In October the State of Washington will implement a program to require reduction of Green House Gas (GHG) emissions. The State Department of Ecology issued a new rule last week requiring a gradual reduction in emissions for those who, starting with 2017, emit 100,000 metric tons or more of carbon pollution. The threshold for requiring compliance gradually reduces until 2035. The “Covered GHG Emissions” include those from stationary sources, petroleum producers and importers and natural gas distributors.
The rule requires calculating emissions and keeping records for no less than ten years. There are provisions that permit trading reduction of carbon emissions called Emission Reduction Units (ERUs).
“WAC 173-442-140 Exchanging emission reduction units. Covered parties may transfer ERUs under the conditions in this section
(1) Required documentation.
(a) Documentation of an ERU transfer may consist of contractual arrangements, memoranda of understanding, or other similar records with sufficient detail to document the transfer of the ERU from one covered party to another.
(b) The transfer of ERUs occurs between accounts in the registry established in WAC 173-442-230.
(2) Tracking emission reduction units. The covered party must document each transfer of an ERU in the compliance report in a format specified by ecology and in the registry established in WAC
173-442-230.
(3) Role of third-parties in transactions.
(a) Entities other than covered parties may facilitate, broker, or assist covered parties to transfer ERUs recorded in accounts in the registry, but they may not hold ERUs.
(b) Only covered parties, ecology, and voluntary participants may hold ERUs.”
The rule also sets forth how to qualify for a reduction. Specifically, a reduction resulting from some other legal requirement does not qualify for credit under this new rule.
“WAC 173-442-150 Criteria for activities and programs generating emission reduction units.
(1) General criteria. An activity or program generating ERUs must meet all of the following criteria. Emission reductions from activities or programs must be:
(a) Real, specific, identifiable, and quantifiable;
(b) Permanent: The activity or program must result in an irrevocable and nonreversible reduction in GHGs released to the atmosphere;
(c) Enforceable by the state of Washington;
(d) Verifiable as described by WAC 173-442-210; and
(e) Additional to existing law or rule, and any supplementary re quirements necessary to meet the conditions of WAC 173-442-160 (2)(a).
(i) If an emission reduction is required by another statute, rule, or other legal requirement, the emission reduction cannot be
used in this program.
(ii) Emission reductions resulting in part or in whole from the policies below can be used to comply with the requirements of this
chapter:
(A) The EPA Clean Power Plan (40 C.F.R. Part 60, Subpart UUUU) consistent with WAC 173-442-040 (4).
(B) Washington’s GHG emission performance standard (RCW80.80.040);
(C) Washington’s CO2 mitigation standard for fossil-fueled thermal electric generation facilities (through an energy facility site evaluation council site certificate or by chapter 80.70 RCW); emission
reductions must result from mitigation projects, as defined in RCW 80.70.010; or
(D) Commute trip reduction programs as established through RCW 70.94.527 per WAC 173-442-160 (3).
(2) RCW 70.235.030 (3) establishes that CO 2 emissions from the industrial combustion of biomass in the form of fuel wood, wood waste, wood by-products, and wood residuals are carbon neutral and result in zero CO2 emissions.”