WSR 16-12-098
PROPOSED RULES
DEPARTMENT OF ECOLOGY
[Order 15-10—Filed May 31, 2016, 3:26 p.m.]
Supplemental notice to WSR 16-02-101.
Preproposal statement of inquiry was filed as WSR 15-19-115.
Title of Rule and Other Identifying Information: Ecology proposes a new rule (chapter 173-442 WAC, Clean air rule) and amendments to one existing rule (chapter 173-441 WAC, Reporting of emissions of greenhouse gases). Ecology initially filed a proposal in 2016, but withdrew the proposal to allow additional time for updating and refining the rule language in response to stakeholder input. This subsequent proposal addresses input from stakeholders. If you submitted a comment on the previous proposal, you will need to submit a new comment if you want ecology to include it in the record for this subsequent proposal. If your comment on the previous proposal has been addressed in the subsequent proposal, you do not need to resubmit your previous comment but are welcome to do so.
Hearing Location(s): Ecology is holding four public hearings on this rule proposal, one in western Washington, one in eastern Washington, and two webinars.
In-Person Hearings
The event will begin with a short presentation followed by a question and answer (Q&A) session. The hearing will start after the Q&A session and that is when ecology will accept oral comments. Staff will accept written comments at any time during the event. In-person hearings will conclude if no one has signed up to testify within thirty minutes of opening the hearing.
Eastern Washington - Evening
Date: Tuesday, July 12, 2016
Time: 6:00 p.m.
Location: The Davenport Grand Hotel
333 West Spokane Falls Boulevard
Spokane, WA 99201
Western Washington - Evening
Date: Thursday, July 14, 2016
Time: 6:00 p.m.
Location: The Red Lion Hotel
2300 Evergreen Park Drive S.W.
Olympia, WA 98502
Webinar Hearings
A webinar is an online forum accessible from any computer or smart phone with an internet connection. For more information about the webinar, and instructions on how to register and participate through the webinar, visit http://www.ecy.wa.gov/programs/air/rules/webinars.htm.
Evening Webinar
Date: Thursday, July 7, 2016
Time: 6:00 p.m.
Daytime Webinar
Date: Friday, July 15, 2016
Time: 10:00 a.m.
Ecology is offering the presentation, Q&A session, and public hearing, where we will accept oral comments, at this webinar. The webinar hearing will conclude if no one has signed up to testify within thirty minutes of opening the hearing.
For more information about the public hearings, visit our web site http://www.ecy.wa.gov/programs/air/rules/wac173442/1510inv.html.
Date of Intended Adoption: September 15, 2016 (on or after).
Submit Written Comments to: Sam Wilson, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, e-mail AQComments@ecy.wa.gov, fax (360) 407-7534, online submitted through the online comment tool http://www.ecy.wa.gov/climatechange/engagement.htm, by July 22, 2016.
Assistance for Persons with Disabilities: For special accommodations or documents in alternate format, call (360) 407-6800, 711 (relay service), or 877-833-6341 (TTY).
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Ecology proposes a new rule (chapter 173-442 WAC, Clean air rule) and amendments to one existing rule (chapter 173-441 WAC, Reporting of emissions of greenhouse gases). Chapter 173-442 WAC will establish emission standards for greenhouse gas (GHG) emissions from certain stationary sources located in Washington state, petroleum product producers or importers, and natural gas distributors in Washington state. Parties covered under this program will reduce their GHG emissions over time. A wide variety of options to reduce emissions will be available.
Ecology will amend chapter 173-441 WAC as necessary to change the emissions covered by the reporting program, modify reporting requirements, and update administrative procedures to align with the new rule (chapter 173-442 WAC, Clean air rule). Ecology is no longer proposing to revise chapter 173-400 WAC as part of this rule making.
Reasons Supporting Proposal: The purpose of this rule making is to establish GHG emission standards for certain large emitters and reduce GHG emissions to protect human health and the environment. Over the past century, GHG emissions from human activity have risen to unprecedented levels, increasing the average global temperature and the ocean's acidity. Washington has experienced long-term climate change impacts consistent with those expected from climate change. Our state faces serious economic and environmental disruption from the effects of these long-term changes including:
An increase in pollution-related illness and death due to poor air quality;
Declining water supply for drinking, agriculture, wildlife, and recreation;
An increase in tree die-off and forest mortality because of increasing wildfires, insect outbreaks, and tree diseases;
The loss of coastal lands due to sea level rise;
An increase in ocean temperature and acidity;
An increase in disease and mortality in freshwater fish (salmon, steelhead, and trout), because of warmer water temperatures in the summer and more fluctuation of water levels (river flooding and an increase of water flow in winter while summer flows decrease); and
Elevated heat stress to field crops and tree fruit due to an increase in temperatures and a decline in irrigation water.
Compliance actions to reduce GHG emissions, such as producing cleaner energy and increasing energy efficiency, potentially have the dual benefit of reducing other types of air pollution.
In 2008, Washington's legislature required the specific statewide GHG reductions (RCW 70.235.020) below.
By 2020, reduce overall emissions of GHGs in the state to 1990 levels.
By 2035, reduce overall emissions of GHGs in the state to twenty-five percent below 1990 levels.
By 2050, reduce overall emissions of GHGs in the state to fifty percent below 1990 levels or seventy percent below the state's expected emissions that year.
Consistent with the legislature's intent to reduce GHG emissions, ecology is using its existing authority under the Washington Clean Air Act to adopt a rule that limits emissions of GHGs.
Statutory Authority for Adoption: Chapters 70.94 and 70.235 RCW.
Statute Being Implemented: Chapters 70.94 and 70.235 RCW.
Rule is necessary because of state court decision, [King County Superior Court No. 14-2-25295-1].
Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: Under RCW 70.94.331, ecology may adopt rules establishing emission standards for types of emissions or types of sources of emissions, or a combination of these.
Chapter 173-442 WAC is intended to establish emission standards for GHG emissions from certain stationary sources located in Washington state, petroleum product producers or importers, and natural gas distributors in Washington state.
Ecology has made a preliminary determination that it is in the public interest and will best protect the public welfare of the state if chapter 173-442 WAC is implemented and enforced statewide solely by ecology because:
The covered parties regulated by the rule are located throughout the state; and
As the agency that crafted the rule, ecology is in the best position to ensure that the rule is implemented and enforced as intended; and
As a single agency, ecology can ensure that the rule is consistently implemented and enforced statewide.
Sole jurisdiction establishes a single regulating entity for business owners to interact with and provides greater confidence that regulatory determinations are made on an objective, impartial, and consistent basis.
Ecology is accepting comments on this issue during the formal public comment period, which ends on July 22, 2016.
Name of Proponent: Department of ecology, air quality program, governmental.
Name of Agency Personnel Responsible for Drafting: Neil Caudill, Olympia, Washington, (360) 407-6811 and Bill Drumheller, Olympia, Washington, (360) 407-7657; Implementation and Enforcement: Air Quality Program, Olympia, Washington, (360) 407-6000.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
Small Business Economic Impact Statement
Executive Summary: Based on research and analysis required by the Regulatory Fairness Act (RFA), RCW 19.85.070, ecology has determined that the proposed rule, the clean air rule (chapter 173-442 WAC) and corresponding amendments to the reporting of emissions of GHGs rule (chapter 173-441 WAC) are not likely to have a disproportionate impact on small businesses.
RFA directs ecology to determine if there is likely to be disproportionate impact, and if legal and feasible, to reduce this disproportionate impact.
The proposed rule creates a program that limits and reduces GHG emissions from certain large emission contributors, referred to as covered parties, and allowing various compliance options to meet those limitations. It also includes reporting and verification of compliance.
The proposed rule establishes GHG emissions standards for:
Stationary sources.
Petroleum product producers and/or importers.
Natural gas distributors operating in Washington state.
At the highest ownership or control level, the proposed rule is not likely to impact small businesses, defined by RFA as having fifty or fewer employees. This means that we are unable to make the comparison of per-employee compliance costs at small versus large businesses required by RFA. It also means that the proposed rule inherently is not likely to impose disproportionate costs on small businesses.
The range of employment at the highest level of ownership available for fuel importers likely covered by the proposed rule is between fifty-one - two hundred (only range available for parent entity) and eight hundred forty-five thousand (importer also covered as a stationary source and producer).
Depending on the compliance methods chosen, the proposed rule could result in between a loss of five hundred forty-four ongoing positions for twenty years (if covered parties reduce emissions using allowances from outside of the state), and a gain of nearly four thousand ongoing positions (if covered parties reduce emissions on site in the state).
Chapter 1: Background and Introduction:
1.1 Introduction: Based on research and analysis required by RFA, RCW 19.85.070, ecology has determined that the proposed rule, the clean air rule (chapter 173-442 WAC) and corresponding amendments to the reporting of emissions of GHGs rule (chapter 173-441 WAC) are not likely to have a disproportionate impact on small businesses.
RFA directs ecology to determine if there is likely to be disproportionate impact, and if legal and feasible, to reduce this disproportionate impact.
The small business economic impact statement (SBEIS) is intended to be read with the associate[d] cost-benefit and least-burdensome alternative analyses (Ecology Publication No. 16-02-008), which contains more in-depth discussion of the proposed rule and compliance costs.
1.2 Summary of the proposed rule: The proposed rule creates a program that limits and reduces GHG emissions from certain large emission contributors, referred to as covered parties, and allowing various compliance options to meet those limitations. It also includes reporting and verification of compliance.
The proposed rule establishes GHG emissions standards for:
Stationary sources.
Petroleum product producers and/or importers.
Natural gas distributors operating in Washington state.
If they meet GHG emissions thresholds that begin at one hundred thousand metric tons (MT) per year of carbon dioxide equivalent emissions in 2017, these parties have a compliance obligation to limit and reduce GHG emissions over time, through 2035. They must afterward maintain the reduction achieved in 2035. The threshold for coverage under the proposed rule drops five thousand MT every three years through 2035, increasing the number of covered parties over time.
Covered parties with compliance obligations under the proposed rule must report compliance after every three-year compliance period, and have compliance verified by a third party. They have various options for compliance, including:
Reducing their own GHG emissions.
Acquiring emissions reduction units from another covered party that has reduced GHG emissions in excess of what is required of them.
Acquiring or generating emissions reduction units from approved GHG reduction projects in Washington state.
Generating emission reduction units from approved GHG reduction programs in Washington, such as acquiring renewable energy credits (REC).
Acquiring emissions reduction units from nonregulated parties that voluntarily participate.
Purchasing allowances from established multisector carbon markets as approved by ecology.
1.3 Reasons for the proposed rule: The reason for this proposed rule is to reduce GHG emissions to protect human health and the environment. GHG emissions as a result of human activities have increased to unprecedented levels, warming the climate.1 Washington has experienced long-term climate change impacts consistent with those expected from climate change.2 Washington faces serious economic and environmental disruption from the effects of these long-term changes.
1 IPCC, 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 1535 pp.
2 Snover, A.K, G.S. Mauger, L.C. Whitely Binder, M. Krosby, and I. Tohver. 2013. Climate Change Impacts and Adaptation in Washington State: Technical Summaries for Decision Makers. State of Knowledge Report prepared for the Washington State Department of Ecology. Climate Impacts Group, University of Washington, Seattle.
For instance:
An increase in pollution-related illness and death due to poor air quality.
Declining water supply for drinking, agriculture, wildlife, and recreation.
An increase in tree die-off and forest mortality because of increasing wildfires, insect outbreaks, and tree diseases.
The loss of coastal lands because of sea level rise.
An increase in ocean temperature and ocean acidification.
An increase in disease and mortality in freshwater fish (salmon, steelhead, and trout), because of warmer water temperatures in the summer and more fluctuation of water levels (river flooding and an increase of water flow in winter while summer flows decrease).
Heat stress to field crops and tree fruit will be more prevalent because of an increase in temperatures and a decline in irrigation water.
Compliance actions to reduce GHG emissions, such as producing cleaner energy and increasing energy efficiency, have the dual benefit of reducing other types of air pollution.
In 2008, Washington's legislature required the specific statewide GHG emission reductions (RCW 70.235.020) below:
By 2020, reduce overall emissions of GHGs in the state to 1990 levels.
By 2035, reduce overall emissions of GHGs in the state to twenty-five percent below 1990 levels.
By 2050, reduce overall emissions of GHGs in the state to fifty percent below 1990 levels or seventy percent below the state's expected emissions that year.
Consistent with the legislature's intent to reduce GHG emissions, ecology is using its existing authority under the state Clean Air Act (chapter 70.94 RCW) to adopt a rule that limits GHG emissions.
Chapter 2: Analysis of Compliance Costs for Washington Businesses:
2.1 Introduction: Ecology analyzed the impacts of the proposed rule relative to business as usual (BAU), within the context of all existing requirements (federal and state laws and rules). This context for comparison is called BAU, and reflects the most likely regulatory circumstances that parties would face if the proposed rule were not adopted. It is discussed in Section 2.2, below.
2.2 BAU: BAU for our analyses generally consists of existing rules and laws, and their specific requirements. For economic analyses, BAU also includes the implementation of those regulations, including any guidelines and policies that result in behavior changes and real impacts. This is what allows us to make a consistent comparison between conditions that exist with or without the proposed new rule (chapter 173-442 WAC) and proposed amendments to the existing GHG reporting rule (chapter 173-441 WAC).
For this proposed rule making, BAU includes:
No existing GHG cap and reduction program at the state level.
The existing GHG reporting rule (chapter 173-441 WAC), which covers a subset of the parties covered by the proposed rule, and requires annual reporting and payment of fees.
The federal and Washington state clean air acts.
Existing federal and state regulations, including those covering GHG reporting at the federal level, as well as those establishing energy policy.
Existing federal and state permitting requirements and processes.
While they might otherwise have been considered part of BAU, the proposed rule explicitly exempts compliance with Washington's emissions performance standard (chapter 80.80 RCW) requirements from being considered part of BAU. The state's carbon dioxide mitigation standard and commute trip reduction programs are also excluded.
The proposed rule also considers future compliance with state implementation of the federal clean power plan (CPP) as compliance with proposed rule requirements. However, since the state has not yet completed rule making determining the specific requirements of the CPP, and since the CPP is currently being held in a stay by the supreme court, we exclude its requirements from the BAU in this analysis. This means that impacts estimated in this analysis are likely overestimated for power producers that will be required to comply with the CPP.
2.3 Proposed rule requirements:
2.3.1 Clean air rule coverage: The proposed rule establishes standards for limiting and reducing GHG emissions for:
Certain stationary sources.
Petroleum product producers or importers.
Natural gas distributors in Washington state.
2.3.2 Thresholds for compliance obligation under the proposed rule:
2.3.2.1 Existing emitters: If their covered GHG emissions are at least one hundred thousand MT per year, in carbon dioxide-equivalent units (CO2e), parties with covered GHG emissions must comply with the proposed rule starting in 2017. Emissions used for threshold comparisons are determined using a baseline emissions calculation based on past emissions during 2012 – 2016, or other relevant emissions data.
2.3.2.2 New emitters: The parties with covered GHG emissions must comply with the proposed rule starting in their first year of operation, if they exceed the following thresholds:
100,000 MT per year in years 2017 through 2019.
95,000 MT per year in years 2020 through 2022.
90,000 MT per year in years 2023 through 2025.
85,000 MT per year in years 2026 through 2028.
80,000 MT per year in years 2029 through 2031.
75,000 MT per year in years 2032 through 2034.
70,000 MT per year in 2035 and thereafter.
2.3.3 Clean air rule requirements: The proposed rule establishes the following requirements not required elsewhere in existing laws or rules:
GHG emissions standards and reductions over time.
Compliance reporting.
Verification of compliance.
Development of an emissions reduction registry and reserve.
2.3.4 Clean air rule compliance: Covered parties with compliance obligations, may comply with the proposed rule by reducing emissions in any of the following ways:
Own emissions reductions: Reduction of a covered party's own emissions below the emissions level set in the covered party's reduction pathway.
Others' emissions reductions: Other parties' reductions of emissions below their emissions reduction pathways. Reductions can also come from those voluntarily participating in the program.
Emissions reduction projects: Emissions reductions using projects, activities, or programs recognized by ecology as capable of generating emissions reduction units under the proposed rule.
o
Emission reductions from projects can come from ownership of a project or from GHG credits available in markets for environmental commodities.
o
Emission reductions from programs can come from several state-run programs, including acquiring RECs, i.e., existing energy credits generated by power producers using renewable energy production.
External emissions markets: A covered party may use allowances when ecology determines the allowances are issued by an established multisector GHG emission reduction program, the covered party is allowed to purchase allowances within that program, and the allowances are derived from methodologies congruent with chapter 173-441 WAC.
2.3.5 Corresponding amendments to other rules: Ecology is also proposing amendments to chapter 173-441 WAC (Reporting of emissions of greenhouse gases). These amendments correspond to and facilitate requirements and compliance set by the proposed rule. They include, but are not limited to, reallocation of fees:
The existing GHG emissions reporting rule (chapter 173-441 WAC) requires seventy-five percent of the reporting program's budget be paid for through facility reporter fees and twenty-five percent to be paid for through transportation fuel supplier reporter fees.
The proposed rule reallocates fees based on full payment by covered facilities, and sets a zero fee for transportation fuel suppliers. It also removes the obligation for voluntary reporters to pay the fee.
2.4 Likely compliance costs of the proposed rule: In the associated preliminary cost-benefit analysis, we estimated the likely costs associated with the proposed rule, as compared to BAU. Likely twenty year present value (if quantified) costs included:
