issue a 19
penalty of up to four times the maximum posted price of the most 20
recent credit clearance market. 21
(3) The department may issue a penalty for any misreporting by a 22
party that results in the claim of credits that does not meet the 23
requirements of this chapter or the failure to report a deficit. The 24
penalty issued under this subsection may be up to $1,000 per credit 25
or deficit in violation of the requirements of this chapter. A 26
registered party may not be penalized under this subsection if any 27
misreporting in a quarterly report is corrected by the end of that 28
quarter's reporting period. 29
(4) The department may issue a penalty of up to $10,000 per day 30
each day a registered party does not submit a report under RCW 31
70A.535.070 by the reporting deadline. 32
(5) The department may issue a penalty for credits generated in 33
exceedance of a carbon intensity standard adopted by the department 34
for that year of up to $1,000 per credit for each illegitimate credit 35
generated as a result of the incorrect carbon intensity score.36
(6) The department may issue a penalty of up to $25,000 per month 37
that a regulated party is not registered with the department in 38
violation of RCW 70A.535.070. 39
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(7) The department may issue to any participating electric 1
utility a penalty of up to four times the credit revenue improperly 2
spent in violation of RCW 70A.535.080 or rules adopted to implement 3
that section. 4
(8) The department may issue a penalty of up to $50,000 or 5
$10,000 per day for a violation of the third-party verification 6
requirements adopted by the department under RCW 70A.535.030(3)(c) 7
for as long as the registered party remains out of compliance with 8
these requirements. 9
(9) For violations other than those described in subsections (2) 10
through (8) of this section, the department may issue a penalty of up 11
to $10,000 per day per violation for each day any registered party 12
violates the terms of this chapter or an order issued under this 13
chapter. 14
(10) An electric utility must notify its retail customers in 15
published form within three months of paying a monetary penalty under 16
this section. 17
(11) Penalties and orders issued under this section may be 18
appealed to the pollution control hearings board created in chapter 19
43.21B.RCW. Penalties collected under this chapter must be deposited 20
in the carbon emissions reduction account created in RCW 70A.65.240.21
Sec. 3. RCW 70A.535.010 and 2023 c 232 s 2 are each reenacted 22
and amended to read as follows: 23
The definitions in this section apply throughout this chapter 24
unless the context clearly indicates otherwise. 25
(1) "Alternative jet fuel" means a fuel that can be blended and 26
used with conventional petroleum jet fuels without the need to modify 27
aircraft engines and existing fuel distribution infrastructure, and 28
that have a lower carbon intensity than the applicable annual carbon 29
intensity standard in Table 2 of WAC 173-424-900, as it existed on 30
July 1, 2023. Alternative jet fuel includes jet fuels derived from 31
coprocessed feedstocks at a conventional petroleum refinery.32
(2) "Carbon dioxide equivalents" has the same meaning as defined 33
in RCW 70A.45.010. 34
(3) "Carbon intensity" means the quantity of life-cycle 35
greenhouse gas emissions, per unit of fuel energy, expressed in grams 36
of carbon dioxide equivalent per megajoule (gCO2e/MJ).37
(4) "Clean fuels program" means the requirements established 38
under this chapter. 39
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(5) "Cost" means an expense connected to the manufacture, 1
distribution, or other aspects of the provision of a transportation 2
fuel product. 3
(6) "Credit" means a unit of measure generated when a 4
transportation fuel with a carbon intensity that is less than the 5
applicable standard adopted by the department under RCW 70A.535.025 6
is produced, imported, or dispensed for use in Washington, such that 7
one credit is equal to one metric ton of carbon dioxide equivalents. 8
A credit may also be generated through other activities consistent 9
with this chapter. 10
(7) "Deficit" means a unit of measure generated when a 11
transportation fuel with a carbon intensity that is greater than the 12
applicable standard adopted by the department under RCW 70A.535.025 13
is produced, imported, or dispensed for use in Washington, such that 14
one deficit is equal to one metric ton of carbon dioxide equivalents.15
(8) "Department" means the department of ecology.16
