Agricultural fuel/CCA ex.

AN ACT Relating to the exemption for fuels used for agricultural 1
purposes in the climate commitment act; amending RCW 70A.65.080; and 2
adding a new section to chapter 70A.65 RCW. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. A new section is added to chapter 70A.65 5
RCW to read as follows: 6
(1) The department must adopt rules under this chapter to 7
establish a remittance program for fuel used by persons whose fuel 8
use is exempt under RCW 70A.65.080(7)(e). 9
(a) For licensed dyed fuel, the department must provide 10
remittances to a supplier for fuel sold by the supplier to a person 11
whose fuel use is exempt under RCW 70A.65.080(7)(e), unless the fuel 12
sold was from a source whose emissions are not covered emissions 13
under this chapter. 14
(b) For other fuel used for exempt purposes under RCW 15
70A.65.080(7)(e) (i) or (ii), the department must provide remittances 16
to the persons whose fuel use is exempt. 17
(2)(a) The department's remittance rules must allow a supplier of 18
fuels to persons whose emissions are exempt under this chapter, 19
including licensed dyed diesel fuel users and other exempt users, to 20
apply to the department for a remittance of a projected fuel price 21
H-1107.1
HOUSE BILL 1912
State of Washington 69th Legislature 2025 Regular Session
By Representatives Dent, Reeves, Schmick, Springer, Orcutt, Nance,
McClintock, Morgan, Engell, Paul, Mendoza, Bernbaum, Barnard,
Richards, Eslick, Manjarrez, Dufault, Shavers, Burnett, Timmons,
Abell, Thai, Barkis, Davis, Connors, and Hill
Read first time 02/10/25. Referred to Committee on Environment &
Energy.
p. 1 HB 1912
impact derived from total allowance cost, based on the most recent 1
quarterly auction price, for volumes of fuel supplied by the supplier 2
to exempt fuel users. 3
(b) For purposes of computing the amount of the remittance to 4
suppliers and exempt fuel users and calculating the fuel price impact 5
experienced by exempt users under RCW 70A.65.080(7)(e), the 6
department must: 7
(i) Assume that the compliance costs of suppliers are passed 8
through, in full, to exempt users; and 9
(ii) Apply a calculation methodology that multiplies the 10
greenhouse gas emissions per gallon of fuel, exclusive of any biofuel 11
content, by the most recent quarterly allowance auction price.12
(c) The department must post the fuel price impact calculated 13
under (b) of this subsection on the department's website and include 14
it in each auction summary report of current year vintage allowance 15
auctions. 16
(d) No less often than twice per month for suppliers and 17
quarterly for exempt fuel users, the department must issue 18
remittances to persons who submit valid documentation of exempt fuel 19
purchases. 20
(3) Rules adopted by the department under this chapter must 21
ensure that: 22
(a)(i) Suppliers of fuel for which a remittance is sought under 23
this section do not charge exempt users of dyed fuel for the costs 24
associated with compliance obligations under this chapter; and25
(ii) The price impacts of the program established under this 26
chapter are not experienced by users of exempt fuel; and27
(b) To the extent feasible, suppliers applying to the department 28
for a remittance under this section are able to do so only for dyed 29
fuel supplied to farm fuel users and agricultural product 30
transporters that qualify for an exemption under RCW 31
70A.65.080(7)(e). 32
Sec. 2. RCW 70A.65.080 and 2024 c 352 s 4 are each amended to 33
read as follows: 34
(1) A person is a covered entity as of the beginning of the first 35
compliance period and all subsequent compliance periods if the person 36
reported emissions under RCW 70A.15.2200 for any calendar year from 37
2015 through 2019, or if additional data provided as required by this 38
chapter indicates that emissions for any calendar year from 2015 39
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through 2019 equaled or exceeded any of the following thresholds, or 1
if the person is a first jurisdictional deliverer and imports 2
electricity into the state during the compliance period:3
(a) Where the person owns or operates a facility and the 4
facility's emissions equal or exceed 25,000 metric tons of carbon 5
dioxide equivalent; 6
(b) Where the person is a first jurisdictional deliverer and 7
generates electricity in the state and emissions associated with this 8
generation equals or exceeds 25,000 metric tons of carbon dioxide 9
equivalent; 10
(c)(i) Where the person is a first jurisdictional deliverer 11
importing electricity into the state and: 12
(A) For specified sources, the cumulative annual total of 13
emissions associated with the imported electricity exceeds 25,000 14
metric tons of carbon dioxide equivalent; 15
(B) For unspecified sources, the cumulative annual total of 16
emissions associated with the imported electricity exceeds 0 metric 17
tons of carbon dioxide equivalent; or 18
(C) For electricity purchased from a federal power marketing 19
administration pursuant to section 5 (b) of the Pacific Northwest 20
electric power planning and conservation act of 1980, P.L. 96-501, if 21
the department determines such electricity is not from a specified 22
source, the cumulative annual total of emissions associated with the 23
imported electricity exceeds 25,000 metric tons of carbon dioxide 24
equivalent. 25
(ii) In consultation with any linked jurisdiction to the program 26
created by this chapter, by October 1, 2026, the department, in 27