Average twenty year present value cost of permanent reductions is between approximately $1.3 billion and $2.8 billion.
Average twenty year present value cost of reductions going toward the reserve is between approximately $30 million and $62 million.
Twenty year present value reporting costs of approximately $384,000.
Twenty year present value verification costs of between approximately $33 million and $34 million.
Twenty year present value costs of increased reporting fees of between approximately $2 million and $3 million.
Quantified external present-value costs, taking average emission reduction costs across multiple scenarios, total between $1.4 billion and $2.8 billion over twenty years.
2.5 Potential lost sales or revenue: Depending on the methods used by covered parties to reduce GHG emissions, the proposed rule may result in reduced sales for some covered parties, or other areas of the state economy. Energy efficiency projects, for example, would reduce GHG emissions by reducing energy consumption. This would reduce sales (quantities) for energy producers, but could also result in changes to energy prices (e.g., passing on regulatory costs to customers). Similarly, transportation-related methods would reduce GHG emissions by reducing fuel consumption. This would also reduce sales (quantities) for fuel suppliers, but could also result in changes to fuel prices. Reductions in fuels from one source could also be counterbalanced by increases in fuels from another source, to meet market demand.
As a result of possible shifts such as these in demand and production, ecology also expects prices to change. Depending on the relative elasticities (responsiveness of the quantity of a good supplied or demanded, relative to changes in price) of covered parties' supply and demand, overall revenues may increase or decrease as a result of these changes in demand and production. See Appendix A of the preliminary cost-benefit and least burdensome alternative analyses for more information.
Ecology could not confidently identify the mix of on-site (internal), project-based, or market acquisition-based GHG emissions reduction methods that covered parties would choose under the proposed rule, and so could not quantify the degree to which sales quantities would be impacted.
Chapter 3: Quantification of Cost Ratios:
3.1 Introduction: For this analysis, ecology must estimate and compare the compliance costs per employee at small versus large covered partiers (the largest ten percent). In this chapter, we describe the affected covered parties' employment. Employment numbers are taken at the highest ownership level, to better reflect ability to incorporate compliance costs in business-wide decision making.
At the highest ownership or control level, the proposed rule is not likely to impact small businesses, defined by RFA as having fifty or fewer employees. This means that we are unable to make the comparison of per-employee compliance costs at small versus large businesses required by RFA. It also means that the proposed rule inherently is not likely to impose disproportionate costs on small businesses.
This information is, however, based on our best knowledge of likely covered parties at the time of this publication. While we are relatively certain of the facilities and fuel suppliers affected by the rule making, there is more uncertainty about the likely fuel importers that would be covered. Section 3.2 discusses this in greater depth.
3.2 Affected businesses: Ecology determined which businesses would likely be required to comply with the proposed rule and associated rule changes. For the proposed rule, these covered parties include stationary sources, petroleum fuel producers and importers, and natural gas distributors, and for associated rule changes to the reporting fee distribution, they also include transportation fuel suppliers.
Parties are generally affected as follows:
Covered parties incur costs under the proposed rule and associated fee changes.
Transportation fuel suppliers are affected by associated changes to fees, and for these parties, fees are likely to decrease. These parties do not incur costs under the rule making.
Covered parties likely to incur costs under the proposed rule are in a variety of industries (see Chapter 6 for NAICS codes), including but not limited to some energy producers, fuel importers and commodity traders, fuel producers, chemical and metals manufacturers, pulp and paper manufacturers, food producers, natural gas distributors, and waste facilities.
The range of employment at the highest level of ownership available for parties covered by the proposed rule, excluding importers, is between one hundred sixty (parent company employment information unavailable) and 845,000.3
3 Covered party web sites, third-party data bases such as D&B and Manta, annual reports, WA Employment Security Department records.
The range of employment at the highest level of ownership available for fuel importers likely covered by the proposed rule is between fifty-one - two hundred (only range available for parent entity) and eight hundred forty-five thousand (importer also covered as a stationary source and producer).4
4 Ibid.
3.3 Cost-to-employee ratios: The proposed rule and associated proposed rule amendments do not impose costs on small businesses. The proposed rule, therefore, does not impose disproportionate costs on small businesses, and RFA does not require ecology to include elements in the proposed rule that reduce disproportionate impact.
Chapter 4: Actions Taken to Reduce the Impact of the Rule on Small Businesses: Ecology determined the proposed rule is not likely to impose disproportionate costs on small businesses, because it does not create costs for identifiable small businesses (see Chapter 3). RFA, therefore, does not require ecology to mitigate this disproportionate impact to the degree that it is both legal and feasible.
Chapter 5: Involvement of Small Businesses and Local Government in the Development of the Proposed Rule: Ecology involved small businesses or their representatives in the development of the proposed rule, as well as local governments. Ecology held five webinars during the development of the proposed rule. Their attendees/participants included multiple representatives of local governments and small businesses (directly or as part of associations), as well as legislators representing the local and business interests of their constituencies. Below is a list of attendees of these webinars, as well as participants in smaller meetings held with ecology or the Washington state governor's office.
Parties represented or representing at ecology webinars and forums:
Access Institute of Research
AEQUUS Corp.
AGC of WA
Agrium US Inc.
Alcantar & Kahl
Alcoa
Ameresco
American Carbon Registry
American Fuel & Petrochemical Manufacturers
American Lung Association
Arbaugh & Associates, Inc.
Ardargh Glass Inc.
Argus Media
Ash Grove Cement
Assoc. WA Business
ATI
Avista Corp.
Barr Engineering Co.
Benton Clean Air Agency
Benton PUD
BHAS
BlueGreen Alliance
BNSF Railway
Boeing
Boise Cascade Wood Products, LLC
Boise Paper
Bonneville Power Administration
BP
Bridgewater Group Inc.
Canadian Consulate General
Capitol Strategies
Carney Badley Spellman, PS
Cascade Government Affairs
Cascade Natural Gas Corporation, a Div. of MDU Resources Group
Cascadia Law Group PLLC
CH2M
Chelan County PUD
Chevron Corporation
City of Everett
City of Spokane
City of Walla Walla
Clark Public Utilities
Clean Energy
Climate Action Reserve
Climate Change for Families
Climate Solutions
Coalition for Renewable Natural Gas, Inc.
Communico
Community Transit
ConAgra Foods
Concrete Nor'West
Cowlitz County Public Works
Cowlitz PUD
Coyne, Jesernig, LLC
Cyan Strategies
Dave Bradley
Davis Wright Tremaine LLP
Davison Van Cleve PC
Del Monte Foods Inc.
Department of Commerce
Department of Corrections
Department of Ecology
Diane L. Dick
DNR
EES Consulting
Emerald Kalama Chemical, LLC
Energy Northwest
Energy Strategies LLC
Environmental Energy
Environmental Entrepreneurs
Enwave Seattle
ERA Environmental Management Solutions
ERM
Evergreen Carbon
ExxonMobil
Fairchild AFB
Federal Government (Air Force)
Flint Hills Resources, LP
Fluor Corporation
Forterra
Friends of Toppenish Creek
Frito Lay
Georgia-Pacific
GHG Management Institute
Go Green Tri-Cities
Gordon Thomas Honeywell Governmental Affairs
Government of British Columbia
Grant County Economic Development Council
Grant County PUD
Grant County Solid Waste
Graymont
Grays Harbor Energy
Grays Harbor PUD
Hammerschlag & Co. LLC
Hampton Affiliates
HDR Engineering
House of Representatives
House Republican Caucus
ICIS
Intalco Aluminum Corporation
Interfor
Invenergy LLC
James Lester Adcock
Janicki Bioenergy
JR Simplot Company
Julia Robinson
Kaiser Aluminum
King County
King County Solid Waste
Kinross
KUOW News Radio
Lamb Weston
LCSC
League of Women Voters
Linde
Linear Technology
Local2020
LWVWA
MFSA
Naval Base Kitsap Bangor
NAVFAC Northwest
NCASI
NextEra Energy
Nippon Paper Industries
Noble Americas Gas & Power
Northwest Clean Air Agency
Northwest Food Processors Assn.
Northwest Gas Association
Northwest Pulp & Paper Assn.
NRDC
Nucor Steel Seattle, Inc.
NW Energy Coalition
NW Natural
NW Power and Conservation Council/WA Dept. of Commerce, Energy Office
NW Seaport Alliance
NWFPA
OFM
ONRC - SEFS U of W
ORCAA
Oregon DEQ
Pacific Power
PacifiCorp
Parametrix
Perkins Coie
Phillips 66
PIRA Energy Group
Plug In America
Ponderay Newsprint Co.
Port of Seattle
PPRC
PT AirWatchers
Puget Sound Clean Air Agency
Puget Sound Energy
Puget Sound Regional Council
Rainier Veneer, Inc.
Ramboll Environ
ravel
RE Sources for Sustainable Communities
REC Silicon
REG
Renewable Northwest
Rep. Derek Kilmer
Republic Services
RNG Coalition
Ross Strategic
Rowley Properties, Inc.
s2 sustainability consultants
Saltchuk
Schwabe, Williamson & Wyatt
Schweitzer engineering laboratories
SCS Engineers
Seattle Aquarium
Seattle City Light
Seattle Public Utilities
SEH America, Inc.
SEI-US
SGL Automotive Carbon Fibers
Shell
Shuttle Express
Sierra Club
Sightline
Snohomish County
Snohomish County Public Works
Snohomish PUD
Sonoco
Sound Transit
Southshore Environmental, Inc.
Southwest Clean Air Agency
Spectrum Glass
Spokane Audubon Society
Spokane Regional Clean Air Agency
Spring Environmental, Inc.
Ste. Michelle Wine Estates
Stockholm Environment Institute
Stoel Rives
Strategies 360
SWCAA
Tacoma Power
Terre-Source LLC
Tesoro
The Climate Trust
The Evergreen State College
The News Tribune
The Northwest Seaport Alliance
The TSB Group
Thompson Consulting Group
Tidewater Barge Lines
TransAlta
TransCanada
Transportation Choices
Trinity Consultants
True North Public Affairs
Tyson Foods, Inc.
U.S. Department of Energy
Union of Concerned Scientists
United Steelworkers Local 338
University of Washington
Valero
Van Ness Feldman, LLP
Vitol Inc.
WA Food Industry Assn.
WA Oil Marketers Assn.
WA PUD Association
WaferTech, LLC
Washington Environmental Council
Washington Oil Marketers Association
Washington State House of Representatives
Washington State House Republican Caucus
Washington State Legislature
Washington State Senate
Washington State Senate Committee Services
Washington State University
Washington Trucking Associations
Waste Connections
Waterside Energy
WCV
Western Pneumatic Tube Co. LLC
Western Power Trading Forum
Western States Petroleum Association
Western Washington University
WestRock
Weyerhaeuser
WFPA
William H. Wilson, P.E. - Engineering Consulting
Williams
Williams, Northwest Pipeline LLC
WSU Energy Program
WSU Extension
WY
Yakima Regional Clean Air Agency
Individual or group stakeholder meetings (some including the office of the governor) with:
Alaska Airlines
Alcoa
Alliance (Labor, Health, environmental advocates, social equality advocates)
Ashgrove Cement
Asian Pacific Islander Coalition
Association of Washington Business (AWB)
Avista
Boeing
BNSF Railway
British Petroleum
California Air Resources Board
Clark PUD
Clean Tech Alliance
Climate Solutions
Community to Community
Coyne, Jesernig, LLC
Duwamish River Cleanup Coalition/TAG
Friends of Toppenish Creek
Front & Centered
Got Green?
Grays Harbor Energy Center
Green Diamond
House Representative Richard DeBolt
Industrial Customer of Northwest Utilities (ICNU)
Kaiser Aluminum
King County Council
Klickitat PUD
Latino Community Fund
NextGen
Northwest Energy Coalition
Northwest Pulp and Paper Association
Nucor Steel Seattle, Inc.
OneAmerica
PacifiCorp
Phillips 66
Public Generating Pool
Puget Sound Energy
Puget Sound Sage
Republic
Renewable NW
Renewable Products Marketing Group
Shell
Sierra Club
Snohomish PUD
Stockholm Environment Institute
Stoel Rives, LLP
Tacoma Power
Tesoro
TransAlta
Tulalip Tribes
Union of Concerned Scientists
U.S. Oil & Refining Co.
Valero Energy
Washington Can!
Washington Environmental Council
Washington Physicians for Social Responsibility
Washington PUD Association
Western States Petroleum Association
Weyerhaeuser
Ecology also briefed the directors of the seven local clean air agencies on the rule, during a meeting of the Washington air quality manager group.
Chapter 6: The SIC Codes of Impacted Industries: The SIC (standard industry classification) system has long been replaced by the North American Industry Classification System (NAICS). The proposed rule applies to the following NAICS for stationary sources and fuel suppliers. The covered NAICS for fuel importers is more difficult to encompass, as fuel importers may be independent, but may also be part of businesses or other entities that perform other primary functions. This broadens the list of possibly affected NAICS to at least the set of 4-digit NAICS codes, and their underlying 5+ digit codes, below.
Table 1: Likely affected business NAICS codes
2111
3241
3274
3344
4247
4841
2211
3253
3311
3364
4451
4862
3114
3272
3313
4246
4471
5622
3221
3273
3314
4247
4543
6113
Chapter 7: Impacts on Jobs: Ecology used the Washington state office of financial management's 2007 Washington input-output model5 (OFM-IO) to estimate the proposed rule's impact on jobs across the state. This includes direct, indirect, and induced (from spending of wages) jobs impacts. This methodology estimates the impact as reductions or increases in spending in certain sectors of the state economy flow through to purchases, suppliers, and demand for other goods. Direct compliance costs incurred by an industry are entered in the OFM-IO model as a decrease in spending and investment. If that compliance cost money is spent in another industry, it is entered in the model as an increase in production.6
5 WA Office of Financial Management (2007). Washington state input-output model. http://www.ofm.wa.gov/economy/io/2007/default.asp.
6 Costs that are passed through to customers are indirectly represented in this analysis; direct compliance costs are incurred by the covered entities, and not offset by price increases. Models directly representing costs that are passed through to consumers would still include the offsetting spending on on-site (internal) or project-based GHG emissions reductions, but would reduce spending across a basket of goods purchased by consumers instead of reducing output at the basket of covered entities. This type of modeling would have impacts consistent with the results above.
Cost-savings resulting from GHG emissions reduction projects that improve efficiency, or those that may benefit the public through reduced energy spending are not included in this modeling. Models representing these cost-savings would reduce negative impacts to the economy, by reducing net compliance costs for covered entities, or reducing net costs to consumers, or both. Because we could not quantify the expected cost-reductions resulting from efficiency projects, or how many such projects would be undertaken, we could not quantitatively include these cost-savings in this modeling.
Ecology estimated jobs impacts (full-time employees; FTEs), for various scenarios of how covered parties comply with the proposed rule, using high-end compliance costs of reducing carbon emissions. Because some categories of covered party contained multiple industries, we conservatively estimated net jobs impacts by assuming costs were borne by the industry with the largest jobs impact per dollar of cost, and transfers (if any) were gained by the industry with the lowest jobs impact per dollar of cost. We translated them to equivalent numbers of ongoing positions.
Depending on the compliance methods chosen, the proposed rule could result in:7
7 Note that this model does not allow for impacts of pass-through costs, shifts in demand resulting from efficiency improvements, or macroeconomic variables.
A net gain of three thousand nine hundred eighty-eight equivalent ongoing positions, if covered parties reduce emissions on site, and those payments are transferred to in-state engineering services.
A net loss of forty-three equivalent ongoing positions, if covered parties reduce emissions using in-state projects, assuming those payments are transferred to the industries of registered project developers with the lowest positive jobs impacts (to maintain conservatively high potential job loss estimates).
A net loss of five hundred forty-four equivalent ongoing positions, if covered parties reduce emissions using market allowances, assuming those payments are fully transferred out-of-state.
If covered parties reduce emissions using RECs:
o
A net loss of four hundred forty-eight equivalent ongoing positions, if payments are transferred to parties out-of-state.
o
A net gain of one hundred forty-two equivalent ongoing positions, if payments are transferred to utilities in the state.
These impacts are estimated using high-end twenty year present value compliance costs, and baseline emissions based on reported GHG emissions to date. They exclude minor contributions of reporting and verification costs. Real jobs impacts will likely result from a combination of compliance through on-site, project, and market GHG emissions reductions, and will be within this range of jobs impacts.
A copy of the statement may be obtained by contacting Kasia Patora, Economics and Regulatory Research, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6184, fax (360) 407-6989, e-mail Kasia.Patora@ecy.wa.gov.
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Kasia Patora, Economics and Regulatory Research, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6184, fax (360) 407-6989, e-mail Kasia.Patora@ecy.wa.gov.
May 31, 2016
Polly Zehm
Deputy Director
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-020 Definitions.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) Definitions specific to this chapter:
(a) "Biomass" means nonfossilized and biodegradable organic material originating from plants, animals, or microorganisms, including products, by-products, residues and waste from agriculture, forestry, and related industries as well as the nonfossilized and biodegradable organic fractions of industrial and municipal wastes, including gases and liquids recovered from the decomposition of nonfossilized and biodegradable organic material.
(b) "Carbon dioxide equivalent" or "CO2e" means a metric measure used to compare the emissions from various greenhouse gases based upon their global warming potential.
(c) "Department of licensing" or "DOL" means the Washington state department of licensing.
(d) "Director" means the director of the department of ecology.
(e) "Ecology" means the Washington state department of ecology.
(f) "Facility" unless otherwise specified in any subpart of 40 C.F.R. Part 98 as adopted by ((January 1, 2015)) May 1, 2016, means any physical property, plant, building, structure, source, or stationary equipment located on one or more contiguous or adjacent properties in actual physical contact or separated solely by a public roadway or other public right of way and under common ownership or common control, that emits or may emit any greenhouse gas. Operators of military installations may classify such installations as more than a single facility based on distinct and independent functional groupings within contiguous military properties.
(g) "Greenhouse gas," "greenhouse gases," "GHG," and "GHGs" includes carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Beginning on January 1, 2012, "greenhouse gas" also includes any other gas or gases designated by ecology by rule in Table A-1 in WAC 173-441-040.
(h) "Person" includes:
(i) An owner or operator, as those terms are defined by the United States Environmental Protection Agency in its mandatory greenhouse gas reporting regulation in 40 C.F.R. Part 98, as adopted by ((January 1, 2015)) May 1, 2016; and
(ii) A supplier.
(i) "Product data" means data related to a facility's production that is part of the annual GHG report.
(j) "Supplier" means any person who is:
(i) A motor vehicle fuel or special fuel supplier or ((a motor vehicle fuel importer)) distributor, as those terms are defined in RCW ((82.36.010;)) 82.38.020; or
(ii) ((A special fuel supplier or a special fuel importer, as those terms are defined in RCW 82.38.020; or
(iii))) A distributor of aircraft fuel, as the term is defined in RCW 82.42.010.
(2) Definitions specific to suppliers. Suppliers must use the definitions found in the following ((regulations)) statutes unless the definition is in conflict with a definition found in subsection (1) of this section. These definitions do not apply to facilities.
(a) ((WAC 308-72-800;
(b) WAC 308-77-005; and
(c) WAC 308-78-010)) Chapter 82.38 RCW; and
(b) Chapter 82.42 RCW.