(9) "Electric utility" means a consumer-owned utility or 17
investor-owned utility, as those terms are defined in RCW 19.29A.010.18
(10) "Greenhouse gas" has the same meaning as defined in RCW 19
70A.45.010. 20
(11) "Military tactical vehicle" means a motor vehicle owned by 21
the United States department of defense or the United States military 22
services and that is used in combat, combat support, combat service 23
support, tactical or relief operations, or training for such 24
operations. 25
(12) "Motor vehicle" has the same meaning as defined in RCW 26
46.04.320. 27
(13) "Price" means the amount of payment or compensation provided 28
as consideration for a specified quantity of transportation fuel by a 29
consumer or end user of the transportation fuel. 30
(((14))) "Registered party" means a regulated party or credit 31
generator registered under RCW 70A.535.070.32
(15) "Regulated party" means a producer or importer of any amount 33
of a transportation fuel that is ineligible to generate credits under 34
this chapter. 35
(((15))) (16)(a) "Tactical support equipment" means equipment 36
using a portable engine, including turbines, that meets military 37
specifications, owned by the United States military services or its 38
allies, and that is used in combat, combat support, combat service 39
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support, tactical or relief operations, or training for such 1
operations. 2
(b) "Tactical support equipment" includes, but is not limited to, 3
engines associated with portable generators, aircraft start carts, 4
heaters, and lighting carts. 5
(((16))) (17) "Transportation fuel" means electricity and any 6
liquid or gaseous fuel sold, supplied, offered for sale, or used for 7
the propulsion of a motor vehicle or that is intended for use for 8
transportation purposes. 9
Sec. 4. RCW 43.21B.110 and 2024 c 347 s 5, 2024 c 340 s 4, and 10
2024 c 339 s 16 are each reenacted and amended to read as follows:11
(1) The hearings board shall only have jurisdiction to hear and 12
decide appeals from the following decisions of the department, the 13
director, local conservation districts, the air pollution control 14
boards or authorities as established pursuant to chapter 70A.15 RCW, 15
local health departments, the department of natural resources, the 16
department of fish and wildlife, the parks and recreation commission, 17
and authorized public entities described in chapter 79.100 RCW:18
(a) Civil penalties imposed pursuant to chapter 70A.230 RCW and 19
RCW 18.104.155, 70A.15.3160, 70A.300.090, 70A.20.050, 70A.230.020, 20
70A.205.280, 70A.355.070, 70A.430.070, 70A.500.260, 70A.505.100, 21
70A.505.110, 70A.530.040, 70A.350.070, 70A.515.060, 70A.245.040, 22
70A.245.050, 70A.245.070, 70A.245.080, 70A.245.130, 70A.245.140, 23
70A.65.200, 70A.455.090, section 2 of this act, 70A.550.030, 24
70A.555.110, 70A.560.020, 70A.565.030, 76.09.170, 77.55.440, 25
78.44.250, 88.46.090, 90.03.600, 90.46.270, 90.48.144, 90.56.310, 26
90.56.330, and 90.64.102. 27
(b) Orders issued pursuant to RCW 18.104.043, 18.104.060, 28
18.104.130, 43.27A.190, 70A.15.2520, 70A.15.3010, 70A.15.4530, 29
70A.15.6010, 70A.205.280, 70A.214.140, 70A.300.120, 70A.350.070, 30
70A.245.020, 70A.65.200, section 2 of this act, 70A.505.100, 31
70A.555.110, 70A.560.020, 70A.565.030, 86.16.020, 88.46.070, 32
90.03.665, 90.14.130, 90.46.250, 90.48.120, 90.48.240, 90.56.330, and 33
90.64.040. 34
(c) Except as provided in RCW 90.03.210(2), the issuance, 35
modification, or termination of any permit, certificate, or license 36
by the department or any air authority in the exercise of its 37
jurisdiction, including the issuance or termination of a waste 38
disposal permit, the denial of an application for a waste disposal 39
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permit, the modification of the conditions or the terms of a waste 1
disposal permit, a decision to approve or deny a solid waste 2
management plan under RCW 70A.205.055, approval or denial of an 3
application for a beneficial use determination under RCW 70A.205.260, 4
an application for a change under RCW 90.03.383, or a permit to 5
distribute reclaimed water under RCW 90.46.220. 6
(d) Decisions of local health departments regarding the granting 7
or denial of solid waste permits pursuant to chapter 70A.205 RCW, 8
including appeals by the department as provided in RCW 70A.205.130.9
(e) Decisions of local health departments regarding the issuance 10
and enforcement of permits to use or dispose of biosolids under RCW 11
70A.226.090. 12
