Farm fuel users

AN ACT Relating to continuing to provide payments to support farm 1
fuel users and transporters for exempt fuel under the Washington 2
climate commitment act; and amending RCW 70A.65.080.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 70A.65.080 and 2024 c 352 s 4 are each amended to 5
read as follows: 6
(1) A person is a covered entity as of the beginning of the first 7
compliance period and all subsequent compliance periods if the person 8
reported emissions under RCW 70A.15.2200 for any calendar year from 9
2015 through 2019, or if additional data provided as required by this 10
chapter indicates that emissions for any calendar year from 2015 11
through 2019 equaled or exceeded any of the following thresholds, or 12
if the person is a first jurisdictional deliverer and imports 13
electricity into the state during the compliance period:14
(a) Where the person owns or operates a facility and the 15
facility's emissions equal or exceed 25,000 metric tons of carbon 16
dioxide equivalent; 17
(b) Where the person is a first jurisdictional deliverer and 18
generates electricity in the state and emissions associated with this 19
generation equals or exceeds 25,000 metric tons of carbon dioxide 20
equivalent; 21
S-1009.1
SENATE BILL 5630
State of Washington 69th Legislature 2025 Regular Session
By Senators Dozier, Boehnke, Braun, Christian, Fortunato, Goehner,
Lovick, MacEwen, McCune, Muzzall, Schoesler, Short, Torres, Trudeau,
Wagoner, and J. Wilson
Read first time 02/03/25. Referred to Committee on Environment,
Energy & Technology.
p. 1 SB 5630
(c)(i) Where the person is a first jurisdictional deliverer 1
importing electricity into the state and: 2
(A) For specified sources, the cumulative annual total of 3
emissions associated with the imported electricity exceeds 25,000 4
metric tons of carbon dioxide equivalent; 5
(B) For unspecified sources, the cumulative annual total of 6
emissions associated with the imported electricity exceeds 0 metric 7
tons of carbon dioxide equivalent; or 8
(C) For electricity purchased from a federal power marketing 9
administration pursuant to section 5 (b) of the Pacific Northwest 10
electric power planning and conservation act of 1980, P.L. 96-501, if 11
the department determines such electricity is not from a specified 12
source, the cumulative annual total of emissions associated with the 13
imported electricity exceeds 25,000 metric tons of carbon dioxide 14
equivalent. 15
(ii) In consultation with any linked jurisdiction to the program 16
created by this chapter, by October 1, 2026, the department, in 17
consultation with the department of commerce and the utilities and 18
transportation commission, shall adopt by rule a methodology for 19
addressing imported electricity associated with a centralized 20
electricity market; 21
(d) Where the person is a supplier of fossil fuel other than 22
natural gas and from that fuel 25,000 metric tons or more of carbon 23
dioxide equivalent emissions would result from the full combustion or 24
oxidation, excluding the amounts for fuel products that are produced 25
or imported with a documented final point of delivery outside of 26
Washington and combusted outside of Washington; and27
(e)(i) Where the person supplies natural gas in amounts that 28
would result in exceeding 25,000 metric tons of carbon dioxide 29
equivalent emissions if fully combusted or oxidized, excluding the 30
amounts for fuel products that are produced or imported with a 31
documented final point of delivery outside of Washington and 32
combusted outside of Washington, and excluding the amounts: (A) 33
Supplied to covered entities under (a) through (d) of this 34
subsection; and (B) delivered to opt-in entities; 35
(ii) Where the person who is not a natural gas company and has a 36
tariff with a natural gas company to deliver to an end-use customer 37
in the state in amounts that would result in exceeding 25,000 metric 38
tons of carbon dioxide equivalent emissions if fully combusted or 39
oxidized, excluding the amounts: (A) Supplied to covered entities 40
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under (a) through (d) of this subsection; and (B) the amounts 1
delivered to opt-in entities; 2
(iii) Where the person is an end-use customer in the state who 3
directly purchases natural gas from a person that is not a natural 4
gas company and has the natural gas delivered through an interstate 5
pipeline to a distribution system owned by the purchaser in amounts 6
that would result in exceeding 25,000 metric tons of carbon dioxide 7