(3) Definitions from 40 C.F.R. Part 98. For those terms not listed in subsection (1) or (2) of this section, the definitions found in 40 C.F.R. § 98.6 or a subpart as adopted in WAC 173-441-120, as adopted by ((January 1, 2015)) May 1, 2016, are adopted by reference as modified in WAC 173-441-120(2).
(4) Definitions from chapter 173-400 WAC. If no definition is provided in subsections (1) through (3) in this section, use the definition found in chapter 173-400 WAC.
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-050 General monitoring, reporting, recordkeeping and verification requirements.
Persons subject to the requirements of this chapter must submit GHG reports to ecology, as specified in this section.
(1) General. Follow the procedures for emission calculation, monitoring, quality assurance, missing data, recordkeeping, and reporting that are specified in each relevant section of this chapter.
(2) Schedule. The annual GHG report must be submitted as follows:
(a) Report submission due date:
(i) A person required to report GHG emissions to the United States Environmental Protection Agency under 40 C.F.R. Part 98 must submit the report required under this chapter to ecology no later than March 31st of each calendar year for GHG emissions in the previous calendar year.
(ii) A person not required to report GHG emissions to the United States Environmental Protection Agency under 40 C.F.R. Part 98 must submit the report required under this chapter to ecology no later than October 31st of each calendar year for GHG emissions in the previous calendar year.
(iii) Unless otherwise stated, if the final day of any time period falls on a weekend or a state holiday, the time period shall be extended to the next business day.
(b) Reporting requirements begin:
(i) For an existing facility or supplier that began operation before January 1, 2012, report emissions for calendar year 2012 and each subsequent calendar year.
(ii) For a new facility or supplier that begins operation on or after January 1, 2012, and becomes subject to the rule in the year that it becomes operational, report emissions beginning with the first operating month and ending on December 31st of that year. Each subsequent annual report must cover emissions for the calendar year, beginning on January 1st and ending on December 31st.
(iii) For any facility or supplier that becomes subject to this rule because of a physical or operational change that is made after January 1, 2012, report emissions for the first calendar year in which the change occurs.
(A) Facilities begin reporting with the first month of the change and ending on December 31st of that year. For a facility that becomes subject to this rule solely because of an increase in hours of operation or level of production, the first month of the change is the month in which the increased hours of operation or level of production, if maintained for the remainder of the year, would cause the facility or supplier to exceed the applicable threshold.
(B) Suppliers begin reporting January 1st and ending on December 31st the year of the change.
(C) For both facilities and suppliers, each subsequent annual report must cover emissions for the calendar year, beginning on January 1st and ending on December 31st.
(3) Content of the annual report. Each annual GHG report must contain the following information:
(a) Facility name or supplier name (as appropriate), facility or supplier ID number, and physical street address of the facility or supplier, including the city, state, and zip code. If the facility does not have a physical street address, then the facility must provide the latitude and longitude representing the geographic centroid or center point of facility operations in decimal degree format. This must be provided in a comma-delimited "latitude, longitude" coordinate pair reported in decimal degrees to at least four digits to the right of the decimal point.
(b) Year and months covered by the report.
(c) Date of submittal.
(d) For facilities, report annual emissions of each GHG (as defined in WAC 173-441-020) and each fluorinated heat transfer fluid, as follows:
(i) Annual emissions (including biogenic CO2) aggregated for all GHGs from all applicable source categories in WAC 173-441-120 and expressed in metric tons of CO2e calculated using Equation A-1 of WAC 173-441-030 (1)(b)(iii).
(ii) Annual emissions of biogenic CO2 aggregated for all applicable source categories in WAC 173-441-120, expressed in metric tons.
(iii) Annual emissions from each applicable source category in WAC 173-441-120, expressed in metric tons of each applicable GHG listed in subsections (3)(d)(iii)(A) through (F) of this section.
(A) Biogenic CO2.
(B) CO2 (including biogenic CO2).
(C) CH4.
(D) N2O.
(E) Each fluorinated GHG.
(F) For electronics manufacturing each fluorinated heat transfer fluid that is not also a fluorinated GHG as specified under WAC 173-441-040.
(iv) Emissions and other data for individual units, processes, activities, and operations as specified in the "data reporting requirements" section of each applicable source category referenced in WAC 173-441-120.
(v) Indicate (yes or no) whether reported emissions include emissions from a cogeneration unit located at the facility.
(vi) When applying subsection (3)(d)(i) of this section to fluorinated GHGs and fluorinated heat transfer fluids, calculate and report CO2e for only those fluorinated GHGs and fluorinated heat transfer fluids listed in WAC 173-441-040.
(vii) For reporting year 2014 and thereafter, you must enter into verification software specified by the director the data specified in the verification software records provision in each applicable recordkeeping section. For each data element entered into the verification software, if the software produces a warning message for the data value and you elect not to revise the data value, you may provide an explanation in the verification software of why the data value is not being revised. Whenever the use of verification software is required or voluntarily used, the file generated by the verification software must be submitted with the facility's annual GHG report.
(e) For suppliers, report the following information:
(i) Annual emissions of CO2, expressed in metric tons of CO2, as required in subsections (3)(e)(i)(A) and (B) of this section that would be emitted from the complete combustion or oxidation of the fuels reported to DOL as sold in Washington state during the calendar year.
(A) Aggregate biogenic CO2.
(B) Aggregate CO2 (including nonbiogenic and biogenic CO2).
(ii) All contact information reported to DOL not included in (a) of this subsection.
(f) A written explanation, as required under subsection (4) of this section, if you change emission calculation methodologies during the reporting period.
(g) Each data element for which a missing data procedure was used according to the procedures of an applicable subpart referenced in WAC 173-441-120 and the total number of hours in the year that a missing data procedure was used for each data element.
(h) A signed and dated certification statement provided by the designated representative of the owner or operator, according to the requirements of WAC 173-441-060 (5)(a).
(i) NAICS code(s) that apply to the facility or supplier.
(i) Primary NAICS code. Report the NAICS code that most accurately describes the facility or supplier's primary product/activity/service. The primary product/activity/service is the principal source of revenue for the facility or supplier. A facility or supplier that has two distinct products/activities/services providing comparable revenue may report a second primary NAICS code.
(ii) Additional NAICS code(s). Report all additional NAICS codes that describe all product(s)/activity(s)/service(s) at the facility or supplier that are not related to the principal source of revenue.
(j) Legal name(s) and physical address(es) of the highest-level United States parent company(s) of the owners (or operators) of the facility or supplier and the percentage of ownership interest for each listed parent company as of December 31st of the year for which data are being reported according to the following instructions:
(i) If the facility or supplier is entirely owned by a single United States company that is not owned by another company, provide that company's legal name and physical address as the United States parent company and report one hundred percent ownership.
(ii) If the facility or supplier is entirely owned by a single United States company that is, itself, owned by another company (e.g., it is a division or subsidiary of a higher-level company), provide the legal name and physical address of the highest-level company in the ownership hierarchy as the United States parent company and report one hundred percent ownership.
(iii) If the facility or supplier is owned by more than one United States company (e.g., company A owns forty percent, company B owns thirty-five percent, and company C owns twenty-five percent), provide the legal names and physical addresses of all the highest-level companies with an ownership interest as the United States parent companies and report the percent ownership of each company.
(iv) If the facility or supplier is owned by a joint venture or a cooperative, the joint venture or cooperative is its own United States parent company. Provide the legal name and physical address of the joint venture or cooperative as the United States parent company, and report one hundred percent ownership by the joint venture or cooperative.
(v) If the facility or supplier is entirely owned by a foreign company, provide the legal name and physical address of the foreign company's highest-level company based in the United States as the United States parent company, and report one hundred percent ownership.
(vi) If the facility or supplier is partially owned by a foreign company and partially owned by one or more United States companies, provide the legal name and physical address of the foreign company's highest-level company based in the United States, along with the legal names and physical addresses of the other United States parent companies, and report the percent ownership of each of these companies.
(vii) If the facility or supplier is a federally owned facility, report "U.S. Government" and do not report physical address or percent ownership.
(k) An indication of whether the facility includes one or more plant sites that have been assigned a "plant code" by either the Department of Energy's Energy Information Administration or by the Environmental Protection Agency's (EPA) Clean Air Markets Division.
(4) Emission calculations. In preparing the GHG report, you must use the calculation methodologies specified in the relevant sections of this chapter. For each source category, you must use the same calculation methodology throughout a reporting period unless you provide a written explanation of why a change in methodology was required.
(5) Verification. To verify the completeness and accuracy of reported GHG emissions, ecology may review the certification statements described in subsection (3)(h) of this section and any other credible evidence, in conjunction with a comprehensive review of the GHG reports and periodic audits of selected reporting facilities. Nothing in this section prohibits ecology from using additional information to verify the completeness and accuracy of the reports.
(6) Recordkeeping. A person that is required to report GHGs under this chapter must keep records as specified in this subsection. Retain all required records for at least three years from the date of submission of the annual GHG report for the reporting year in which the record was generated. Upon request by ecology, the records required under this section must be made available to ecology. Records may be retained off-site if the records are readily available for expeditious inspection and review. For records that are electronically generated or maintained, the equipment or software necessary to read the records must be made available, or, if requested by ecology, electronic records must be converted to paper documents. You must retain the following records, in addition to those records prescribed in each applicable section of this chapter:
(a) A list of all units, operations, processes, and activities for which GHG emissions were calculated.
(b) The data used to calculate the GHG emissions for each unit, operation, process, and activity, categorized by fuel or material type. These data include, but are not limited to, the following information:
(i) The GHG emissions calculations and methods used.
(ii) Analytical results for the development of site-specific emissions factors.
(iii) The results of all required analyses for high heat value, carbon content, and other required fuel or feedstock parameters.
(iv) Any facility operating data or process information used for the GHG emission calculations.
(c) The annual GHG reports.
(d) Missing data computations. For each missing data event, also retain a record of the cause of the event and the corrective actions taken to restore malfunctioning monitoring equipment.
(e) Owners or operators required to report under WAC 173-441-030(1) must keep a written GHG monitoring plan (monitoring plan, plan).
(i) At a minimum, the GHG monitoring plan must include the following elements:
(A) Identification of positions of responsibility (i.e., job titles) for collection of the emissions data.
(B) Explanation of the processes and methods used to collect the necessary data for the GHG calculations.
(C) Description of the procedures and methods that are used for quality assurance, maintenance, and repair of all continuous monitoring systems, flow meters, and other instrumentation used to provide data for the GHGs reported under this chapter.
(ii) The GHG monitoring plan may rely on references to existing corporate documents (e.g., standard operating procedures, quality assurance programs under appendix F to 40 C.F.R. Part 60 or appendix B to 40 C.F.R. Part 75, and other documents) provided that the elements required by (e)(i) of this subsection are easily recognizable.
(iii) The owner or operator must revise the GHG monitoring plan as needed to reflect changes in production processes, monitoring instrumentation, and quality assurance procedures; or to improve procedures for the maintenance and repair of monitoring systems to reduce the frequency of monitoring equipment downtime.
(iv) Upon request by ecology, the owner or operator must make all information that is collected in conformance with the GHG monitoring plan available for review during an audit. Electronic storage of the information in the plan is permissible, provided that the information can be made available in hard copy upon request during an audit.
(f) The results of all required certification and quality assurance tests of continuous monitoring systems, fuel flow meters, and other instrumentation used to provide data for the GHGs reported under this chapter.
(g) Maintenance records for all continuous monitoring systems, flow meters, and other instrumentation used to provide data for the GHGs reported under this chapter.
(h) Suppliers must retain any other data specified in WAC 173-441-130(5).
(7) Annual GHG report revisions.
(a) A person must submit a revised annual GHG report within forty-five days of discovering that an annual GHG report that the person previously submitted contains one or more substantive errors. The revised report must correct all substantive errors.
(b) Ecology may notify the person in writing that an annual GHG report previously submitted by the person contains one or more substantive errors. Such notification will identify each such substantive error. The person must, within forty-five days of receipt of the notification, either resubmit the report that, for each identified substantive error, corrects the identified substantive error (in accordance with the applicable requirements of this chapter) or provide information demonstrating that the previously submitted report does not contain the identified substantive error or that the identified error is not a substantive error.
(c) A substantive error is an error that impacts the quantity of GHG emissions reported or otherwise prevents the reported data from being validated or verified.
(d) Notwithstanding (a) and (b) of this subsection, upon request by a person, ecology may provide reasonable extensions of the forty-five day period for submission of the revised report or information under (a) and (b) of this subsection. If ecology receives a request for extension of the forty-five day period, by e-mail to ghgreporting@ecy.wa.gov, at least two business days prior to the expiration of the forty-five day period, and ecology does not respond to the request by the end of such period, the extension request is deemed to be automatically granted for thirty more days. During the automatic thirty-day extension, ecology will determine what extension, if any, beyond the automatic extension is reasonable and will provide any such additional extension.
(e) The owner or operator must retain documentation for three years to support any revision made to an annual GHG report.
(8) Calibration and accuracy requirements. The owner or operator of a facility that is subject to the requirements of this chapter must meet the applicable flow meter calibration and accuracy requirements of this subsection. The accuracy specifications in this subsection do not apply where either the use of company records (as defined in WAC 173-441-020(3)) or the use of "best available information" is specified in an applicable subsection of this chapter to quantify fuel usage and/or other parameters. Further, the provisions of this subsection do not apply to stationary fuel combustion units that use the methodologies in 40 C.F.R. Part 75 to calculate CO2 mass emissions. Suppliers subject to the requirements of this chapter must meet the calibration accuracy requirements in chapters 308-72, 308-77, and 308-78 WAC.
(a) Except as otherwise provided in (d) through (f) of this subsection, flow meters that measure liquid and gaseous fuel feed rates, process stream flow rates, or feedstock flow rates and provide data for the GHG emissions calculations, must be calibrated prior to January 1, 2012, using the procedures specified in this subsection when such calibration is specified in a relevant section of this chapter. Each of these flow meters must meet the applicable accuracy specification in (b) or (c) of this subsection. All other measurement devices (e.g., weighing devices) that are required by a relevant subsection of this chapter, and that are used to provide data for the GHG emissions calculations, must also be calibrated prior to January 1, 2012; however, the accuracy specifications in (b) and (c) of this subsection do not apply to these devices. Rather, each of these measurement devices must be calibrated to meet the accuracy requirement specified for the device in the applicable subsection of this chapter, or, in the absence of such accuracy requirement, the device must be calibrated to an accuracy within the appropriate error range for the specific measurement technology, based on an applicable operating standard including, but not limited to, manufacturer's specifications and industry standards. The procedures and methods used to quality-assure the data from each measurement device must be documented in the written monitoring plan, pursuant to subsection (6)(e)(i)(C) of this section.
(i) All flow meters and other measurement devices that are subject to the provisions of this subsection must be calibrated according to one of the following: You may use the manufacturer's recommended procedures; an appropriate industry consensus standard method; or a method specified in a relevant section of this chapter. The calibration method(s) used must be documented in the monitoring plan required under subsection (6)(e) of this section.
(ii) For facilities and suppliers that become subject to this chapter after January 1, 2012, all flow meters and other measurement devices (if any) that are required by the relevant subsection(s) of this chapter to provide data for the GHG emissions calculations must be installed no later than the date on which data collection is required to begin using the measurement device, and the initial calibration(s) required by this subsection (if any) must be performed no later than that date.
(iii) Except as otherwise provided in (d) through (f) of this subsection, subsequent recalibrations of the flow meters and other measurement devices subject to the requirements of this subsection must be performed at one of the following frequencies:
(A) You may use the frequency specified in each applicable subsection of this chapter.
(B) You may use the frequency recommended by the manufacturer or by an industry consensus standard practice, if no recalibration frequency is specified in an applicable subsection.
(b) Perform all flow meter calibration at measurement points that are representative of the normal operating range of the meter. Except for the orifice, nozzle, and venturi flow meters described in (c) of this subsection, calculate the calibration error at each measurement point using Equation A–2 of this subsection. The terms "R" and "A" in Equation A–2 must be expressed in consistent units of measure (e.g., gallons/minute, ft3/min). The calibration error at each measurement point must not exceed 5.0 percent of the reference value.
 