(f) Decisions of the department regarding waste-derived 13
fertilizer or micronutrient fertilizer under RCW 15.54.820.14
(g) Decisions of local conservation districts related to the 15
denial of approval or denial of certification of a dairy nutrient 16
management plan; conditions contained in a plan; application of any 17
dairy nutrient management practices, standards, methods, and 18
technologies to a particular dairy farm; and failure to adhere to the 19
plan review and approval timelines in RCW 90.64.026 as provided in 20
RCW 90.64.028. 21
(h) Any other decision by the department or an air authority 22
which pursuant to law must be decided as an adjudicative proceeding 23
under chapter 34.05 RCW. 24
(i) Decisions of the department of natural resources, the 25
department of fish and wildlife, and the department that are 26
reviewable under chapter 76.09 RCW, and the department of natural 27
resources' appeals of county, city, or town objections under RCW 28
76.09.050(7). 29
(j) Forest health hazard orders issued by the commissioner of 30
public lands under RCW 76.06.180. 31
(k) Decisions of the department of fish and wildlife to issue, 32
deny, condition, or modify a hydraulic project approval permit under 33
chapter 77.55 RCW, to issue a stop work order, to issue a notice to 34
comply, to issue a civil penalty, or to issue a notice of intent to 35
disapprove applications. 36
(l) Decisions of the department of natural resources that are 37
reviewable under RCW 78.44.270. 38
(m) Decisions of an authorized public entity under RCW 79.100.010 39
to take temporary possession or custody of a vessel or to contest the 40
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amount of reimbursement owed that are reviewable by the hearings 1
board under RCW 79.100.120. 2
(n) Decisions of the department of ecology that are appealable 3
under RCW 70A.245.020 to set recycled minimum postconsumer content 4
for covered products or to temporarily exclude types of covered 5
products in plastic containers from minimum postconsumer recycled 6
content requirements. 7
(o) Orders by the department of ecology under RCW 70A.455.080.8
(2) The following hearings shall not be conducted by the hearings 9
board: 10
(a) Hearings required by law to be conducted by the shorelines 11
hearings board pursuant to chapter 90.58 RCW, except where appeals to 12
the pollution control hearings board and appeals to the shorelines 13
hearings board have been consolidated pursuant to RCW 43.21B.340.14
(b) Hearings conducted by the department pursuant to RCW 15
70A.15.3010, 70A.15.3070, 70A.15.3080, 70A.15.3090, 70A.15.3100, 16
70A.15.3110, and 90.44.180. 17
(c) Appeals of decisions by the department under RCW 90.03.110 18
and 90.44.220. 19
(d) Hearings conducted by the department to adopt, modify, or 20
repeal rules. 21
(3) Review of rules and regulations adopted by the hearings board 22
shall be subject to review in accordance with the provisions of the 23
administrative procedure act, chapter 34.05 RCW. 24
Sec. 5. RCW 70A.15.3150 and 2023 c 470 s 1017 are each amended 25
to read as follows: 26
(1) Any person who knowingly violates any of the provisions of 27
this chapter, chapter 70A.25((,)) or 70A.60((, or 70A.535)) RCW, or 28
any ordinance, resolution, or regulation in force pursuant thereto is 29
guilty of a gross misdemeanor and upon conviction thereof shall be 30
punished by a fine of not more than ((ten thousand dollars)) $10,000, 31
or by imprisonment in the county jail for up to ((three hundred 32
sixty-four)) 364 days, or by both for each separate violation.33
(2) Any person who negligently releases into the ambient air any 34
substance listed by the department of ecology as a hazardous air 35
pollutant, other than in compliance with the terms of an applicable 36
permit or emission limit, and who at the time negligently places 37
another person in imminent danger of death or substantial bodily harm 38
is guilty of a gross misdemeanor and shall, upon conviction, be 39
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punished by a fine of not more than ((ten thousand dollars)) $10,000, 1
or by imprisonment for up to ((three hundred sixty-four )) 364 days, 2
or both. 3
(3) Any person who knowingly releases into the ambient air any 4
substance listed by the department of ecology as a hazardous air 5
pollutant, other than in compliance with the terms of an applicable 6
permit or emission limit, and who knows at the time that he or she 7
thereby places another person in imminent danger of death or 8
substantial bodily harm, is guilty of a class C felony and shall, 9