consultation with the department of commerce and the utilities and 28
transportation commission, shall adopt by rule a methodology for 29
addressing imported electricity associated with a centralized 30
electricity market; 31
(d) Where the person is a supplier of fossil fuel other than 32
natural gas and from that fuel 25,000 metric tons or more of carbon 33
dioxide equivalent emissions would result from the full combustion or 34
oxidation, excluding the amounts for fuel products that are produced 35
or imported with a documented final point of delivery outside of 36
Washington and combusted outside of Washington; and37
(e)(i) Where the person supplies natural gas in amounts that 38
would result in exceeding 25,000 metric tons of carbon dioxide 39
equivalent emissions if fully combusted or oxidized, excluding the 40
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amounts for fuel products that are produced or imported with a 1
documented final point of delivery outside of Washington and 2
combusted outside of Washington, and excluding the amounts: (A) 3
Supplied to covered entities under (a) through (d) of this 4
subsection; and (B) delivered to opt-in entities; 5
(ii) Where the person who is not a natural gas company and has a 6
tariff with a natural gas company to deliver to an end-use customer 7
in the state in amounts that would result in exceeding 25,000 metric 8
tons of carbon dioxide equivalent emissions if fully combusted or 9
oxidized, excluding the amounts: (A) Supplied to covered entities 10
under (a) through (d) of this subsection; and (B) the amounts 11
delivered to opt-in entities; 12
(iii) Where the person is an end-use customer in the state who 13
directly purchases natural gas from a person that is not a natural 14
gas company and has the natural gas delivered through an interstate 15
pipeline to a distribution system owned by the purchaser in amounts 16
that would result in exceeding 25,000 metric tons of carbon dioxide 17
equivalent emissions if fully combusted or oxidized, excluding the 18
amounts: (A) Supplied to covered entities under (a) through (d) of 19
this subsection; and (B) delivered to opt-in entities.20
(2) A person is a covered entity as of the beginning of the 21
second compliance period and all subsequent compliance periods if the 22
person reported emissions under RCW 70A.15.2200 or provided emissions 23
data as required by this chapter for any calendar year from 2023 24
through 2025, where the person owns or operates a waste to energy 25
facility utilized by a county and city solid waste management program 26
and the facility's emissions equal or exceed 25,000 metric tons of 27
carbon dioxide equivalent. 28
(3) A person is a covered entity as of the beginning of the third 29
compliance period, and all subsequent compliance periods if the 30
person reported emissions under RCW 70A.15.2200 or provided emissions 31
data as required by this chapter for 2027 or 2028, where the person 32
owns or operates a railroad company, as that term is defined in RCW 33
81.04.010, and the railroad company's emissions equal or exceed 34
25,000 metric tons of carbon dioxide equivalent. 35
(4) When a covered entity reports, during a compliance period, 36
emissions from a facility under RCW 70A.15.2200 that are below the 37
thresholds specified in subsection (1) or (2) of this section, the 38
covered entity continues to have a compliance obligation through the 39
current compliance period. When a covered entity reports emissions 40
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below the threshold for each year during an entire compliance period, 1
or has ceased all processes at the facility requiring reporting under 2
RCW 70A.15.2200, the entity is no longer a covered entity as of the 3
beginning of the subsequent compliance period unless the department 4
provides notice at least 12 months before the end of the compliance 5
period that the facility's emissions were within 10 percent of the 6
threshold and that the person will continue to be designated as a 7
covered entity in order to ensure equity among all covered entities. 8
Whenever a covered entity ceases to be a covered entity, the 9
department shall notify the appropriate policy and fiscal committees 10
of the legislature of the name of the entity and the reason the 11
entity is no longer a covered entity. 12
(5) For types of emission sources described in subsection (1) of 13
this section that begin or modify operation after January 1, 2023, 14
and types of emission sources described in subsection (2) of this 15
section that begin or modify operation after 2027, coverage under the 16
program starts in the calendar year in which emissions from the 17
source exceed the applicable thresholds in subsection (1) or (2) of 18
this section, or upon formal notice from the department that the 19
source is expected to exceed the applicable emissions threshold, 20
whichever happens first. Sources meeting these conditions are 21
required to transfer their first allowances on the first transfer 22
deadline of the year following the year in which their emissions were 23
equal to or exceeded the emissions threshold. 24
(6) For emission sources described in subsection (1) of this 25
section that are in operation or otherwise active between 2015 and 26
2019 but were not required to report emissions for those years under 27
RCW 70A.15.2200 for the reporting periods between 2015 and 2019, 28
coverage under the program starts in the calendar year following the 29