Where:
CE
=
Calibration error
(%)
R
=
Reference value
 
A
=
Flow meter response to the reference value
(c) For orifice, nozzle, and venturi flow meters, the initial quality assurance consists of in situ calibration of the differential pressure (delta-P), total pressure, and temperature transmitters.
(i) Calibrate each transmitter at a zero point and at least one upscale point. Fixed reference points, such as the freezing point of water, may be used for temperature transmitter calibrations. Calculate the calibration error of each transmitter at each measurement point, using Equation A–3 of this subsection. The terms "R," "A," and "FS" in Equation A–3 of this subsection must be in consistent units of measure (e.g., milliamperes, inches of water, psi, degrees). For each transmitter, the CE value at each measurement point must not exceed 2.0 percent of full-scale. Alternatively, the results are acceptable if the sum of the calculated CE values for the three transmitters at each calibration level (i.e., at the zero level and at each upscale level) does not exceed 6.0 percent.
 
Where:
CE
=
Calibration error
(%)
R
=
Reference value
 
A
=
Transmitter response to the reference value
FS
=
Full-scale value of the transmitter
(ii) In cases where there are only two transmitters (i.e., differential pressure and either temperature or total pressure) in the immediate vicinity of the flow meter's primary element (e.g., the orifice plate), or when there is only a differential pressure transmitter in close proximity to the primary element, calibration of these existing transmitters to a CE of 2.0 percent or less at each measurement point is still required, in accordance with (c)(i) of this subsection; alternatively, when two transmitters are calibrated, the results are acceptable if the sum of the CE values for the two transmitters at each calibration level does not exceed 4.0 percent. However, note that installation and calibration of an additional transmitter (or transmitters) at the flow monitor location to measure temperature or total pressure or both is not required in these cases. Instead, you may use assumed values for temperature and/or total pressure, based on measurements of these parameters at a remote location (or locations), provided that the following conditions are met:
(A) You must demonstrate that measurements at the remote location(s) can, when appropriate correction factors are applied, reliably and accurately represent the actual temperature or total pressure at the flow meter under all expected ambient conditions.
(B) You must make all temperature and/or total pressure measurements in the demonstration described in (c)(ii)(A) of this subsection with calibrated gauges, sensors, transmitters, or other appropriate measurement devices. At a minimum, calibrate each of these devices to an accuracy within the appropriate error range for the specific measurement technology, according to one of the following: You may calibrate using a manufacturer's specification or an industry consensus standard.
(C) You must document the methods used for the demonstration described in (c)(ii)(A) of this subsection in the written GHG monitoring plan under subsection (6)(e)(i)(C) of this section. You must also include the data from the demonstration, the mathematical correlation(s) between the remote readings and actual flow meter conditions derived from the data, and any supporting engineering calculations in the GHG monitoring plan. You must maintain all of this information in a format suitable for auditing and inspection.
(D) You must use the mathematical correlation(s) derived from the demonstration described in (c)(ii)(A) of this subsection to convert the remote temperature or the total pressure readings, or both, to the actual temperature or total pressure at the flow meter, or both, on a daily basis. You must then use the actual temperature and total pressure values to correct the measured flow rates to standard conditions.
(E) You must periodically check the correlation(s) between the remote and actual readings (at least once a year), and make any necessary adjustments to the mathematical relationship(s).
(d) Fuel billing meters are exempted from the calibration requirements of this section and from the GHG monitoring plan and recordkeeping provisions of subsections (6)(e)(i)(C) and (g) of this section, provided that the fuel supplier and any unit combusting the fuel do not have any common owners and are not owned by subsidiaries or affiliates of the same company. Meters used exclusively to measure the flow rates of fuels that are used for unit startup are also exempted from the calibration requirements of this section.
(e) For a flow meter that has been previously calibrated in accordance with (a) of this subsection, an additional calibration is not required by the date specified in (a) of this subsection if, as of that date, the previous calibration is still active (i.e., the device is not yet due for recalibration because the time interval between successive calibrations has not elapsed). In this case, the deadline for the successive calibrations of the flow meter must be set according to one of the following: You may use either the manufacturer's recommended calibration schedule or you may use the industry consensus calibration schedule.
(f) For units and processes that operate continuously with infrequent outages, it may not be possible to meet the deadline established in (a) of this subsection for the initial calibration of a flow meter or other measurement device without disrupting normal process operation. In such cases, the owner or operator may postpone the initial calibration until the next scheduled maintenance outage. The best available information from company records may be used in the interim. The subsequent required recalibrations of the flow meters may be similarly postponed. Such postponements must be documented in the monitoring plan that is required under subsection (6)(e) of this section.
(g) If the results of an initial calibration or a recalibration fail to meet the required accuracy specification, data from the flow meter must be considered invalid, beginning with the hour of the failed calibration and continuing until a successful calibration is completed. You must follow the missing data provisions provided in the relevant missing data sections during the period of data invalidation.
(9) Measurement device installation. 40 C.F.R. § 98.3(j) and 40 C.F.R. § 98.3(d) as adopted by ((January 1, 2015)) May 1, 2016, are adopted by reference as modified in WAC 173-441-120(2).
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-080 Standardized methods and conversion factors incorporated by reference.
(1) The materials incorporated by reference by EPA in 40 C.F.R. § 98.7, as adopted by ((January 1, 2015)) May 1, 2016, are incorporated by reference in this chapter for use in the sections of this chapter that correspond to the sections of 40 C.F.R. Part 98 referenced here.
(2) Table A–2 of this section provides a conversion table for some of the common units of measure used in this chapter.
Table A-2:
Units of Measure Conversions
To convert from
To
Multiply by
Kilograms (kg)
Pounds (lbs)
2.20462
Pounds (lbs)
Kilograms (kg)
0.45359
Pounds (lbs)
Metric tons
4.53592 x 10-4
Short tons
Pounds (lbs)
2,000
Short tons
Metric tons
0.90718
Metric tons
Short tons
1.10231
Metric tons
Kilograms (kg)
1,000
Cubic meters (m3)
Cubic feet (ft3)
35.31467
Cubic feet (ft3)
Cubic meters (m3)
0.028317
Gallons (liquid, US)
Liters (l)
3.78541
Liters (l)
Gallons (liquid, US)
0.26417
Barrels of liquid fuel (bbl)
Cubic meters (m3)
0.15891
Cubic meters (m3)
Barrels of liquid fuel (bbl)
6.289
Barrels of liquid fuel (bbl)
Gallons (liquid, US)
42
Gallons (liquid, US)
Barrels of liquid fuel (bbl)
0.023810
Gallons (liquid, US)
Cubic meters (m3)
0.0037854
Liters (l)
Cubic meters (m3)
0.001
Feet (ft)
Meters (m)
0.3048
Meters (m)
Feet (ft)
3.28084
Miles (mi)
Kilometers (km)
1.60934
Kilometers (km)
Miles (mi)
0.62137
Square feet (ft2)
Acres
2.29568 x 10-5
Square meters (m2)
Acres
2.47105 x 10-4
Square miles (mi2)
Square kilometers (km2)
2.58999
Degrees Celsius (°C)
Degrees Fahrenheit (°F)
°C = (5/9) x (°F - 32)
Degrees Fahrenheit (°F)
Degrees Celsius (°C)
°F = (9/5) x (°C + 32)
Degrees Celsius (°C)
Kelvin (K)
K = °C + 273.15
Kelvin (K)
Degrees Rankine (°R)
1.8
Joules
Btu
9.47817 x 10-4
Btu
MMBtu
1 x 10-6
Pascals (Pa)
Inches of Mercury (in Hg)
2.95334 x 10-4
Inches of Mercury (in Hg)
Pounds per square inch (psi)
0.49110
Pounds per square inch (psi)
Inches of Mercury (in Hg)
2.03625
NEW SECTION
WAC 173-441-085 Third-party verification.
The owner or operator of a facility that exceeds the compliance threshold under WAC 173-442-030 or voluntarily participating under WAC 173-442-030(6) must have the facility's annual GHG reports verified by a third party as specified in this section.
(1) Annual GHG reports must be third-party verified each emissions year that:
(a) The facility has a GHG emission reduction pathway under WAC 173-442-060;
(b) The facility is voluntarily participating under WAC 173-442-030(6);
(c) Is part of a baseline calculation for a new entrant after 2020 under WAC 173-442-050 (1)(b); or
(d) For the first year after no longer meeting the requirements of (a) through (c) of this subsection unless the operations of the facility are changed such that all applicable GHG emitting processes and operations listed in WAC 173-441-120 permanently cease to operate.
(2) Emissions subject to third-party verification. All covered GHG emissions under chapter 173-442 WAC are subject to the requirements of this section.
(3) Verification standards. The third-party verifier must certify that annual GHG reports meet the following conditions:
(a) Annual GHG reports must be consistent with the relevant requirements and methods in this chapter.
(b) The absolute value of any discrepancy, omission, or misreporting, or aggregation of the three, must be less than five percent of total reported covered emissions (metric tons of CO2e) or the verification will result in an adverse verification statement. This standard also separately applies to any covered product data in the annual GHG report.
(i) "Discrepancies" means any differences between the reported covered emissions or covered product data and the third-party verifier's review of covered emissions or covered product data for a data source or product data subject to this section.
(ii) "Omissions" means any covered emissions or covered product data the third-party verifier concludes must be part of the annual GHG report, but were not included by the reporting entity in the annual GHG report.
(iii) "Misreporting" means duplicate, incomplete or other covered emissions the third-party verifier concludes should, or should not, be part of the annual GHG report or duplicate or other product data the verifier concludes should not be part of the annual GHG report.
(iv) "Total reported covered emissions or covered product data" means the total annual reporting entity covered emissions or total reported covered product data for which the third-party verifier is conducting an assessment.
(4) Verification services.
(a) Full verification is required at least once every three reporting years. The first year of third-party verification for a facility must be full verification. An owner or operator may choose to obtain less intensive verification services for the remaining two years in the three-year period as long as:
(i) No year in the three-year period has an adverse verification statement;
(ii) The third-party verifier can provide findings with a reasonable level of assurance;
(iii) There has not been a change in the third-party verifier;
(iv) There has not been a change in operational control of the facility; and
(v) There has not been a significant change in sources or emissions. A difference in emissions of greater than twenty-five percent relative to the preceding year's emissions is considered significant unless that change can be directly shown to result from a verifiable change in product data.
(b) Full verification. A full verification report must be in a format specified by ecology and contain:
(i) Documentation identifying the facility reporting emissions and the scope of emissions verified in the report.
(ii) Documentation identifying the third-party verifier, including all relevant information about the third-party verifier in subsection (7)(a) of this section and the names, roles, and sector specific qualifications (if any) of all individuals working on the verification report.
(iii) Documentation demonstrating and certifying that the requirements of subsection (7)(b) and (c) of this section have been met.
(iv) A verification plan that details the data and methodologies used to verify the annual GHG report and schedule describing when the verification services occurred. This must include a sampling plan that describes how the third-party verifier prioritized which emissions to verify and a summary of the data checks used to determine the reliability of the annual GHG report. Full verification requires a more complete sampling of data and additional data checks than less intensive verification.
(v) Documentation of the third-party verifier's review of facility operations to identify applicable GHG emissions sources and product data. Any applicable GHG emissions sources or product data not included in the annual GHG report must be identified. The third-party verifier must also ensure that the reported current NAICS code(s) accurately represents the activities on-site.
(vi) Documentation of any corrections made to the annual GHG report.
(vii) Documentation supporting the third-party verifiers' findings evaluating if the annual GHG report is compliant with the requirements in subsection (3) of this section. This must include a log of any issues (if any) identified in the course of verification, their potential impact on the quality of the annual GHG report, and their resolution.
(viii) The individuals conducting the third-party verification must certify that the verification report is true, accurate, and complete to the best of their knowledge and belief.
(ix) Information about the required on-site visit, including date(s) and a description of the verification services conducted on-site. At least one accredited verifier in the verification team, including the sector specific verifier, if applicable, must at a minimum make one site visit, during each year full verification is required. The third-party verifier must visit the headquarters or other location of central data management when the facility is a supplier of petroleum products or supplier of natural gas and natural gas liquids. During the site visit, the third-party verifier must:
(A) Confirm that all applicable emissions are included in the annual GHG report.
(B) Check that all sources specified in the annual GHG report are identified appropriately.
(C) Review and understand the data management systems used by the owners or operators to track, quantify, and report GHG emissions and, when applicable, product data and fuel transactions. The third-party verifier must evaluate the uncertainty and effectiveness of these systems.
(D) Interview key personnel.
(E) Make direct observations of equipment for data sources and equipment supplying data for sources determined to be high risk.
(F) Assess conformance with measurement accuracy, data capture, and missing data substitution requirements.
(G) Review financial transactions to confirm fuel, feedstock, and product data, and confirming the complete and accurate reporting of required data such as facility fuel suppliers, fuel quantities delivered, and if fuel was received directly from an interstate pipeline.
(c) Less intensive verification. A less intensive verification report must be in a format specified by ecology and meet the requirements of subsection (4)(b)(i) through (viii) of this section. Less intensive verification of an annual GHG report allows for less detailed data checks and document reviews of the annual GHG report based on the analysis and risk assessment in the most current sampling plan developed as part of the most current full verification.
(5) Annual GHG report corrections. Owners or operators subject to this section must correct errors in their annual GHG report.
(a) Corrections are required if errors are identified by:
(i) The third-party verifier;
(ii) The owner or operator;
(iii) Ecology; or
(iv) EPA.
(b) The owner or operator must fix all correctable errors that affect covered emissions, noncovered emissions, or covered product data in the submitted emissions data report, and submit a revised emissions data report to ecology. Failure to do so will result in an adverse verification statement.
(c) Failure to fix correctable errors that do not affect covered emissions, noncovered emissions, or covered product data represents a nonconformance with this chapter but does not, absent other errors, result in an adverse verification statement.
(d) The owner or operator must maintain documentation to support any revisions made to the initial emissions data report. Documentation for all emissions data report submittals must be retained by the reporting entity for ten years.
(6) Timing. The third-party verifier must submit a complete verification report to ecology for each year as required under subsection (1) of this section no later than one hundred fifty days after the report submission due date for the facility, specified in WAC 173-441-050(2) for GHG emissions occurring in the previous calendar year. Any corrections to the annual GHG report or verification report must be submitted to ecology no later than forty-five days after discovery of the error. Records must be retained following the requirements of WAC 173-441-050(6).
(7) Eligible third-party verifiers.
(a) Owners or operators subject to this section must have their annual GHG report verified by a third-party verifier certified by ecology. Certification requires:
(i) Registering as a third-party verifier with ecology. Registration is required for both the verification organization and all individuals performing verification services for the verification organization.
(ii) Demonstrating to ecology's satisfaction that the third-party verifier has sufficient knowledge of the relevant methods and protocols in this chapter. Certification may be limited to certain types or sources of emissions.
(iii) Active accreditation or recognition as a third-party verifier under at least one of the following GHG programs:
(A) California ARB's Mandatory Reporting of Greenhouse Gas Emissions program;
(B) The Climate Registry;
(C) Climate Action Reserve;
(D) American National Standards Institute (ANSI); or
(E) Other GHG verification standard approved by ecology.
(b) An owner or operator must not use the same third-party verifier (either organization or individuals) for a period of more than six consecutive years. The owner or operator must wait at least three years before using the previous third-party verifier to verify their annual GHG reports.
(c) An owner or operator and third-party verifier must certify that there is not a conflict of interest in verifying the annual GHG report. The potential for a conflict of interest must be deemed to be high where:
(i) The third-party verifier and facility share any management staff or board of directors membership, or any of the senior management staff of the facility have been employed by the third-party verifier, or vice versa, within the previous five years; or
(ii) Any employee of the third-party verifier, or any employee of a related entity, or a subcontractor who is a member of the verification team has provided to the facility any services within the previous five years.
(iii) Any staff member of the third-party verifier provides any type of incentive to a facility to secure a verification services contract.
(8) Ecology verification. Ecology retains full authority in determining if an annual GHG report contains a discrepancy, omission, or misreporting, or any aggregation of the three, that impacts the verification status of the annual GHG report. Ecology may issue an adverse verification statement for an annual GHG report even if the annual GHG report has received a positive verification statement from the third-party verifier. Ecology may also issue an adverse verification statement for:
(a) Failure to submit a complete annual GHG report in a timely manner;
(b) Failure to complete third-party verification if required by this subsection; or
(c) Other forms of noncompliance with this chapter.
NEW SECTION
WAC 173-441-086 Assigned emissions level.
(1) Ecology may assign an emissions level to any annual GHG report that:
(a) Failed to submit a complete annual GHG report by the report submission due date, specified in WAC 173-441-050(2);
(b) Failed to meet the third-party verification requirements in WAC 173-441-085;
(c) Has an adverse verification statement; or
(d) Ecology determines the absolute value of any discrepancy, omission, or misreporting, or aggregation of the three, is at least five percent of total reported covered emissions (metric tons of CO2e). This standard also separately applies to any covered product data in the annual GHG report.
(i) "Discrepancies" means any differences between the reported covered emissions or covered product data and ecology's review of covered emissions or covered product data for a data source or product data.
(ii) "Omissions" means any covered emissions or covered product data ecology concludes must be part of the annual GHG report, but were not included by the reporting entity in the annual GHG report.
(iii) "Misreporting" means duplicate, incomplete or other covered emissions ecology concludes should, or should not, be part of the annual GHG report or duplicate or other product data ecology concludes should not be part of the annual GHG report.
(iv) "Total reported covered emissions or covered product data" means the total annual reporting entity covered emissions or total reported covered product data for which ecology is conducting an assessment.
(2) The assigned emissions level must be used when determining compliance with chapter 173-442 WAC.
(3) Ecology must use conservative assumptions when setting the assigned emissions level to avoid underestimating emissions in a compliance year or overestimating emissions in a baseline year.
(a) Within five working days of a written request by ecology, the third-party verifier (if applicable) must provide any available verification services information or correspondence related to the emissions data.
(b) Within five working days of a written request by ecology, the owner or operator of a facility must provide the data that is required to calculate GHG emissions for the facility according to the requirements of this chapter, the preliminary or final detailed verification report prepared by the third-party verifier (if applicable), and other information requested by ecology, including the operating days and hours of the facility during the data year. The owner or operator must also make available personnel who can assist ecology's determination of an assigned emissions level for the data year.
(4) Ecology may adjust the assigned emissions level if the owner or operator is able to obtain a positive verification statement for the annual GHG report at a later date.
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-090 Compliance and enforcement.
(1) Violations. Any violation of any requirement of this chapter must be a violation of chapter 70.94 RCW and subject to enforcement as provided in that chapter. A violation includes, but is not limited to, failure to report GHG emissions by the reporting deadline, failure to report accurately, failure to collect data needed to calculate GHG emissions, failure to continuously monitor and test as required, failure to retain records needed to verify the amount of GHG emissions, failure to calculate GHG emissions following the methodologies specified in this chapter, failure to have the annual GHG report third-party verified, and failure to pay the required reporting fee. Each day and each metric ton CO2e of emissions of a violation constitutes a separate violation.
(2) Enforcement responsibility. Ecology must enforce the requirements of this chapter unless ecology approves a local air authority's request to enforce the requirements for persons operating within the authority's jurisdiction.
AMENDATORY SECTION (Amending WSR 10-24-108, filed 12/1/10, effective 1/1/11)
WAC 173-441-110 Fees.
(1) Fee determination. All persons required to report ((or voluntarily reporting)) under WAC 173-441-030(1) must pay a reporting fee for each year they submit a report to ecology. Ecology must establish reporting fees based on workload using the process outlined below. The fees must be sufficient to cover ecology's costs to administer the GHG emissions reporting program.
(2) Fee eligible activities. All costs of activities associated with administering this reporting program, as described in RCW 70.94.151(2), are fee eligible.
(3) Workload analysis and budget development. Each biennium, ecology must conduct a workload analysis and develop a budget based on the process outlined below:
(a) Ecology must conduct a workload analysis projecting resource requirements for administering the reporting program, organized by categories of fee eligible activities, for the purpose of preparing the budget. Ecology must prepare the workload analysis for the two-year period corresponding to each biennium. The workload analysis must identify the fee eligible administrative activities related to the reporting program that it will perform during the biennium and must estimate the resources required to perform these activities.
(b) Ecology must prepare a budget for administering the reporting program for the two-year period corresponding to each biennium. Ecology must base the budget on the resource requirements identified in the workload analysis for the biennium and must take into account the reporting program account balance at the start of the biennium.
(4) Allocation methodology. ((Ecology must allocate the reporting program budget among the persons required to report or voluntarily reporting under WAC 173-441-030 according to the following components:
(a))) The reporting fee for an owner or operator of a facility required to report ((or voluntarily reporting)) under WAC 173-441-030(1) is calculated by the equal division of ((seventy-five percent of)) the budget amount by the total number of facilities ((reporting)) required to report GHG emissions under this chapter in a given calendar year. A person required to report ((or voluntarily reporting)) multiple facilities under WAC 173-441-030(1) must pay a fee for each facility reported.
(((b) The reporting fee for a supplier required to report or voluntarily reporting under WAC 173-441-030 is calculated by the equal division of twenty-five percent of the budget amount by the total number of suppliers reporting GHG emissions under this chapter in a given calendar year.
(c) A person required to report or voluntarily reporting under WAC 173-441-030 both as an owner or operator of a facility or facilities and as a supplier must pay a fee for each facility reported and a fee for reporting as a supplier.))
(5) Fee schedule. Ecology must issue annually a fee schedule reflecting the reporting fee to be paid per facility or supplier. Ecology must base the fee schedule on the budget and workload analysis described above and conducted each biennium. Ecology must publish the fee schedule for the following year on or before October 31st of each year.
(6) Fee payments. Fees specified in this section must be paid within sixty days of receipt of ecology's billing statement. All fees collected under this chapter must be made payable to the Washington department of ecology. A late fee surcharge of fifty dollars or ten percent of the fee, whichever is more, may be assessed for any fee received after ninety days past the due date for fee payment.
(7) Dedicated account. Ecology must deposit all reporting fees they collect in the air pollution control account.
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-120 Calculation methods incorporated by reference from 40 C.F.R. Part 98 for facilities.
Owners and operators of facilities that are subject to this chapter must follow the requirements of this chapter and all subparts of 40 C.F.R. Part 98 listed in Table 120-1 of this section. If a conflict exists between a provision in WAC 173-441-050(3) through 173-441-080 and any applicable provision of this section, the requirements of this section must take precedence.
(1) Source categories and calculation methods for facilities. An owner or operator of a facility subject to the requirements of this chapter must report GHG emissions, including GHG emissions from biomass, from all applicable source categories in Washington state listed in Table 120-1 of this section using the methods incorporated by reference in Table 120-1. Table 120-1 and subsection (2) of this section list modifications and exceptions to calculation methods adopted by reference in this section. ((CO2 collected and transferred off-site must be included in the emissions calculation as required under WAC 173-441-030 (1)(b)(iv) using the methods established in 40 C.F.R. Part 98 Subpart PP as adopted by January 1, 2015. Owners or operators are not required to comply with requirements in Subpart PP that do not address CO2 collected and transferred off-site.))
Table 120-1:
Source Categories and Calculation Methods
Incorporated by Reference from 40 C.F.R. Part 98 for Facilities
Source Category
40 C.F.R. Part 98 Subpart*
Exceptions to Calculation Method or
Applicability Criteria+#
General Stationary Fuel Combustion
Sources
C
 