upon conviction, be punished by a fine of not less than ((fifty 10
thousand dollars)) $50,000, or by imprisonment for not more than five 11
years, or both. 12
(4) Any person who knowingly fails to disclose a potential 13
conflict of interest under RCW 70A.15.2000 is guilty of a gross 14
misdemeanor, and upon conviction thereof shall be punished by a fine 15
of not more than ((five thousand dollars)) $5,000.16
Sec. 6. RCW 70A.15.3160 and 2022 c 179 s 15 are each amended to 17
read as follows: 18
(1)(a) Except as provided in RCW 43.05.060 through 43.05.080 and 19
43.05.150, and in addition to or as an alternate to any other penalty 20
provided by law, any person who violates any of the provisions of 21
this chapter, chapter 70A.25, 70A.60, 70A.450, ((70A.535,)) or 22
70A.540 RCW, RCW 76.04.205, or any of the rules in force under such 23
chapters or section may incur a civil penalty in an amount not to 24
exceed ((ten thousand dollars )) $10,000 per day for each violation. 25
Each such violation shall be a separate and distinct offense, and in 26
case of a continuing violation, each day's continuance shall be a 27
separate and distinct violation. Enforcement actions related to 28
violations of RCW 76.04.205 must be consistent with the provisions of 29
RCW 76.04.205. 30
(b) Any person who fails to take action as specified by an order 31
issued pursuant to this chapter shall be liable for a civil penalty 32
of not more than ((ten thousand dollars )) $10,000 for each day of 33
continued noncompliance. 34
(2)(a) Penalties incurred but not paid shall accrue interest, 35
beginning on the ninety-first day following the date that the penalty 36
becomes due and payable, at the highest rate allowed by RCW 19.52.020 37
on the date that the penalty becomes due and payable. If violations 38
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or penalties are appealed, interest shall not begin to accrue until 1
the thirty-first day following final resolution of the appeal.2
(b) The maximum penalty amounts established in this section may 3
be increased annually to account for inflation as determined by the 4
state office of the economic and revenue forecast council.5
(3) Each act of commission or omission which procures, aids or 6
abets in the violation shall be considered a violation under the 7
provisions of this section and subject to the same penalty. The 8
penalties provided in this section shall be imposed pursuant to RCW 9
43.21B.300. 10
(4)(a) Except as provided in (b) of this subsection, all 11
penalties recovered under this section by the department or the 12
department of natural resources shall be paid into the state treasury 13
and credited to the air pollution control account established in RCW 14
70A.15.1010 or, if recovered by the authority, shall be paid into the 15
treasury of the authority and credited to its funds. If a prior 16
penalty for the same violation has been paid to a local authority, 17
the penalty imposed by the department under subsection (1) of this 18
section shall be reduced by the amount of the payment.19
(b) All penalties recovered for violations of chapter 70A.60 RCW 20
must be paid into the state treasury and credited to the refrigerant 21
emission management account created in RCW 70A.60.050.22
(5) To secure the penalty incurred under this section, the state 23
or the authority shall have a lien on any vessel used or operated in 24
violation of this chapter which shall be enforced as provided in RCW 25
60.36.050. 26
(6) Public or private entities that are recipients or potential 27
recipients of department grants, whether for air quality related 28
activities or not, may have such grants rescinded or withheld by the 29
department for failure to comply with provisions of this chapter.30
(7) In addition to other penalties provided by this chapter, 31
persons knowingly underreporting emissions or other information used 32
to set fees, or persons required to pay emission or permit fees who 33
are more than ninety days late with such payments may be subject to a 34
penalty equal to three times the amount of the original fee owed.35
(8) The department shall develop rules for excusing excess 36
emissions from enforcement action if such excess emissions are 37
unavoidable. The rules shall specify the criteria and procedures for 38
the department and local air authorities to determine whether a 39
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period of excess emissions is excusable in accordance with the state 1
implementation plan. 2
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