year in which emissions from the source exceed the applicable 30
thresholds in subsection (1) of this section as reported pursuant to 31
RCW 70A.15.2200 or provided as required by this chapter, or upon 32
formal notice from the department that the source is expected to 33
exceed the applicable emissions threshold for the first year that 34
source is required to report emissions, whichever happens first. 35
Sources meeting these criteria are required to transfer their first 36
allowances on the first transfer deadline of the year following the 37
year in which their emissions, as reported under RCW 70A.15.2200 or 38
provided as required by this chapter, were equal to or exceeded the 39
emissions threshold. 40
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(7) The following emissions are exempt from coverage in the 1
program, regardless of the emissions reported under RCW 70A.15.2200 2
or provided as required by this chapter: 3
(a) Emissions from the combustion of aviation fuels;4
(b) Emissions from watercraft fuels supplied in Washington that 5
are combusted outside of Washington; 6
(c) Emissions from a coal-fired electric generation facility 7
exempted from additional greenhouse gas limitations, requirements, or 8
performance standards under RCW 80.80.110; 9
(d) Carbon dioxide emissions from the combustion of biomass or 10
biofuels; 11
(e)(i) Motor vehicle fuel or special fuel that is used 12
exclusively for agricultural purposes by a farm fuel user , including 13
any such fuel regardless of whether it is dyed special fuel . This 14
exemption is available only if a buyer of motor vehicle fuel or 15
special fuel provides the seller with an exemption certificate in a 16
form and manner prescribed by the department. For the purposes of 17
this subsection, "agricultural purposes" and "farm fuel user" have 18
the same meanings as provided in RCW 82.08.865. 19
(ii) The department must determine a method for expanding the 20
exemption provided under (e)(i) of this subsection to include fuels 21
used for the purpose of transporting agricultural products on public 22
highways. The department must maintain this expanded exemption ((for 23
a period of five years, in order to provide the agricultural sector 24
with a feasible transition period)) permanently; 25
(f) Emissions from facilities with North American industry 26
classification system code 92811 (national security); and27
(g) Emissions from municipal solid waste landfills that are 28
subject to, and in compliance with, chapter 70A.540 RCW.29
(8) The department shall not require multiple covered entities to 30
have a compliance obligation for the same emissions. The department 31
may by rule authorize refineries, fuel suppliers, facilities using 32
natural gas, and natural gas utilities to provide by agreement for 33
the assumption of the compliance obligation for fuel or natural gas 34
supplied and combusted in the state. The department must be notified 35
of such an agreement at least 12 months prior to the compliance 36
obligation period for which the agreement is applicable.37
(9)(a) The legislature intends to promote a growing and 38
sustainable economy and to avoid leakage of emissions from 39
manufacturing to other locations. The legislature further intends to 40
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see innovative new businesses locate and grow in Washington that 1
contribute to Washington's prosperity and environmental objectives.2
(b) Consistent with the intent of the legislature to avoid the 3
leakage of emissions to other jurisdictions, in achieving the state's 4
greenhouse gas limits in RCW 70A.45.020, the state, including lead 5
agencies under chapter 43.21C RCW, shall pursue the limits in a 6
manner that recognizes that the siting and placement of new or 7
expanded best-in-class facilities with lower carbon emitting 8
processes is in the economic and environmental interests of the state 9
of Washington. 10
(c) In conducting a life-cycle analysis, if required, for new or 11
expanded facilities that require review under chapter 43.21C RCW, a 12
lead agency must evaluate and attribute any potential net cumulative 13
greenhouse gas emissions resulting from the project as compared to 14
other existing facilities or best available technology including 15
best-in-class facilities and emerging lower carbon processes that 16
supply the same product or end use. The department may adopt rules to 17
determine the appropriate threshold for applying this analysis.18
(d) Covered emissions from an entity that is or will be a covered 19
entity under this chapter may not be the basis for denial of a permit 20
for a new or expanded facility. Covered emissions must be included in 21
the analysis undertaken pursuant to (c) of this subsection. Nothing 22
in this subsection requires a lead agency or a permitting agency to 23
approve or issue a permit to a permit applicant, including to a new 24
or expanded fossil fuel project. 25
(e) A lead agency under chapter 43.21C RCW or a permitting agency 26
shall allow a new or expanded facility that is a covered entity or 27
opt-in entity to satisfy a mitigation requirement for its covered 28
emissions under this chapter and under any greenhouse gas emission 29
mitigation requirements for covered emissions under chapter 43.21C 30
RCW by submitting to the department the number of compliance 31
instruments equivalent to its covered emissions during a compliance 32
period. 33
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