Electricity Generation
D
 
Adipic Acid Production
E
 
Aluminum Production
F
 
Ammonia Manufacturing
G
 
Cement Production
H
 
Electronics Manufacturing
I
In § 98.91, replace "To calculate total annual GHG emissions for comparison to the 25,000 metric ton CO2e per year emission threshold in paragraph § 98.2 (a)(2), follow the requirements of § 98.2(b), with one exception" with "To calculate GHG emissions for comparison to the emission threshold in WAC 173-441-030(1), follow the requirements of WAC 173-441-030 (1)(b), with one exception."
Ferroalloy Production
K
 
Fluorinated Gas Production
L
In § 98.121, replace "To calculate GHG emissions for comparison to the 25,000 metric ton CO2e per year emission threshold in § 98.2 (a)(2)" with "To calculate GHG emissions for comparison to the emission threshold in WAC 173-441-030(1)."
Glass Production
N
 
HCFC-22 Production and HFC-23
Destruction
O
 
Hydrogen Production
P
 
Iron and Steel Production
Q
 
Lead Production
R
 
Lime Manufacturing
S
 
Magnesium Production
T
 
Miscellaneous Uses of Carbonate
U
 
Nitric Acid Production
V
 
Petroleum and Natural Gas Systems
W
§ 98.231(a) should read: "You must report GHG emissions under this subpart if your facility contains petroleum and natural gas systems and the facility meets the requirements of WAC 173-441-030(1)."
Petrochemical Production
X
 
Petroleum Refineries
Y
 
Phosphoric Acid Production
Z
 
Pulp and Paper Manufacturing
AA
 
Silicon Carbide Production
BB
 
Soda Ash Manufacturing
CC
 
Electrical Transmission and
Distribution Equipment Use
DD
§ 98.301 should read: "You must report GHG emissions under this subpart if your facility contains any electrical transmission and distribution equipment use process and the facility meets the requirements of WAC 173-441-030(1)." See subsection (2)(f) of this section.
Titanium Dioxide Production
EE
 
Underground Coal Mines
FF
 
Zinc Production
GG
 
Municipal Solid Waste Landfills
HH
CO2 from combustion of landfill gas must also be included in calculating emissions for reporting and determining if the reporting threshold is met.
Industrial Wastewater Treatment
II
CO2 from combustion of wastewater biogas must also be included in calculating emissions for reporting and determining if the reporting threshold is met.
Manure Management
JJ
See subsection (2)(e) of this section.
Suppliers of Coal-Based Liquid Fuels
LL
§ 98.380(b) should read: "An importer or exporter shall have the same meaning given in WAC 173-441-120 (2)(h)." § 98.381 should include: "Reporting of exports is voluntary."
Suppliers of Petroleum Products
MM
§ 98.391 should read: "Any refiner or importer that meets the requirements of WAC 173-441-030(1) must report GHG emissions. Any exporter of petroleum products and natural gas liquids may report GHG emissions associated with exported petroleum products using the methods established in this subpart." See subsection (2)(h) of this section.
Suppliers of Natural Gas and Natural Gas Liquids
NN
§ 98.401 should read: "Any supplier of natural gas and natural gas liquids that meets the requirements of WAC 173-441-030(1) must report GHG emissions."
Suppliers of Industrial Greenhouse Gases
OO
§ 98.411 should include: "Reporting of exports is voluntary."
Suppliers of Carbon Dioxide
PP
((Owners or operators are only required to calculate and report emissions specified in WAC 173-441-030 (1)(b)(iv).)) § 98.421 should read: "Any supplier of CO2 who meets the requirements of WAC 173-441-030(1) must report the mass of CO2 captured, extracted, or imported. The mass of CO2 exported may be reported using the methods established in this subpart."
Importers and Exporters of Fluorinated Greenhouse Gases Contained in Pre-Charged Equipment or Closed-Cell Foams
QQ
§ 98.431 should read: "Any importer of fluorinated GHGs contained in pre-charged equipment or closed-cell foams who meets the requirements of WAC 173-441-030(1) must report each fluorinated GHG contained in the imported pre-charged equipment or closed-cell foams. Any exporter of fluorinated GHGs contained in pre-charged equipment or closed-cell foams may report GHG emissions associated with exported products using the methods established in this subpart."
Geologic Sequestration of Carbon Dioxide
RR
§ 98.441(a) should read: "You must report GHG emissions under this subpart if any well or group of wells within your facility injects any amount of CO2 for long-term containment in subsurface geologic formations and the facility meets the requirements of WAC 173-441-030(1)."
Electrical Equipment Manufacture or
Refurbishment
SS
§ 98.451 should read: "You must report GHG emissions under this subpart if your facility contains an electrical equipment manufacturing or refurbishing process and the facility meets the requirements of WAC 173-441-030(1)."
Industrial Waste Landfills
TT
CO2 from combustion of landfill gas must also be included in calculating emissions for reporting and determining if the reporting threshold is met.
Injection of Carbon Dioxide
UU
§ 98.471 should read: "(a) You must report GHG emissions under this subpart if your facility contains an injection of carbon dioxide process and the facility meets the requirements of WAC 173-441-030(1). For purposes of this subpart, any reference to CO2 emissions in WAC 173-441-030 means CO2 received."
*
Unless otherwise noted, all calculation methods are from 40 C.F.R. Part 98, as adopted by ((January 1, 2015)) May 1, 2016.
+
Modifications and exceptions in subsection (2) of this section and WAC 173-441-010 through 173-441-050(2) also apply.
#
Whenever the use of verification software is required or voluntarily used, the file generated by the verification software must be submitted with the facility's annual GHG report.
(2) Modifications and exceptions to calculation methods adopted by reference. Except as otherwise specifically provided:
(a) Wherever the term "administrator" is used in the rules incorporated by reference in this chapter, the term "director" must be substituted.
(b) Wherever the term "EPA" is used in the rules incorporated by reference in this chapter, the term "ecology" must be substituted.
(c) Wherever the term "United States" is used in the rules incorporated by reference in this chapter, the term "Washington state" must be substituted.
(d) Wherever a calculation method adopted by reference in Table 120-1 of this section or a definition adopted by reference from 40 C.F.R. Part 98.6 refers to another subpart or paragraph of 40 C.F.R. Part 98:
(i) If Table 120-2 of this section lists the reference, then replace the reference with the corresponding reference to this chapter as specified in Table 120-2.
(ii) If the reference is to a subpart or subsection of a reference listed in Table 120-2 of this section, then replace the reference with the appropriate subsection of the corresponding reference to this chapter as specified in Table 120-2.
(iii) If the reference is to a subpart or paragraph of 40 C.F.R. Part 98 Subparts C through UU incorporated by reference in Table 120-1, then use the existing reference except as modified by this chapter.
(e) For manure management, use the following subsections instead of the corresponding subsections in 40 C.F.R. § 98.360 as adopted by ((January 1, 2015)) May 1, 2016.
(i) 40 C.F.R. § 98.360(a): This source category consists of livestock facilities with manure management systems.
(A) § 98.360 (a)(1) is not adopted by reference.
(B) § 98.360 (a)(2) is not adopted by reference.
(ii) 40 C.F.R. § 98.360(b): A manure management system (MMS) is a system that stabilizes and/or stores livestock manure, litter, or manure wastewater in one or more of the following system components: Uncovered anaerobic lagoons, liquid/slurry systems with and without crust covers (including, but not limited to, ponds and tanks), storage pits, digesters, solid manure storage, dry lots (including feedlots), high-rise houses for poultry production (poultry without litter), poultry production with litter, deep bedding systems for cattle and swine, manure composting, and aerobic treatment.
(iii) 40 C.F.R. § 98.360(c): This source category does not include system components at a livestock facility that are unrelated to the stabilization and/or storage of manure such as daily spread or pasture/range/paddock systems or land application activities or any method of manure utilization that is not listed in § 98.360(b) as modified in WAC 173-441-120 (2)(e)(ii).
(iv) 40 C.F.R. § 98.360(d): This source category does not include manure management activities located off-site from a livestock facility or off-site manure composting operations.
(v) 40 C.F.R. § 98.361: Livestock facilities must report GHG emissions under this subpart if the facility contains a manure management system as defined in 98.360(b) as modified in WAC 173-441-120 (2)(e)(ii), and meets the requirements of WAC 173-441-030(1).
(vi) 40 C.F.R. § 98.362 (b) and (c) are not adopted by reference.
(vii) 40 C.F.R. § 98.362(a), 40 C.F.R. § 98.363 through 40 C.F.R. § 98.368, Equations JJ-2 through JJ-15, and Tables JJ-2 through JJ-7 as adopted by ((January 1, 2015)) May 1, 2016, remain unchanged unless otherwise modified in this chapter.
(viii) CO2 from combustion of gas from manure management must also be included in calculating emissions for reporting and determining if the reporting threshold is met.
(f) For electrical transmission and distribution equipment use facilities where the electrical power system crosses Washington state boundaries, limit the GHG report to emissions that occur in Washington state using one of the following methods:
(i) Direct, state specific measurements;
(ii) Prorate the total emissions of the electric power system based upon either nameplate capacity or transmission line miles in the respective service areas by state using company records. Update the nameplate capacity or transmission line miles factor each reporting year and include the data used to establish the nameplate capacity or transmission line miles factor with your annual GHG report((.));
(iii) Prorate the total emissions of the electric power system based upon population in the respective service areas by state using the most recent U.S. Census data. Update the population factor each reporting year and include the data used to establish the population factor with your annual GHG report.
(g) Use the following method to obtain specific version or date references for any reference in 40 C.F.R. Part 98 that refers to any document not contained in 40 C.F.R. Part 98:
(i) If the reference in 40 C.F.R. Part 98 includes a specific version or date reference, then use the version or date as specified in 40 C.F.R. Part 98.
(ii) If the reference in 40 C.F.R. Part 98 does not include a specific version or date reference, then use the version of the referenced document as available on the date of adoption of this chapter.
(h) For suppliers of petroleum products or coal-based liquid fuels, use the following subsections instead of the corresponding subsections in 40 C.F.R. § 98.390 as adopted by May 1, 2016.
(i) 40 C.F.R. § 98.390: Definition of the source category.
This source category consists of petroleum refineries and importers and exporters of petroleum products and natural gas liquids as listed in Table MM-1 of this subpart.
(A) A petroleum refinery for the purpose of this subpart is any facility engaged in producing petroleum products through the distillation of crude oil.
(B) A refiner is the owner or operator of a petroleum refinery.
(C) Importer has the same meaning given in subsection (2)(h)(ii) of this section and includes any entity that imports petroleum products, natural gas liquids, or coal-based liquid fuels as listed in Table MM-1 of this subpart. Any blender or refiner of refined or semi-refined petroleum products shall be considered an importer if it otherwise satisfies the aforementioned definition.
(D) Exporter has the same meaning given in subsection (2)(h)(ii) of this section and includes any entity that exports petroleum products, natural gas liquids, or coal-based liquid fuels as listed in Table MM-1 of this subpart. Any blender or refiner of refined or semi-refined petroleum products shall be considered an exporter if it otherwise satisfies the aforementioned definition.
(ii) Definitions specific to imports and exports:
(A) Export means to transport a product from inside Washington state to persons outside Washington state, excluding any such transport on behalf of the United States military including foreign military sales under the Arms Export Control Act. The final distribution of the product must occur outside of Washington state.
(B) Exporter means any person, company or organization of record that transfers for sale or for other benefit, products from Washington state to another state, country, or to an affiliate in another country, excluding any such transfers on behalf of the United States military or military purposes including foreign military sales under the Arms Export Control Act. The final distribution of the product must occur outside of Washington state. An exporter is not the entity merely transporting the domestic products, rather an exporter is the entity deriving the principal benefit from the transaction.
(C) Import means, to land on, bring into, or introduce into, any place subject to the jurisdiction of Washington state.
(D) Importer means any person, company, or organization of record that for any reason brings a product into Washington state from a different state or foreign country, excluding introduction into Washington state jurisdiction exclusively for United States military purposes. The term includes, as appropriate:
(I) The consignee.
(II) The importer of record.
(III) The actual owner.
(IV) The transferee, if the right to draw merchandise in a bonded warehouse has been transferred.
(iii) Each importer shall report all information at the state level.
(iv) Each exporter choosing to report emissions associated with exported products to ecology under these subparts shall report all information at the state level:
(v) Exporters choosing to report emissions associated with exported products to ecology under these subparts and refineries and importers must report information for each product where emissions were calculated.
Table 120-2:
Corresponding References in 40 C.F.R. Part 98 and
Chapter 173-441 WAC
Reference in 40 C.F.R. Part 98
Corresponding Reference in Chapter 173-441 WAC
Section
Topic
Section
Topic
40 C.F.R. Part 98 or "part"
Mandatory Greenhouse Gas Reporting
Chapter 173-441 WAC
Reporting of Emissions of Greenhouse Gases
Subpart A
General Provision
WAC 173-441-010 through 173-441-100
General Provisions
§ 98.1
Purpose and scope
WAC 173-441-010
Scope
§ 98.2
Who must report?
WAC 173-441-030
Applicability
§ 98.2(a)
Applicability: Facility reporting
WAC 173-441-030(1)
Applicability: Facility reporting
§ 98.2 (a)(1)
Applicability: Facility reporting Table A-3
WAC 173-441-030(1)
Applicability: Facility reporting
§ 98.2 (a)(2)
Applicability: Facility reporting Table A-4
WAC 173-441-030(1)
Applicability: Facility reporting
§ 98.2 (a)(3)
Applicability: Facility reporting source categories that meet all three of the conditions listed in this paragraph (a)(3)
WAC 173-441-030(1)
Applicability: Facility reporting
§ 98.2 (a)(4)
Applicability: Facility reporting Table A-5 source categories
WAC 173-441-030(1)
Applicability: Facility reporting
§ 98.2(b)
Calculating emissions for comparison to the threshold
WAC 173-441-030 (1)(b)
Calculating facility emissions for comparison to the threshold
§ 98.2(i)
Reporting requirements when emissions of greenhouse gases fall below reporting thresholds
WAC 173-441-030(5)
Reporting requirements when emissions of greenhouse gases fall below reporting thresholds
§ 98.3
What are the general monitoring, reporting, recordkeeping and verification requirements of this part?
WAC 173-441-050
General monitoring, reporting, recordkeeping and verification requirements
§ 98.3(c)
Content of the annual report
WAC 173-441-050(3)
Content of the annual report
§ 98.3(g)
Recordkeeping
WAC 173-441-050(6)
Recordkeeping
§ 98.3 (g)(5)
A written GHG monitoring plan
WAC 173-441-050 (6)(e)
A written GHG monitoring plan
§ 98.3(i)
Calibration accuracy requirements
WAC 173-441-050(8)
Calibration and accuracy requirements
§ 98.3 (i)(6)
Calibration accuracy requirements: Initial calibration
WAC 173-441-050 (8)(f)
Calibration accuracy requirements: Initial calibration
§ 98.4
Authorization and responsibilities of the designated representative
WAC 173-441-060
Authorization and responsibilities of the designated representative
§ 98.5
How is the report submitted?
WAC 173-441-070
Report submittal
§ 98.5(b)
Verification software
WAC 173-441-070(1)
Facility report submittal
§ 98.6
Definitions
WAC 173-441-020
Definitions
§ 98.7
What standardized methods are incorporated by reference into this part?
WAC 173-441-080
Standardized methods and conversion factors incorporated by reference
§ 98.8
What are the compliance and enforcement provisions of this part?
WAC 173-441-090
Compliance and enforcement
§ 98.9
Addresses
WAC 173-441-100
Addresses
Table A-1 to Subpart A of Part 98—Global Warming Potentials, Table A-1 of this part, or Table A-1 of this subpart
Global Warming Potentials
Table A-1 of WAC 173-441-040
Global Warming Potentials
Table A-2 to Subpart A of Part 98—Units of Measure Conversions
Units of Measure Conversions
Table A-2 of WAC 173-441-080
Units of Measure Conversions
(3) Calculation methods for voluntary reporting. GHG emissions reported voluntarily under WAC 173-441-030(4) must be calculated using the following methods:
(a) If the GHG emissions have calculation methods specified in Table 120-1 of this section, use the methods specified in Table 120-1.
(b) If the GHG emissions have calculation methods specified in WAC 173-441-130, use the methods specified in WAC 173-441-130.
(c) For all GHG emissions from facilities not covered in Table 120-1 of this section or persons supplying any product other than those listed in WAC 173-441-130, contact ecology for an appropriate calculation method no later than one hundred eighty days prior to the emissions report deadline established in WAC 173-441-050(2) or submit a petition for alternative calculation methods according to the requirements of WAC 173-441-140.
(4) Alternative calculation methods approved by petition. An owner or operator may petition ecology to use calculation methods other than those specified in Table 120-1 of this section to calculate its facility GHG emissions. Such alternative calculation methods must be approved by ecology prior to reporting and must meet the requirements of WAC 173-441-140.
AMENDATORY SECTION (Amending WSR 15-04-051, filed 1/29/15, effective 3/1/15)
WAC 173-441-130 Calculation methods for suppliers.
Suppliers of ((liquid)) motor vehicle fuel, special fuel, or aircraft fuel subject to the requirements of this chapter must calculate the CO2 emissions that would result from the complete combustion or oxidation of each fuel that is reported to DOL as sold in Washington state using the methods in this section.
(1) Applicable fuels. Suppliers are responsible for calculating CO2 emissions from the following applicable fossil fuels and biomass derived fuels:
(a) All taxed ((liquid)) motor vehicle fuel that the supplier is required to report to DOL as part of the supplier's filed periodic tax reports of motor vehicle fuel sales under chapter ((308-72 WAC)) 82.38 RCW.
(b) All taxed special fuel that the supplier is required to report to DOL as part of the supplier's filed periodic tax reports of special fuel sales under chapter ((308-77 WAC)) 82.38 RCW.
(c) All taxed and untaxed aircraft fuel supplied to end users that the supplier is required to report to DOL as part of the supplier's filed periodic tax reports of aircraft fuel under chapter ((308-78 WAC)) 82.42 RCW.
(2) Calculating CO2 emissions separately for each fuel type. CO2 emissions must be calculated separately for each applicable fuel type using Equation 130-1 of this section. Use Equation 130-2 of this section to separate each blended fuel into pure fuel types prior to calculating emissions using Equation 130-1.
 
