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 Department is required to establish objective criteria for determining emissions intensity and trade exposure by July 1, 2022, and the allocation of allowances will be based on carbon intensity and production levels, with defined percentages for different compliance periods.

Additionally, the bill imposes new reporting requirements for facility operators to assess and report on their greenhouse gas emissions and potential reduction measures every four years, starting December 1, 2028. It requires detailed assessments of emissions reduction projects, which must be evaluated by an independent licensed professional engineer. The Department of Ecology is prohibited from mandating new permanent submetering for greenhouse gas emissions sources for these assessments but retains authority for other purposes. Furthermore, the Department must provide recommendations to the legislature by December 1, 2026, regarding future allowance schedules and policies to mitigate emissions and job leakage, with a report on these risks due by December 1, 2028. The provisions will expire on July 1, 2029.

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