The bill amends RCW 70A.65.110 to create a regulatory framework for emissions-intensive, trade-exposed facilities under Washington State's climate commitment act. It mandates that these facilities receive a no-cost allocation of allowances for their covered emissions if they meet specific criteria based on their classification in the North American Industry Classification System (NAICS) as of January 1, 2026. The bill outlines the process for determining emissions intensity and trade exposure, requiring the Department to adopt objective criteria by July 1, 2022. It also details the allocation of allowances based on carbon intensity and production levels, with set percentages for compliance periods from 2023 through 2034.

Additionally, the bill imposes new reporting requirements for facility operators to assess greenhouse gas emissions reduction measures, with submissions due by December 1, 2028, and every four years thereafter. It requires detailed assessments of emissions reduction projects, evaluated by an independent licensed professional engineer, while prohibiting the Department of Ecology from mandating new permanent submetering for greenhouse gas emissions sources for these assessments. The Department is also tasked with providing recommendations to the legislature by December 1, 2026, regarding future allowance schedules and policies to support emissions reduction. Notably, a section calling for an independent study on emissions and job leakage was vetoed by the Governor due to funding issues.

Statutes affected:
Original bill: 70A.65.110
Engrossed bill: 70A.65.110
Bill as passed Legislature: 70A.65.110
Session law: 70A.65.110