Where:
CO2i
=
Annual CO2 emissions that would result from the complete combustion or oxidation of each fuel type "i" (metric tons)
Fuel Typei
=
Annual volume of fuel type "i" supplied by the supplier (gallons).
EFi
=
Fuel type-specific CO2 emission factor (metric tons CO2 per gallon) found in Table 130-1 of this section.
 
Where:
Fuel Typei
=
Annual volume of fuel type "i" supplied by the supplier (gallons).
Fueli
=
Annual volume of blended fuel "i" supplied by the supplier (gallons).
%Voli
=
Percent volume of product "i" that is fuel typei.
(3) Calculating total CO2 emissions. A supplier must calculate total annual CO2 emissions from all fuels using Equation 130-3 of this section.
 
Where:
CO2x
=
Annual CO2 emissions that would result from the complete combustion or oxidation of all fuels (metric tons).
CO2i
=
Annual CO2 emissions that would result from the complete combustion or oxidation of each fuel type "i" (gallons).
(4) Monitoring and QA/QC requirements. Comply with all monitoring and QA/QC requirements under chapters 308-72, 308-77, and 308-78 WAC.
(5) Data recordkeeping requirements. In addition to the annual GHG report required by WAC 173-441-050 (6)(c), the following records must be retained by the supplier in accordance with the requirements established in WAC 173-441-050(6):
(a) For each fuel type listed in Table 130-1 of this section, the annual quantity of applicable fuel in gallons of pure fuel supplied in Washington state.
(b) The CO2 emissions in metric tons that would result from the complete combustion or oxidation of each fuel type for which subsection (5)(a) of this section requires records to be retained, calculated according to subsection (2) of this section.
(c) The sum of biogenic CO2 emissions that would result from the complete combustion oxidation of all supplied fuels, calculated according to subsection (3) of this section.
(d) The sum of nonbiogenic and biogenic CO2 emissions that would result from the complete combustion oxidation of all supplied fuels, calculated according to subsection (3) of this section.
(e) All records required under chapters 308-72, 308-77, and 308-78 WAC in the format required by DOL.
Table 130-1:
Emission Factors for Applicable ((Liquid)) Motor Vehicle Fuels, Special Fuels, and Aircraft Fuels
Fuel Type (pure fuel)
Emission Factor
(metric tons CO2 per gallon)
Gasoline
 
0.008960
Ethanol (E100)
 
0.005767
Diesel
 
0.010230
Biodiesel (B100)
 
0.009421
Propane
 
0.005593
Natural gas
 
0.000055*
Kerosene
 
0.010150
Jet fuel
 
0.009750
Aviation gasoline
 
0.008310
Contact ecology to obtain an emission factor for any applicable fuel type not listed in this table.
*In units of metric tons CO2 per scf. When using Equation 130-1 of this section, enter fuel in units of scf.
Chapter  173-442  WAC
CLEAN AIR RULE
SECTION 1 - OVERVIEW
NEW SECTION
WAC 173-442-010 Scope.
This rule establishes GHG emissions standards starting in 2017 for:
• Certain stationary sources.
• Petroleum product producers and importers.
• Natural gas distributors.
NEW SECTION
WAC 173-442-020 Definitions.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) Definitions.
(a) "Actual emissions" means GHG emissions reported under chapter 173-441 WAC except for emissions exempted under WAC 173-442-040.
(b) "Baseline GHG emissions value" means a value defined by WAC 173-442-050.
(c) "Calendar year" means January 1 through December 31.
(d) "Carbon dioxide equivalent" or "CO2 equivalent" or "CO2e" means a metric measure used to compare the emissions from various GHGs based upon their global warming potential. Ecology uses the global warming potential values listed in WAC 173-441-040 to determine the CO2 equivalent of emissions.
(e) "Compliance obligation" means the value calculated using WAC 173-442-200(3).
(f) "Compliance period" means a consecutive three-year period beginning in 2017 (2017 through 2019), and continuing forward (2020 through 2022; 2023 through 2025; etc.).
(g) "Compliance report" means the report required by WAC 173-442-210.
(h) "Compliance threshold" means the emission levels in WAC 173-442-030(3).
(i) "Covered GHG emissions" means any of the following:
(i) "Covered stationary source GHG emissions" means GHG emissions from source categories listed in WAC 173-441-120. This includes emissions voluntarily reported under chapter 173-441 WAC using methods established in WAC 173-441-120.
(ii) "Covered petroleum product producer or importer GHG emissions" means CO2 emissions that result from the complete combustion or oxidation of products covered under the Suppliers of Petroleum Products, 40 C.F.R. Part 98, Subpart MM, source category listed in WAC 173-441-120. This includes emissions voluntarily reported under chapter 173-441 WAC using methods established in WAC 173-441-120.
(iii) "Covered natural gas distributor GHG emissions" means CO2 emissions that result from the complete combustion or oxidation of products covered under WAC 173-441-120. This includes:
(A) Natural gas and natural gas liquids listed under 40 C.F.R. Part 98, Subpart NN; and
(B) Emissions voluntarily reported under chapter 173-441 WAC.
(iv) Exemptions are listed in WAC 173-442-040.
(j) "Covered party" means the owner or operator of a:
(i) Stationary source located in Washington;
(ii) Petroleum product producer in Washington or importer to Washington; or
(iii) Natural gas distributor in Washington.
(k) "Curtailment" means the cessation of production at a stationary source greater than four consecutive months in a calendar year. Curtailment does not include the following activities:
(i) Cessation of production to:
(A) Perform routine maintenance;
(B) Perform nonroutine maintenance;
(C) Make capital improvements to the covered party's facility; or
(D) Perform facility life extension projects.
(ii) Electric generating units are ineligible for this provision.
(l) "EITE covered party" means a covered party with a primary North American Industry Classification System (NAICS) code included in the following list:
(i) 311411: Frozen fruit, juice, and vegetable manufacturing;
(ii) 311423: Dried and dehydrated food manufacturing;
(iii) 311611: Animal (except poultry) slaughtering;
(iv) 322110: Pulp mills;
(v) 322121: Paper (except newsprint) mills;
(vi) 322122: Newsprint mills;
(vii) 322130: Paperboard mills;
(viii) 325188: All other basic inorganic chemical manufacturing;
(ix) 325199: All other basic organic chemical manufacturing;
(x) 325311: Nitrogenous fertilizer manufacturing;
(xi) 327211: Flat glass manufacturing;
(xii) 327213: Glass container manufacturing;
(xiii) 327310: Cement manufacturing;
(xiv) 327410: Lime manufacturing;
(xv) 327420: Gypsum product manufacturing;
(xvi) 327992: Ultra high purity silicon manufacturing;
(xvii) 331111: Iron and steel mills;
(xviii) 331312: Primary aluminum production;
(xix) 331315: Aluminum sheet, plate, and foil manufacturing;
(xx) 331419: Primary smelting and refining of nonferrous metal (except copper and aluminum);
(xxi) 334413: Semiconductor and related device manufacturing;
(xxii) 336411: Aircraft manufacturing;
(xxiii) 336413: Other aircraft parts and auxiliary equipment manufacturing.
(m) "Emission reduction unit" or "ERU" means one unit equivalent to one metric ton of CO2e. An emission reduction unit is composed of any GHG listed in WAC 173-441-040, or, for the purposes of using WAC 173-442-160 (6)(b), destroyed chlorofluorocarbons or hydrochlorofluorocarbons.
(n) "Emission reduction pathway" means the annual reduction requirement established in WAC 173-442-060 and 173-442-070.
(o) "Emission reduction requirement" means a covered party's limit in MT CO2e for a compliance period based on the sum of the GHG emission reduction pathways for that period.
(p) "Independent qualified organization" means an organization identified by the energy facility site evaluation council as meeting the requirements of RCW 80.70.050.
(q) "Renewable energy credit" means a tradable certificate of proof of an eligible renewable resource that is verified by the renewable energy credit tracking system identified in WAC 194-37-210(1) and which includes all of the nonpower attributes associated with that electricity as identified in RCW 19.285.030.
(r) "Reserve" means an account established by ecology to ensure consistency with an aggregate emission reduction limit for the program and for purposes consistent with this chapter.
(s) "Vintage year" means the calendar year in which an ERU is first recorded, or, in the case of an allowance, the year designated as the vintage year for that allowance by the external program supplying the allowance.
(2) Definitions from chapter 173-441 WAC. If subsection (1) of this section provides no definition, the definition found in chapter 173-441 WAC applies.
(3) Definitions from chapter 173-400 WAC. If subsections (1) and (2) of this section provide no definition, the definition found in chapter 173-400 WAC applies.
(4) Acronym list.
CO2 means carbon dioxide.
CO2e means carbon dioxide equivalent.
EITE means energy intensive and trade exposed.
ERU means an emission reduction unit.
GHG means greenhouse gas.
MT means metric ton.
MT CO2e means metric ton of carbon dioxide equivalent.
REC means Renewable Energy Credit.
SECTION 2 - APPLICABILITY REQUIREMENTS
NEW SECTION
WAC 173-442-030 Applicability.
Who does this rule apply to?
(1) Emission reduction requirements apply to a covered party when their baseline GHG emissions value is greater than or equal to the compliance threshold in the corresponding compliance period in Table 1 of this section. An EITE covered party's baseline GHG emissions for applicability under this section is established in WAC 173-442-070 (2)(c).
(2) Exception. Applicability to this chapter begins no earlier than 2020 for EITE covered parties and petroleum product importers.
(3) Compliance threshold. A covered party with covered GHG emissions that are greater than or equal to the compliance threshold in Table 1 must comply with their compliance obligation under WAC 173-442-200.
Table 1
Compliance Threshold
Compliance Threshold
(MT CO2e/Year)
First Compliance Period
(Calendar Year)
100,000
2017-19
95,000
2020-22
90,000
2023-25
85,000
2026-28
80,000
2029-31
75,000
2032-34
70,000
2035 and beyond
(4) Whenever there is any change that affects covered GHG emissions, a covered party must reevaluate whether this chapter applies. Changes include, but are not limited to:
(a) Revised emissions calculations or other calculations;
(b) Process modifications;
(c) Changes in operating hours;
(d) Changes in production;
(e) Changes in fuel or raw material use;
(f) Addition of equipment;
(g) Source expansion;
(h) Changes in the compliance threshold; and
(i) Changes to this chapter.
(5) A covered party is not subject to the requirements in this section:
(a) After three consecutive years of covered GHG emissions less than 50,000 MT CO2e; and
(b) Compliance with the requirements in WAC 173-442-210(7).
(6) Voluntary participation.
(a) An entity with covered GHG emissions below the compliance threshold during a compliance period can choose to participate voluntarily in this chapter. A voluntary participant must comply with the requirements for a covered party except that a voluntary participant does not have a GHG emission reduction requirement.
(b) Opt-out.
(i) A voluntary party who elected to become a covered party by voluntarily participating in this chapter may decide later to return to exempt status.
(ii) For a voluntary party to opt-out of this chapter and for it to be effective, the voluntary party must complete all actions specified below.
(A) The actions must be completed and documentation submitted in a format specified by ecology.
(B) A voluntary covered party that wishes to opt-out of this program must apply to ecology by September 1 of the last year of a compliance period.
(iii) Notification requirements.
(A) Provide a ninety-day notice of intent to opt-out and a proposed effective date for the completion of the opt-out process; and
(B) Submit a final compliance report.
NEW SECTION
WAC 173-442-040 Exemptions.
(1) Covered GHG emissions do not include:
(a) The following subparts referenced in Table 120-1 in WAC 173-441-120;
(i) Manure Management: Subpart JJ;
(ii) Suppliers of Coal-Based Liquid Fuels: Subpart LL;
(iii) Suppliers of Industrial Greenhouse Gases: Subpart OO;
(iv) Importers and Exporters of Fluorinated Greenhouse Gases Contained in Pre-Charged Equipment or Closed-Cell Foams: Subpart QQ.
(b) CO2 from industrial combustion of biomass in the form of fuel wood, wood waste, wood by-products, and wood residuals, as provided in RCW 70.235.020(3);
(c) CO2 that is converted into mineral form and that is not emitted into the atmosphere; and
(d) Emissions from a coal-fired baseload electric generation facility in Washington that emitted more than one million tons of GHGs in any calendar year prior to 2008, as provided in RCW 80.80.040(3).
(2) Covered GHG emissions from petroleum product producer or importer do not include:
(a) CO2 emissions that would result from the complete combustion or oxidation of the following products as specified in 40 C.F.R. Part 98, Table MM-1, as adopted by May 1, 2016:
(i) Kerosene-type jet fuel;
(ii) Residual fuel oil No. 5 (navy special);
(iii) Residual fuel oil No. 6 (a.k.a. bunker C);
(iv) Petrochemical feedstocks: Naphthas (< 401 °F);
(v) Petrochemical feedstocks: Other oils (> 401 °F);
(vi) Lubricants;
(vii) Waxes; and
(viii) Asphalt and road oil.
(b) CO2 emissions that result from the complete combustion or oxidation of products when all of the following occur:
(i) The products are exported from Washington;
(ii) Final distribution of the product occurs outside of Washington; and
(iii) The GHG emissions associated with exported petroleum products are voluntarily reported in compliance with chapter 173-441 WAC.
(3) Covered GHG emissions for a natural gas distributor do not include:
(a) Emissions from the combustion or oxidation of products supplied to a covered party that has an emission reduction requirement; or
(b) Units or processes exempted in subsection (4) of this section.
(4) Stationary sources included in the Clean Power Plan (40 C.F.R. Part 60 Subpart UUUU) will be considered to comply with the requirements of this chapter at the beginning of the first compliance period of the Clean Power Plan provided that:
(a) EPA has approved Washington's implementation plan;
(b) The approved implementation plan requires greater GHG emissions reduction than required under 40 C.F.R. Part 60, Subpart UUUU; and
(c) When a unit within a covered party's facility is subject to the Clean Power Plan, then only the GHG emissions from that unit(s) are covered under this subsection.
NEW SECTION
WAC 173-442-050 Baseline GHG emissions value for non-EITE covered parties.
(1) Ecology must assign a baseline GHG emissions value to each non-EITE covered party. Covered parties fall into two categories:
(a) Category 1. A covered party with covered GHG emissions averaging greater than or equal to 70,000 MT CO2e per year during calendar years 2012 through 2016; or
(b) Category 2. A covered party which:
(i) Is a voluntary participant who chooses to participate in the program;
(ii) Did not operate between calendar years 2012 through 2016;
(iii) Had average covered GHG emissions less than 70,000 MT CO2e per year during calendar years 2012 through 2016; or
(iv) Is a petroleum product importer. This only applies to covered GHG emissions associated with imported petroleum products.
(c) Ecology may adjust the baseline GHG emissions value for Category 1 or 2 covered parties based on:
(i) Reported GHG emissions data when the calculation methodology approved under chapter 173-441 WAC changes.
(ii) Updated annual GHG reports or an assigned emissions level under WAC 173-441-086.
Table 2
Baseline GHG Emissions Value Determination for Non-EITE Covered Parties
Covered Party
Operated
2012 – 2016
(at least 3 calendar years)
Average GHG Emissions
(MT CO2e/year)
Ecology Action
Category 1
Yes
≥ 70,000
Assign baseline
Refer to subsections (1), (2) and (3) of this section
Category 2
Yes
< 70,000
Assign baseline when emissions
reach 70,000 MT CO2e, or if requested
Refer to subsections (1), (4) and (5) of this section
 
