The bill seeks to enhance Washington's greenhouse gas emissions regulations by aligning them with the California-Quebec carbon market, thereby facilitating a linkage between the two markets. Key amendments include redefining "biomass-derived fuels" to require at least a 20% reduction in greenhouse gas emissions compared to petroleum fuels, and clarifying the definition of "electricity importer" to outline the responsibilities of entities involved in imported electricity. The legislation establishes a four-year compliance period for covered entities, introduces new rules for emissions containment reserves and auction processes, and emphasizes environmental justice and climate resilience, particularly for overburdened communities.

Additionally, the bill modifies existing compliance obligations for covered entities, including those that import electricity, and sets forth a framework for tracking and enforcing emissions limits. It allows for increased participation in emissions auctions, raising the maximum percentage of allowances a covered entity can purchase from 10% to 25%, and introduces new regulations to prevent market manipulation. The bill also outlines provisions for offset credits, compliance for emissions-intensive manufacturing businesses, and the registration and reporting of air contaminant sources. Notably, it includes a clause stating that the act will only take effect if Initiative Measure No. 2117 is not approved in the 2024 general election, ensuring that the new regulations do not conflict with existing initiatives.

Statutes affected:
Original Bill: 70A.65.010, 70A.02.010, 70A.65.070, 70A.65.110, 70A.65.100, 70A.45.020, 70A.65.170, 70A.65.200, 70A.65.310, 70A.15.2200
Substitute Bill: 70A.65.010, 70A.02.010, 70A.65.070, 70A.65.110, 70A.65.100, 70A.45.020, 70A.65.170, 70A.65.200, 70A.65.310, 70A.15.2200
Second Substitute: 70A.65.010, 70A.65.060, 70A.65.070, 70A.65.110, 70A.65.100, 70A.45.020, 70A.65.170, 70A.65.200, 70A.65.210, 70A.65.310, 70A.15.2200