equivalent emissions if fully combusted or oxidized, excluding the 8
amounts: (A) Supplied to covered entities under (a) through (d) of 9
this subsection; and (B) delivered to opt-in entities.10
(2) A person is a covered entity as of the beginning of the 11
second compliance period and all subsequent compliance periods if the 12
person reported emissions under RCW 70A.15.2200 or provided emissions 13
data as required by this chapter for any calendar year from 2023 14
through 2025, where the person owns or operates a waste to energy 15
facility utilized by a county and city solid waste management program 16
and the facility's emissions equal or exceed 25,000 metric tons of 17
carbon dioxide equivalent. 18
(3) A person is a covered entity as of the beginning of the third 19
compliance period, and all subsequent compliance periods if the 20
person reported emissions under RCW 70A.15.2200 or provided emissions 21
data as required by this chapter for 2027 or 2028, where the person 22
owns or operates a railroad company, as that term is defined in RCW 23
81.04.010, and the railroad company's emissions equal or exceed 24
25,000 metric tons of carbon dioxide equivalent. 25
(4) When a covered entity reports, during a compliance period, 26
emissions from a facility under RCW 70A.15.2200 that are below the 27
thresholds specified in subsection (1) or (2) of this section, the 28
covered entity continues to have a compliance obligation through the 29
current compliance period. When a covered entity reports emissions 30
below the threshold for each year during an entire compliance period, 31
or has ceased all processes at the facility requiring reporting under 32
RCW 70A.15.2200, the entity is no longer a covered entity as of the 33
beginning of the subsequent compliance period unless the department 34
provides notice at least 12 months before the end of the compliance 35
period that the facility's emissions were within 10 percent of the 36
threshold and that the person will continue to be designated as a 37
covered entity in order to ensure equity among all covered entities. 38
Whenever a covered entity ceases to be a covered entity, the 39
department shall notify the appropriate policy and fiscal committees 40
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of the legislature of the name of the entity and the reason the 1
entity is no longer a covered entity. 2
(5) For types of emission sources described in subsection (1) of 3
this section that begin or modify operation after January 1, 2023, 4
and types of emission sources described in subsection (2) of this 5
section that begin or modify operation after 2027, coverage under the 6
program starts in the calendar year in which emissions from the 7
source exceed the applicable thresholds in subsection (1) or (2) of 8
this section, or upon formal notice from the department that the 9
source is expected to exceed the applicable emissions threshold, 10
whichever happens first. Sources meeting these conditions are 11
required to transfer their first allowances on the first transfer 12
deadline of the year following the year in which their emissions were 13
equal to or exceeded the emissions threshold. 14
(6) For emission sources described in subsection (1) of this 15
section that are in operation or otherwise active between 2015 and 16
2019 but were not required to report emissions for those years under 17
RCW 70A.15.2200 for the reporting periods between 2015 and 2019, 18
coverage under the program starts in the calendar year following the 19
year in which emissions from the source exceed the applicable 20
thresholds in subsection (1) of this section as reported pursuant to 21
RCW 70A.15.2200 or provided as required by this chapter, or upon 22
formal notice from the department that the source is expected to 23
exceed the applicable emissions threshold for the first year that 24
source is required to report emissions, whichever happens first. 25
Sources meeting these criteria are required to transfer their first 26
allowances on the first transfer deadline of the year following the 27
year in which their emissions, as reported under RCW 70A.15.2200 or 28
provided as required by this chapter, were equal to or exceeded the 29
emissions threshold. 30
(7) The following emissions are exempt from coverage in the 31
program, regardless of the emissions reported under RCW 70A.15.2200 32
or provided as required by this chapter: 33
(a) Emissions from the combustion of aviation fuels;34
(b) Emissions from watercraft fuels supplied in Washington that 35
are combusted outside of Washington; 36
(c) Emissions from a coal-fired electric generation facility 37
exempted from additional greenhouse gas limitations, requirements, or 38
performance standards under RCW 80.80.110; 39
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(d) Carbon dioxide emissions from the combustion of biomass or 1
biofuels; 2
(e)(i) Motor vehicle fuel or special fuel that is used 3
exclusively for agricultural purposes by a farm fuel user. This 4
exemption is available only if a buyer of motor vehicle fuel or 5
special fuel provides the seller with an exemption certificate in a 6
form and manner prescribed by the department. For the purposes of 7
this subsection, "agricultural purposes" and "farm fuel user" have 8
the same meanings as provided in RCW 82.08.865. 9
(ii) The department must determine a method for expanding the 10
exemption provided under (e)(i) of this subsection to include fuels 11
used for the purpose of transporting agricultural products on public 12
highways. The department must maintain this expanded exemption ((for 13
a period of five years, in order to provide the agricultural sector 14
with a feasible transition period)); 15
(f) Emissions from facilities with North American industry 16
classification system code 92811 (national security); and17
(g) Emissions from municipal solid waste landfills that are 18
subject to, and in compliance with, chapter 70A.540 RCW.19
(8) The department shall not require multiple covered entities to 20
have a compliance obligation for the same emissions. The department 21
may by rule authorize refineries, fuel suppliers, facilities using 22
natural gas, and natural gas utilities to provide by agreement for 23
the assumption of the compliance obligation for fuel or natural gas 24
supplied and combusted in the state. The department must be notified 25
of such an agreement at least 12 months prior to the compliance 26
obligation period for which the agreement is applicable.27
(9)(a) The legislature intends to promote a growing and 28
sustainable economy and to avoid leakage of emissions from 29
manufacturing to other locations. The legislature further intends to 30
see innovative new businesses locate and grow in Washington that 31
contribute to Washington's prosperity and environmental objectives.32
(b) Consistent with the intent of the legislature to avoid the 33
leakage of emissions to other jurisdictions, in achieving the state's 34
greenhouse gas limits in RCW 70A.45.020, the state, including lead 35
agencies under chapter 43.21C RCW, shall pursue the limits in a 36
manner that recognizes that the siting and placement of new or 37
expanded best-in-class facilities with lower carbon emitting 38
processes is in the economic and environmental interests of the state 39
of Washington. 40
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(c) In conducting a life-cycle analysis, if required, for new or 1
expanded facilities that require review under chapter 43.21C RCW, a 2
lead agency must evaluate and attribute any potential net cumulative 3
greenhouse gas emissions resulting from the project as compared to 4
other existing facilities or best available technology including 5
best-in-class facilities and emerging lower carbon processes that 6
supply the same product or end use. The department may adopt rules to 7
determine the appropriate threshold for applying this analysis.8
(d) Covered emissions from an entity that is or will be a covered 9
entity under this chapter may not be the basis for denial of a permit 10
for a new or expanded facility. Covered emissions must be included in 11
the analysis undertaken pursuant to (c) of this subsection. Nothing 12
in this subsection requires a lead agency or a permitting agency to 13
approve or issue a permit to a permit applicant, including to a new 14
or expanded fossil fuel project. 15
(e) A lead agency under chapter 43.21C RCW or a permitting agency 16
shall allow a new or expanded facility that is a covered entity or 17
opt-in entity to satisfy a mitigation requirement for its covered 18
emissions under this chapter and under any greenhouse gas emission 19
mitigation requirements for covered emissions under chapter 43.21C 20
RCW by submitting to the department the number of compliance 21
instruments equivalent to its covered emissions during a compliance 22
period. 23
(10) The legislature intends to provide payments to support farm 24
fuel users and transporters who have purchased fuel for agricultural 25
purposes that is exempt under subsection (7)(e) of this section.26
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