No
 
N/A or No
≥ 70,000
Assign baseline
Refer to subsections (1), (4) and (5) of this section
(2) Data sources for setting a Category 1 baseline GHG emissions value. Ecology must use the following sources of data to set a Category 1 baseline GHG emissions value.
(a) Annual GHG emissions reports submitted under chapter 173-441 WAC; or
(b) An assigned emissions level established under WAC 173-441-086.
(c) Petroleum product producers and natural gas distributors must submit to ecology all emissions data submitted to EPA, or required to be retained by EPA, under 40 C.F.R. Part 98, Subparts MM and NN for calendar years 2012 through 2016. This submission to ecology must be complete by March 31, 2017, and consistent with the methods established in chapter 173-441 WAC.
(d) Ecology must use one of the following sources of information to adjust the baseline GHG emissions value of petroleum product producers that adjust their compliance obligation to account for exported petroleum products as specified in WAC 173-442-040 (2)(b):
(i) The petroleum products producer's GHG emissions for calendar years 2012 through 2016 associated with exported petroleum products voluntarily reported by October 31, 2017, using the methods established in WAC 173-441-120; or
(ii) An assigned GHG emissions level for the petroleum product producer's exported petroleum products based on methods established in WAC 173-441-086. Ecology may choose to base the assigned emissions level on either:
(A) GHG emissions data associated with exported petroleum products reported during calendar years 2017 through 2019 using the methods established in WAC 173-441-120; or
(B) Ecology's estimate of the petroleum product producer's GHG emissions data associated with exported petroleum products during calendar years 2012 through 2016.
(3) Process to calculate a Category 1 baseline GHG emissions value.
(a) Ecology must calculate the Category 1 baseline GHG emissions value based on the average (in MT CO2e per year) of:
(i) Five years of covered GHG emissions data between 2012 through 2016; or
(ii) At least three years of covered GHG emissions subject to (b) of this subsection.
(b) Ecology may omit a specific calendar year from calculating the baseline GHG emissions value when the data meets at least one of the following criteria:
(i) The data represents a significant difference from the average data based on all of the following:
(A) Primarily caused by a change in the GHG emissions calculation methodology approved under chapter 173-441 WAC during the baseline period that is not correctable by adjusting the existing reported GHG data;
(B) The GHG emissions calculation methodology produced a fifteen percent or more difference between that calendar year's GHG emissions and the 2012 through 2016 average of GHG emissions using the methodology in (a) of this subsection; and
(C) The change is not the result of a process or production change regardless of how large, unusual, or outside of the control of the covered party; or
(ii) The calendar year contains a period of curtailment.
(4) Setting a Category 2 baseline GHG emissions value. Ecology must assign a baseline GHG emissions value based on the first three consecutive calendar years after 2012 with average covered GHG emissions during normal operations greater than or equal to 70,000 MT CO2e, or when requested by a voluntary participant. Ecology must use one of the following methods to set a Category 2 baseline GHG emissions value consistent with subsection (3)(a) of this section.
(a) Method 1: For existing operations, ecology must set the baseline GHG emissions value:
(i) Using the average of three years of covered GHG emissions (MT CO2e/year) from annual GHG reports (WAC 173-441-120 or 173-441-086);
(ii) Ecology may adjust covered GHG emissions using existing reported GHG emissions data when the calculation methodology approved under chapter 173-441 WAC changes.
(b) Method 2: For modified operations, ecology must set the baseline GHG emissions value for a covered party that modifies its operations using the following methods:
(i) Existing emission unit: Use method 1; and
(ii) New or modified emissions unit: Use method 3.
(c) Method 3: For new operations that result in a new covered party, ecology must set the baseline GHG emissions value using one of the following methods:
(i) The average of the first three years of covered GHG emissions (MT CO2e/year) under normal operation from annual GHG reports (WAC 173-441-120 or 173-441-086); or
(ii) The benchmarking process in subsection (5) of this section.
(5) Benchmarking process.
(a) Responsibilities for covered parties subject to subsection (4)(c) of this section.
(i) The covered party must provide requested emissions information to ecology within sixty working days of a request.
(ii) The covered party must provide documentation of the following data to allow ecology to calculate actual or projected actual emissions:
(A) Information about the GHG emitting processes;
(B) Actual or projected production data;
(C) Actual or projected operating days and hours of operation during a calendar year;
(D) Other information requested by ecology;
(iii) Application materials submitted to ecology for a permit action need only reference dates of the submittal and the office that received the information.
(iv) The covered party must provide access to personnel or hired consultants who can assist ecology in assigning the baseline GHG emissions value.
(b) Ecology responsibilities. Ecology must set the baseline GHG emissions value using the following method:
(i) Ecology must set the baseline GHG emissions value at an emissions rate equal to the ninety percent most efficient facility in all surveyed stationary sources using the benchmarking process in (b)(ii) of this subsection.
(ii) In establishing the benchmark, ecology must:
(A) Use data from similar or identical existing parties and sources.
(B) Determine the appropriate production or product measure for the benchmark.
(C) Use operating and emissions data from existing sources from calendar years 2012 through 2016. Beginning in January 1, 2017, use emissions data for the most recent three years of data.
(D) Calculate covered GHG emissions using methodologies in WAC 173-441-120.
(E) Estimate covered GHG emissions using best available information when a covered party fails to provide emissions data within sixty working days of a request.
(c) To set the baseline GHG emissions value, ecology may request from a covered party:
(i) Information about the GHG emitting processes included in a notice of construction, prevention of significant deterioration, or nonattainment area new source review permit application.
(ii) Materials submitted to a nonecology permitting authority related to a permit application.
(iii) Other information necessary to calculate actual or projected emissions.
NEW SECTION
WAC 173-442-060 GHG emission reduction pathway.
Ecology must assign a GHG emission reduction pathway to all covered parties with baseline GHG emissions values greater than or equal to 70,000 MT CO2e, or when requested by a voluntary participant.
(1) For non-EITE covered parties, ecology assigns the GHG emission reduction pathway to the covered party based on their baseline GHG emissions value.
(a) The GHG emission reduction pathway for the first calendar year a covered party meets or exceeds the compliance threshold in WAC 173-442-030(3) is the baseline GHG emissions value for that covered party.
(b) Annual decrease.
(i) The GHG emission reduction pathway decreases annually by an additional one and seven tenths of a percent (1.7%) of the covered party's baseline GHG emissions value.
(ii) The additional one and seven tenths of a percent (1.7%) adjustment to a GHG emission reduction pathway does not apply to any calendar year that includes curtailment recognized by ecology.
(iii) Beginning in calendar year 2036, the emission reduction pathway remains constant at the value calculated for calendar year 2035.
(c) Ecology will issue a regulatory order as provided in WAC 173-442-200(6) to each covered party with its GHG emission reduction pathway in units of MT CO2e for each calendar year in the compliance period.
(2) For EITE covered parties the GHG emission reduction pathway is determined per WAC 173-442-070.
NEW SECTION
WAC 173-442-070 GHG emission reduction pathway and emission reduction requirement for EITE covered parties.
Ecology must establish the GHG emission reduction pathway for each EITE covered party using the procedures in this section. A mass-based GHG emission reduction pathway under WAC 173-442-060(1) does not apply to EITE covered parties.
(1) Production data reporting requirements. Each EITE covered party must report annual sector-specific production data, as specified by ecology, concurrent with their annual GHG report under chapter 173-441 WAC. Production data must be reported for each calendar year in the baseline period and each calendar year with an emission reduction requirement.
(2) Determine the output-based baseline. Ecology must calculate the output-based baseline for each EITE covered party. The output-based baseline is calculated once for each EITE covered party and remains constant for all calendar years.
(a) Determine average GHG emissions and production data for the output-based baseline period.
(i) Use the EITE covered party's average emissions and average production data during the 2012 through 2016 period for EITE covered parties with:
(A) Covered GHG emissions averaging greater than or equal to 70,000 MT CO2e per year during calendar years 2012 through 2016; and
(B) At least three full calendar years of covered GHG emissions reported under chapter 173-441 WAC during that period.
(ii) For all other EITE covered parties, use the EITE covered party's average emissions and average production data during the first three consecutive calendar years after 2012 of covered GHG emissions under normal operations greater than or equal to 70,000 MT CO2e per year reported under chapter 173-441 WAC.
(iii) The data used for (a)(i) and (ii) of this subsection will not include data for years that would meet the criteria in WAC 173-442-050 (3)(b).
(b) Divide average emissions by average production to get the output-based baseline.
(c) An EITE covered party's baseline GHG emissions value for purposes of applicability under WAC 173-442-030 is the EITE covered party's average emissions (MT CO2e/year) over the baseline period as specified in (a) of this subsection.
(d) Ecology may adjust the output-based baseline and baseline GHG emissions value for EITE covered parties based on:
(i) Reported GHG emissions data when the calculation methodology approved under chapter 173-441 WAC changes.
(ii) Updated annual GHG reports or an assigned emissions level under WAC 173-441-086.
(3) Determine the efficiency reduction rate. Ecology must calculate the efficiency reduction rate for each EITE covered party. The efficiency reduction rate is calculated once for each EITE covered party concurrently with the output-based baseline and remains constant for all calendar years.
(a) Ecology must calculate an efficiency intensity distribution for each sector with an EITE covered party that meets the requirements in WAC 173-442-030.
(i) Ecology must use the following information to calculate the efficiency intensity distribution for each sector:
(A) GHG emissions data must be comparable to the EITE covered party's data reported under chapter 173-441 WAC and come from the following sources:
(I) EPA's GHG Reporting Program;
(II) Other national programs;
(III) Trade associations; or
(IV) Other similar sources.
(B) Production data must come from:
(I) EPA's GHG Reporting Program;
(II) National emissions inventory;
(III) Energy information agency;
(IV) Other national programs;
(V) Trade associations; or
(VI) Other similar sources.
(C) If ecology determines no production data or emissions data is available to establish an efficiency intensity distribution for a sector, ecology may use existing benchmarking information for the sector. To use the data, ecology must determine that the benchmark is:
(I) Reasonably current; and
(II) Detailed enough to determine the efficiency intensity distribution.
(D) Ecology must use data from the same time period as the output-based baseline period whenever possible.
(ii) Ecology calculates the efficiency intensity distribution for a sector by using paired GHG emissions and production data to create a ranking of efficiencies for sample facilities in that sector. Alternately, existing benchmarking information is used as described in (a)(i)(C) of this subsection.
(b) Ecology must compare the output-based baseline for each EITE covered party to the efficiency intensity distribution for that EITE covered party's sector to determine the EITE covered party's efficiency reduction rate.
(i) If the EITE covered party's output-based baseline is less than or equal to the twenty-fifth percentile value of the sector's efficiency intensity distribution, then ecology must set the EITE covered party's efficiency reduction rate at a level that would reduce emissions at a rate greater than required to meet the GHG emission reduction pathway that would have been required by WAC 173-442-060 (1)(a).
(ii) If the EITE covered party's output-based baseline is greater than or equal to the seventy-fifth percentile value of the sector's efficiency intensity distribution, then ecology must set the EITE covered party's efficiency reduction rate at a level that would reduce emissions at a rate less than required to meet the GHG emission reduction pathway that would have been required by WAC 173-442-060 (1)(a).
(iii) If the EITE covered party's output-based baseline is between the twenty-fifth and seventy-fifth percentile value of the sector's efficiency intensity distribution, then ecology must set the EITE covered party's efficiency reduction rate at a level that would reduce emissions at a rate consistent with meeting the GHG emission reduction pathway that would have been required by WAC 173-442-060 (1)(a).
(iv) If ecology determines an EITE covered party has not supplied sufficient information to complete this assessment, then the EITE covered party's efficiency reduction rate must be set at a level that would reduce emissions at a rate greater than required to meet the GHG emission reduction pathway that would have been required by WAC 173-442-060 (1)(a).
(v) If ecology determines that there is not enough information to establish an efficiency intensity distribution for a sector, then EITE covered parties in that sector will be assigned an efficiency reduction rate at a level that would reduce emissions at a rate consistent with meeting the GHG emission reduction pathway that would have been required by WAC 173-442-060 (1)(a).
(4) Determine the GHG emission reduction pathway. By January 30 of the second year of each compliance period, ecology will issue a regulatory order as provided in WAC 173-442-200(6) to each EITE covered party with its GHG emission reduction pathway in units of MT CO2e for each calendar year in the compliance period. Ecology will determine the GHG emission reduction pathway for each compliance period using the following approach:
(a) Calculate the EITE covered party's average production based on reported data for the following time period:
(i) For the 2020 through 2022 compliance period: Use average production data from calendar years 2017 through 2019.
(ii) For EITE covered parties with a first compliance obligation after the 2020 through 2022 compliance period: Use average production data from the three calendar year period prior to their first compliance period with a compliance obligation.
(iii) For all other compliance periods, use average production data from the previous compliance period.
(b) The EITE covered party's GHG emission reduction pathway is calculated using Equation 1.
Equation 1
RPx
=
(AP x OB)
-
(AP x OB x RR x (Yx - 1))
Where:
RPx = GHG emission reduction pathway for year "x" (MT CO2e for year "x")
AP = Average production data as specified in subsection (4)(a) of this section (units of production)
OB = Output-based baseline as specified in subsection (2) of this section (MT CO2e/units of production)
RR = Efficiency reduction rate as specified in subsection (3) of this section (%)
Yx = The number of calendar years the EITE covered party has been subject to WAC 173-442-030. The first calendar year is designated as calendar year number one.
(c) Any calendar year containing curtailment recognized by ecology does not count toward the total years in Yx.
(d) Beginning in calendar year 2036, Yx remains constant at the number of years determined for calendar year 2035.
SECTION 3 - COMPLIANCE OPTIONS
NEW SECTION
WAC 173-442-100 Emission reduction units.
(1) A covered party may use ERUs to meet the compliance obligation in WAC 173-442-200.
(2) ERUs must originate from GHG emission reductions occurring within Washington unless derived from allowances under WAC 173-442-170.
(3) Mandatory retirement of ERUs for compliance.
(a) Ecology must retire an ERU applied to meet a compliance obligation.
(b) The use of an ERU for compliance, as recorded in a compliance report required by WAC 173-442-200 or the registry established in WAC 173-442-230, permanently and irrevocably disqualifies any further use of the unit.
NEW SECTION
WAC 173-442-110 Generating emission reduction units.
ERUs may be generated in the following manner:
(1) Actual emissions below GHG emission reduction requirement. Covered parties (including voluntary parties) may generate an ERU when actual covered GHG emissions, as reported per the requirements of chapter 173-441 WAC for a compliance period, are below the emission reduction requirements for that compliance period. The covered party may generate ERUs in an amount equal to the difference between the reported covered GHG emissions and the higher GHG emission reduction requirement.
(2) Emission reduction projects or programs. A project or program allowed under WAC 173-442-160 may generate ERUs consistent with WAC 173-442-150.
(3) External emission markets. A covered party may generate ERUs consistent with WAC 173-442-170.
NEW SECTION
WAC 173-442-120 Recording emission reduction units.
(1) ERUs exist solely as an accounting mechanism and are not property rights.
(2) Each covered party must keep a record for ten years in a manner prescribed by ecology of any ERUs generated or obtained.
(3) Any ERU generated must be recorded with its vintage year in the registry established in WAC 173-442-230 and the compliance report of the covered party.
(4) A covered party must report ERUs through the compliance report and accounts maintained in the registry established in WAC 173-442-230.
NEW SECTION
WAC 173-442-130 Banking emission reduction units.
(1) A covered party may bank an ERU for ten years.
(2) Banked ERUs are recorded in the registry established in WAC 173-442-230.
(3) First in, first out provision.
(a) The covered party must withdraw an ERU with the oldest vintage year first.
(b) Within the same vintage year the covered party has the option to select which ERUs to withdraw.
NEW SECTION
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.
(a) Third parties may only facilitate, broker, or assist covered parties to transfer ERUs recorded in accounts in the registry.
(b) Third parties may not own ERUs.
NEW SECTION
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.
(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 (RCW 80.80.040);
(C) Washington's CO2 mitigation standard for fossil-fueled thermal electric generation facilities (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 CO2 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.
NEW SECTION
WAC 173-442-160 Activities and programs recognized as generating emission reduction units.
(1) Ecology will accept ERUs from the activities and programs described below, provided they comply with third-party verification under WAC 173-442-220, the requirements of this section, and WAC 173-442-150:
• Transportation activities;
• Combined heat and power activities;
• Energy activities;
• Livestock and agricultural activities;
• Waste and wastewater activities;
• Industrial sector activities;
• Certain EFSEC recognized emission reductions; and
• Ecology approved emission reductions.
(2) To generate an ERU, the following must occur:
(a) If a protocol is listed from an external registry program, then the emission reduction must be registered on that registry along with the information necessary to establish eligibility to meet the criteria of this chapter.
(b) Where a process is listed instead of a registry-specific protocol, all steps of the process must be followed in a manner approved by ecology and any other departments referenced in the applicable process.
(c) Project types must not be included in the methodologies used in the emission calculations that generate the covered GHG emissions for any covered party reporting as per chapter 173-441 WAC.
(d) Third-party verification must occur as per WAC 173-442-220.
(3) Transportation activities. Transportation activities must:
(a) Use less energy or different forms of energy for transportation through the application of:
(i) Improved Efficiency of Vehicle Fleets protocol from the American Carbon Registry (as of May 1, 2016); or
(ii) Truck Stop Electrification protocol from the American Carbon Registry (as of May 1, 2016).
(b) Exceed workplace goals for the commute trip reduction program as required by RCW 70.94.527 according to the following:
(i) Organizations that participate in commute trip reduction programs may generate ERUs if they provide data and surveys consistent with the requirements of their applicable program and those of the department of transportation.
(ii) Generation of ERUs will be derived from reductions in the drive-alone trip rate at workplaces participating in commute trip reduction programs, as tracked and reported by the department of transportation.
(iii) The drive-alone trip rate will be measured relative to a baseline maintained by the department of transportation consisting of the average of the 2013/2014 and 2015/2016 commute trip reduction program survey years. An imputed baseline will be used for organizations that enter commute trip reduction programs in years after 2016.
(iv) GHG emission reductions associated with reductions in the drive-alone trip rate will be calculated by the department of transportation.
(v) Ecology will assign the appropriate quantity of ERUs.
(4) Combined heat and power activities. Combined heat and power projects demonstrating GHG emission reductions through a methodology submitted to and approved by ecology.
(5) Energy measures. Energy efficiency measures and demand side management of electricity and natural gas consumption in Washington, and alternative energy generation technologies located in Washington may generate ERUs.
(a) The acquisition of conservation and energy efficiency in excess of the targets required by the Energy Independence Act per RCW 19.285.040 and any additional acquisition targets established by the utilities and transportation commission by rule or order may generate ERUs.
(i) Eligible conservation and energy efficiency must be reported to the department of commerce or the utilities and transportation commission in accordance with its rules or orders, and consistent with RCW 19.285.070.
(ii) Utilities that are not qualifying utilities, as defined in RCW 19.285.030, may voluntarily submit data on their conservation and energy efficiency acquisitions to the department of commerce in accordance with its rules and in a manner consistent with RCW 19.285.070 to generate ERUs under this section.
(iii) Only conservation and energy efficiency that exceeds the targets established through RCW 19.285.040, targets for natural gas conservation put in place through order, and any additional targets established by the utilities and transportation commission by rule or order is eligible to generate ERUs.
(iv) Natural gas conservation and efficiency must be expressed in units of megawatt-hours using procedures established by the utilities and transportation commission.
(b) The acquisition and subsequent retirement of renewable energy credits that are not retired for purposes of complying with the Energy Independence Act or other regulatory or voluntary programs may generate ERUs.
(i) Renewable resources eligible for generating ERUs include eligible renewable resources as defined by RCW 19.285.030(12) except that only those eligible renewable resources physically located in Washington may generate ERUs.
(ii) ERUs may only be generated if a sufficient quantity of renewable energy credits are retired in the renewable energy credit tracking system identified in WAC 194-37-210(1) and the following conditions are met:
(A) Each renewable energy credit retired must have the appropriate notation within the tracking system that the renewable resource is eligible for Washington compliance for the Energy Independence Act or this rule.
(B) Renewable energy credits must be retired consistent with the operating rules of the renewable energy credit tracking system and in the proper retirement account within the tracking system as designated by the Washington renewable energy credit tracking system administrator.
(C) Any renewable energy credit used for the purposes of generating ERUs must not have been retired or otherwise used for any other program or requirements.
(D) The renewable energy credit tracking system account holder must establish the department of commerce as a state program administrator with access to the account holder's compliance reports.
(c) The quantity of ERUs generated from exceeding conservation targets as per WAC 173-442-170 (2)(a) or from retiring renewable energy credits as per WAC 173-442-170 (2)(b) is computed by assuming:
(i) The marginal resource for which the conservation or renewable energy generation is avoiding is a new combined-cycle natural gas thermal electric generation turbine sited in Washington.
(ii) The average rate of GHG emissions for such a turbine is nine hundred seventy pounds per megawatt-hour, as per the determination made in WAC 194-26-020.
(iii) That under these assumptions one ERU may be generated by retiring two and one-quarter renewable energy credits or for exceeding a conservation target by two and one-quarter megawatt-hours.
(d) Ecology will allocate the appropriate quantity of ERUs as determined in this subsection.
(6) Livestock and agricultural activities. GHG management activities addressing agricultural and livestock activities using:
(a) Nitrous Oxide Emissions Reductions from Reduced Use of Nitrogen Fertilizer on Agricultural Crops protocol from the American Carbon Registry (as of May 1, 2016).
(b) The enteric methane, manure methane, and nitrous oxide from fertilizer use modules from the Grazing Land and Livestock Management protocol from the American Carbon Registry (as of May 1, 2016). The biotic sequestration and fossil fuel modules of this protocol may not generate ERUs.
(c) The U.S. Livestock protocol from the Climate Action Reserve (as of May 1, 2016).
(7) Waste and wastewater activities. GHG management activities addressing waste and wastewater infrastructure and activities using:
(a) U.S. Landfill protocol from the Climate Action Reserve (as of May 1, 2016);
(b) Organic Waste Composting protocol from the Climate Action Reserve (as of May 1, 2016); or
(c) Organic Waste Digestion protocol from the Climate Action Reserve (as of May 1, 2016).
(8) Industrial sector activities. GHG process and equipment management, operations, and changes affecting industry and manufacturing using:
(a) Replacement of SF6 with Alternate Cover Gas in the Magnesium Industry protocol from the American Carbon Registry (as of May 1, 2016);
(b) Certified Reclaimed HFC Refrigerants and Advanced Refrigeration Systems protocol from the American Carbon Registry (as of May 1, 2016);
(c) Conversion of High-Bleed Pneumatic Controllers in Oil and Natural Gas Systems protocol from the American Carbon Registry (as of May 1, 2016); or
(d) Emission Reduction Measurement and Monitoring Methodology for the Transition to Advanced Formulation Blowing Agents in Foam Manufacturing and Use protocol from the American Carbon Registry (as of May 1, 2016).
(9) Emission reductions derived from one of the activity categories in subsections (3) through (8) of this section and that are from an independent qualified organization recognized by the energy facility site evaluation council under RCW 80.70.050.
(10) Emission reductions derived from one of the activity categories in subsections (3) through (8) of this section through a methodology approved by ecology.
NEW SECTION
WAC 173-442-170 Limitations on the use of allowances.
(1) A covered party may use allowances from external GHG emission reduction programs to generate ERUs when ecology determines:
(a) The allowances are issued by an established multisector GHG emission reduction program;
(b) The covered party is allowed to purchase allowances within that program; and
(c) The allowances are derived from methodologies congruent with chapter 173-441 WAC.
(2) A covered party may demonstrate compliance through the acquisition and use of allowances based on the limitations in this subsection.
(a) A covered party may use allowances for a compliance period consistent with the percentages in Table 3:
Table 3
Percentage Limit on Usage of Allowances for Covered Parties
Compliance Period
Upper Limit
2017-19
100%
2020-22
100%
2023-25
50%
2026-28
25%
2029-31
15%
2032-34
10%
2035 and beyond
5%
(b) A covered party may use allowances from a single vintage year within a compliance period consistent with the percentages in Table 4. The originating program assigns the vintage year for each allowance.
Table 4
Limits on Use of Allowances from a Vintage Year Within a Compliance Period
Year within the compliance period
Vintage year of allowance
Percentage
not to exceed
(%)
1st year
Same year as the 1st year of the compliance period
35
2nd year
Same year as the 2nd year of the compliance period
40
3rd year
Same year as the 3rd year of the compliance period
40
(3) The covered party must document that an allowance used as an ERU has been invalidated from use or placed into a permanent holding account in its originating market.
SECTION 4 - DEMONSTRATING COMPLIANCE
NEW SECTION
WAC 173-442-200 Demonstrating compliance.
(1) A covered party must demonstrate compliance with their compliance obligation at the end of each applicable compliance period.
(2) The compliance period is the three-year period specified in WAC 173-442-020 and 173-442-030(3) (Table 1).
(3) Calculation of the compliance obligation and ERU balance.
Compliance obligation = (Sum of covered GHG emissions for the compliance period) – (Emission reduction requirement for the compliance period)
(in MT CO2e)
If difference > 1, then must acquire ERUs
If difference < 0, then have excess ERUs
(4) Covered parties must demonstrate compliance by submitting:
(a) GHG reporting data under chapter 173-441 WAC;
(b) ERUs under WAC 173-442-120; or
(c) A combination of (a) and (b) of this subsection that achieves a level meeting the compliance obligation.
(5) A covered party must document compliance consistent with the requirements in WAC 173-442-210.
(6) Regulatory order.
(a) By January 30 of the second year of a covered party's first compliance period, ecology will issue a regulatory order establishing emission reduction requirements for each covered party consistent with their emission reduction pathway.
(b) The emission reduction requirement established for the compliance period ending in 2035 must continue to be met for all following compliance periods.
(c) Ecology must assign GHG emission reduction requirements to each covered party with a baseline GHG emissions value greater than or equal to 70,000 MT CO2e per year, or when requested by a voluntary party.
(d) The regulatory order establishes the following:
(i) The baseline GHG emissions value for the:
(A) Covered party determined through WAC 173-442-050; or
(B) EITE covered party determined through WAC 173-442-070; and
(ii) Emission reduction requirements for each compliance period consistent with WAC 173-442-060 and this section.
NEW SECTION
WAC 173-442-210 Compliance report.
(1) Each covered party must submit a compliance report:
(a) In a format prescribed by ecology;
(b) That includes verification complying with WAC 173-442-220; and
(c) By the deadline in WAC 173-442-250.
(2) The covered party is solely responsible for ensuring that ecology receives its compliance report by the deadlines.
(3) The compliance report must contain the following information:
(a) Record of ERUs generated.
(i) The record of each ERU generated must include:
(A) The source of each ERU(s).
(B) The source of the emissions data or computational method used to generate each ERU.
(C) The vintage year of each ERU.
(ii) The record may cover a distinct ERU or a block of ERUs from an identical source.
(b) Record of ERUs banked. The record of ERUs banked must include:
(i) Vintage year of the ERU.
(ii) Origin of the ERU.
(c) Record of ERU transactions. The record of each ERU transaction must include:
(i) The origin of any ERUs acquired.
(ii) The destination of any ERUs transferred.
(iii) The names and contact information of any third-parties who facilitated, brokered, or provided liaison services between the parties making the transfer.
(iv) The vintage year of the ERUs.
(d) Documentation that a third party verified the compliance report.
(e) Signature of the chapter 173-441 WAC covered party's designated representative or alternate designated representative.
(f) Statement attesting to the report's accuracy and validity.
(4) A covered party must retain records for ten years.
(5) Compliance report corrections.
(a) Covered parties must correct errors in their compliance report no later than forty-five days after discovery of an error.
(b) Ecology requires corrections regardless of whether errors are identified by:
(i) The third-party verifier;
(ii) The covered party; or
(iii) Ecology.
(c) A covered party may request to have a submitted compliance report for the most recent compliance period reopened for corrective edits and resubmittal.
(d) The covered party must provide justification to ecology for the report correction(s) and indicate the specific corrections they will make to the report.
(e) Each submitted request is subject to ecology review and approval. Permissions to correct a report does not preclude enforcement based on misreporting.
(6) Ecology denial of compliance report.
(a) Ecology will determine if the compliance report contains errors that impact the verification status of the compliance report.
(b) Ecology may deny a compliance report regardless of verification. