Climate Commitment Act.

The global warming potential of a greenhouse gas (GHG), as classified by the Department of Ecology (Ecology), is measured in terms of the equivalence to the emission of an identical volume of carbon dioxide over a 100-year timeframe (CO2e), and is also known as a carbon dioxide equivalent.  The Washington Clean Air Act requires facilities and fuel suppliers whose annual emissions exceed 10,000 metric tons of CO2e, and all electricity suppliers, to report their emissions to Ecology annually.

State law establishes the following limits on the emissions of GHGs in Washington:

• by 2020, reduce overall emissions of GHGs in the state to 1990 levels, or 90.5 million metric tons of carbon dioxide equivalents (MMT CO2e);
• by 2030, reduce overall emissions of GHGs in the state to 45 percent below 1990 levels, or 50 MMT CO2e;
• by 2040, reduce overall emissions of GHGs in the state to 70 percent below 1990 levels, or 27 MMT CO2e; and
• by 2050, reduce overall emissions of GHGs in the state to 95 percent below 1990 levels, or 5 MMT CO2e, and achieve net-zero GHG emissions.

The Climate Commitment Act (CCA) establishes a Cap-and-Invest Program.  The CCA defines those entities covered by the Cap-and-Invest Program (covered entities), those entities that may voluntarily opt in to coverage, and other persons that participate in auctions or allowance markets by purchasing, holding, selling, or voluntarily retiring compliance instruments.  

Except for no-cost allowances allocated to emissions-intensive trade-exposed facilities, electric utilities, and gas utilities, CCA allowances are distributed via periodic allowance auctions.  A portion of the no-cost allowances allocated to gas utilities are consigned to auction for the benefit of gas utility customers.  Ecology is also directed to adopt rules addressing the consignment of no-cost allowances to auction for the benefit of electric utility ratepayers, including the adoption by October 1, 2028, of an allocation schedule for the provision of no-cost allowances to electric utilities for calendar years 2031 through 2045.

Compliance obligations under the CCA are currently phased in over the following four-year compliance periods:

•  The first compliance period is 2023 through 2026.
•  The second compliance period is 2027 through 2030.
•  There will be subsequent four-year compliance periods beginning in 2031.

However, if Ecology enters into a linkage agreement with another jurisdiction with a similar GHG emission cap program, Ecology may synchronize Washington's compliance periods with the other jurisdiction.

The compliance obligation for most covered entities under the CCA began at the beginning of the first compliance period, in 2023.  However, the owner or operator of a waste-to-energy (WTE) facility utilized by a county and city solid waste management program and with GHG emissions above 25,000 metric tons begins to be a covered entity at the beginning of the second compliance period.

All covered and opt-in entities are required to submit allowances or offset credits in a timely manner to meet their compliance obligations in each compliance period.  Most CCA violations are subject to a penalty of up to $10,000 per violation per day for noncompliance, although violations of certain CCA requirements are subject to alternative penalty amounts.

Solid Waste Management.

Under the state's solid waste management laws, counties are responsible for developing solid waste management plans.  Solid waste laws establish a waste management hierarchy that prioritizes in descending order:  (1) waste reduction; (2) recycling, with source separation of recyclable materials as the preferred method; (3) energy recovery, incineration, or landfill of separated waste; and (4) energy recovery, incineration, or landfill of mixed municipal solid wastes.

Certain businesses and residential solid waste customers are subject to organic material management service requirements.  These requirements include:

• Certain businesses must arrange for organic material management services if they generate waste exceeding specified thresholds.
• Beginning in 2027, certain local governments that implement a solid waste plan must provide year-round, source-separated organic solid waste collection services to single-family residents and certain nonresidential customers.
• Beginning in 2030, persons, other than multifamily residences, may only use source-separated organic material collection services to discard unwanted organic materials for curbside disposal.

Exceptions to these organic material management requirements apply under certain circumstances, including if Ecology determines that there is no available capacity at solid waste facilities for additional organic material deliveries.

Under the 2025 Recycling Reform Act, producers of certain paper products and packaging are required to participate in and fund the operations of a producer responsibility organization with obligations for the postconsumer management of paper products and packaging and other recycling-related activities.

For GHG emissions under the CCA through 2030, Ecology must allocate no-cost allowances to a WTE facility constructed prior to 1992 that becomes a CCA covered entity at the beginning of the second compliance period, if the facility is operated in compliance with federal requirements and meets state air quality standards.  Relative to the facility's baseline average annual GHG emissions from 2021 through 2025, Ecology must allocate no cost allowances equal to 100 percent of baseline emissions for emissions years 2027 and 2028, 93 percent of baseline emissions for emissions year 2029, and 86 percent of baseline emissions for emissions year 2030.

Forty percent of the allowances allocated to the WTE facility must be consigned to auction, with proceeds to be used, with Ecology approval, for investments in projects or programs that reduce GHG emissions associated with the WTE facility.  The 60 percent of allowances that are not consigned to auction are allocated to the owner or operator of a WTE facility for the benefit of solid waste ratepayers.

Before expending proceeds from consigned allowances, the owner or operator of a WTE facility must propose to Ecology how the investments will reduce GHG emissions.  Ecology must review this proposal within 90 days, and the WTE facility owner or operator must address Ecology's comments, gain Ecology approval of its proposal, and take reasonable steps towards implementation of the proposal.

If a WTE facility’s GHG emissions exceed the no-cost allowances allocated to the facility for 2027 through 2030, the WTE facility owner or operator must acquire additional compliance instruments equal to its compliance obligation.  A WTE facility may bank unused allowances.  Ecology must withhold or withdraw the relevant share of no-cost allowances to a WTE facility if the WTE facility ceases production and closes.  If a WTE facility curtails production, it may retain but not trade allowances during the period of curtailment.

Ecology may not allocate no-cost allowances to electric utilities for GHG emissions associated with electricity produced by a WTE facility for which the WTE facility has a CCA compliance obligation.

By December 1, 2030, the owner or operator of a WTE facility constructed prior to 1992 must provide a two-part plan to Ecology and the Department of Commerce.  The greenhouse gas emission reduction portion of the plan must outline how the facility will achieve GHG emissions reductions consistent with the state emissions limits for 2040 and 2050 through any combination of GHG emission reduction strategies.  The waste reduction and material recovery portion of the plan must be consistent with the state's waste management hierarchy, take into consideration the organic material management policies that apply to local governments and businesses and the expected impacts of the 2025 Recycling Reform Act, and align with the county's local solid waste plan.  Ecology may provide technical assistance and guidance for the development and implementation of the plan.  The owner or operator of a WTE facility must consider social, environmental, and health factors in overburdened communities and vulnerable populations, and consult with local municipally created sustainability advisory groups.  The facility owner or operator must submit the plan for review by Ecology in consultation with the Department of Commerce, and must address comments received from the agencies within 120 days.  The owner or operator of a WTE facility must take reasonable steps to implement the plan and to operate the facility and take actions consistent with the goals of the plan.

The deadline for Ecology to adopt a schedule for the allocation of no-cost allowances to electric utilities for the years 2031 through 2045 is delayed by two years until October 1, 2030.