HB 1091 is the Clean Fuels Bill, reintroduced in the 2021-22 session after failing in 2020. It requires reductions in carbon emissions from transportation fuels. It is one of the legislative priorities identified at the Justice Summit. A public hearing was held on January 14 in the House Committee on Environment and Energy; see below for more details. The bill was approved by Environment and Energy and the Transportation Committee, and passed in the House by a vote of 52-46. It was approved by the Senate Environment committee and the Ways and Means Committee; it passed the Senate by a vote of 27-20.
Provisions of the bill:
- Directs the Department of Ecology (Ecology) to adopt rules establishing a Clean Fuels Program (CFP) to limit the greenhouse gas (GHG) emissions per unit of transportation fuel energy to 10 percent below 2017 levels by 2028 and 20 percent below 2017 levels by 2038.
- Directs Ecology to update, prior to 2032, CFP rules to further reduce GHG emissions from each unit of transportation fuel for each year through 2050, consistent with statutory state emission reduction limits.
- Excludes exported fuel, electricity, fuel used by vessels, railroad locomotives, and aircraft, and certain other categories of transportation fuel from the CFP’s GHG emission intensity reduction requirements.
In the legislature, amendments were introduced to make implementation of the law contingent on passing a 5 cents per gallon gas tax. But Governor Inslee, who has line-item veto authority, vetoed that section of the law so it is no longer contingent on the gas tax.
Notes from the hearing House Environment Committee of January 14, 2021
Committee Chair Fitzgibbons (D, Seattle, sponsor of the bill) noted that 2020 was hottest year, and CO2 is increasing to 40 GT annually. We are now at 90MT in WA, with the largest contributor being transportation at 45% of our emissions, which is twice as much as electricity, and much more than any other sector. He said that we cannot achieve our GHG reduction goals in RCW 70.235 without the Clean Fuels Program (CFP), and noted that CA, OR and BC have CFP programs but gas is not more expensive in OR than WA. We have developed a renewable energy program but export our biofuels to other states. WA has farms, dairies and forests that can generate biofuels. We spend money on out-of-state petroleum, but do not recover those costs. No one policy can solve climate change but we cannot be climate leader without CFP.
Testimony from 350 Spokane: with 1500 members, people in Eastern Washington see importance of CFP, which is an ideal mix on government and market mechanisms. He said we must reduce GHG, but prefer faster timeline: net neutral by 2040. “There is no vaccine for climate change.” BP America: Supports policies to reach net zero 2050, and is trending away from petroleum; but industry needs state and national policies; so BP is committed to working on legislature’s climate bills. Other supporters include Klickitat PUD (a renewable gas producer), Public Services (a recycling company), Biogas Council (a company recycling organic waste and manure and the Alliance of Automobile Automation (working on electric vehicles).
Western States Petroleum Association (WSPA) cited costs, and claimed environmental benefits are not supported by data. Washington Policy Center questioned whether CFP would improve air quality and asserted that charging stations are only in wealthy areas, drive in low-income areas. Truckers’ association asserted that CFP is a tax, added to all products transported and does nothing to support transportation infrastructure.
Other opponents included the Pipefitters Union, Operating Engineers Union and the District Labor Council, all claiming that CFP is a “tax” and a regressive tax at that. The Association of General Contractors said they would prefer joint transportation package not including CFP. Food Northwest claimed that transport costs to food processors would be passed on to families at a rate of $900 a year.
Notes on the Hearing in the House Transportation Committee, February 16, 2021
Rep. Fitzgibbons (D – Seattle, prime sponsor): Clean fuels programs are already in place in CA, OR, BC. The proposed bill would make those entities with fuels above standard emissions obtain credits from those below. Impact on prices minimal in OR (2 cents) and CA; and electrification of transportation has accelerated.
Representatives of Washington Environment Council and Washington Conservation Voters said it is a monumental bill, and transportation is the remaining sector of Washington emissons that must be addressed. Tacoma Public Utilities District said the bill will support building out charging stations. Certified Electrical Workers said electrification of transportation supports workers. Northwest Seacoast Alliance said the bill supports regional economic development and transportation. Renewable Gas Association lauded the bill for support of renewables.
Plumbers and Pipefitters Union and Operation Engineers and Contractors said bill adds costs to workers we cannot afford. District Council of Labor also cited costs and said bill diverts from other projects we need.
Notes from Senate Environment, Energy and Technology Committee Hearing March 10 2021
Staff: In 2018, Washington state had emissions of 100 MMT GHG, of which 40% were due to transportation. BC, CA and OR adopted low carbon fuel standards but WA is only one on west coast without them. HB 1091 requires a 10% reduction of GHG emissions in fuels by 2028 and 20% by 2035. The Department of Ecology (ECO) will be adopting rules commensurate with statewide goals. Goals can be met by electric vehicles and charging infrastructure. ECO adopts rules but the market determines actions, and there is no state revenue involved. Program begins in 2023 with ECO charting GHG changes and setting rules for life-cycle emissions of fuel. Any credits earned by utilities must be invested in charging stations. Representative Eriksen (R -Ferndale) asked about costs on families from this bill and other bills such as carbon taxes; staff did not have data. He said gas costs over five dollars in BC.
Representative Fitzgibbons (D – Seattle, prime sponsor) said that bill is revenue neutral, it is not a tax; it sets up process for market to achieve GHG emissions reductions. Governor’s Office said that we cannot reduce GHG emissions without addressing fuel; there will be no price spikes or supply reduction; renewable fuels such as biodiesel and electric vehicles can address problem. 350 Spokane said Eastern WA people concerned about GHG emissions and support HB 1091, and would try to apply 1091 to older vehicles. ECO said that transportation is largest source of GHG emissions and 1091 would be one of most effective means of reducing them. Washington Environmental Council said 1091 has passed House; and whole legislature passed new GHG targets for WA last year, and this bill would help meet those standards; bill would help keep biofuel jobs in state. Nature Conservancy said that the bill would be cornerstone for GHG reductions and forest conservation. Climate Solutions said that despite oil industry claims, the program works in OR and CA and GHG reductions would help reduce wildfires. Washington Physicians for Climate Action said fuel emissions reductions would help reduce health impacts of climate change. WA Healthcare Alliance said fuel pollution has severe effects on respiratory health including COVID effects, particular for BIPOC populations. Puget Sound Clean Air Agency discussed COVID and wildfire impacts on health; diesel particulates will be reduced by 1091. Neste biofuels association said clean fuels have worked in CA, reduced emissions and even some fuel costs. Chargepoint said electric vehicle chargers help reduce emissions. Alliance for Automotive Innovation said that automakers support 1091. National Biodiesel Board said biofuels provide 45% of emission reduction in CA. Tacoma Power said 1091 is a step toward decarbonization of economy through electrification. Klickitat PUD said hydrogen production would help reduce emissions. Sunrise Movement said transportation is 45% of state’s emissions, air pollution is major issue in WA. King County Transit said King County is electrifying bus fleet. Spokane City Council passed resolution on air quality, citing wildfire and windstorm problems. Issaquah City Council said 1091 will improve air quality along I-90. Seattle Port Commission said 1091 will improve air quality in BIPOC communities. League of Women Voters said clean air is necessary and carbon taxes alone are not enough. Puget Sound Partnership said that air quality and climate change have impacted seawater. SIEU Health Care cited health effects of air pollution and wildfires. IBEW mentioned transportation electrification and said biofuels would offer just transition with oil workers. UFCW (food) workers are vulnerable to air pollution. Redmond City Council said that cities need 1091 to address climate change to meet cities’ climate plans goals. Mahoney Environmental Services said members collect waste oil from restaurants for biofuels. Republic Services cited landfill methane as well as waste oil as sources of biofuels.
Washington Association for Reduction of Taxes: HB 1091 would have major impact on taxpayers who are suffering from pandemic, exacerbates income inequality. Western States Petroleum Association said costs would be too high, more than 24 cents per gallon, and GHG reductions have been minimal. Food Northwest said fuel costs would impact food suppliers, said low carbon fuel standards are least effective means of GHG reductions. Washington Trucking Association said fuel costs would raise prices for consumers from pass-through of costs. Trucks could avoid fueling in Washington. Plumbers and Pipefitters Union said WA should promote growing the economy, not this means of GHG emissions reductions. Members would lose jobs. Operating Engineers and Carpenters unions said 1091 would impact transportation funding. Washington Districts of Labor said transportation funding is necessary but low carbon fuel standards do not reduce GHG emissions. Washington Policy Center said low carbon fuel is costly and questioned environmental benefit, reduction of less than 1% with first phase. Association of Washington Business said low carbon fuel is least effective means of reducing transportation GHG emissions. Signature Transport said that fuel would increase 60 cents per gallon. PDIF Logistics would prefer fuel tax for transportation infrastructure; 1091 would not provide revenue for roads. Washington Movers’ Conference said low carbon fuel would be 60 cents more, oil prices are rising and other state actions may raise prices. Associated General Contractors said need for transportation package is clear but not 1091, which provides zero funding for infrastructure. Eastside Transportation Association said 1091 will not add funds for highway infrastructure. Washington Farm Bureau cited fuel costs and problems of biofuels in farm equipment. Former Port Commissioner mentioned fuel costs for marine and aviation uses. Agricultural Cooperative Council said that farmers will suffer from higher fuel costs. Associated Builders and Contractors said 1091 would increase costs of construction. Several farmers cited fuel costs, which would raise food prices. Washington Public Utilities District Association said ECO should not set rules but issue guidelines for utilities and cited load from charging EVs. Washington Oil Marketers’ Association said costs will be passed on for high fuel prices. Washington Association of Wheat Growers cited fuel costs that would impact wheat prices.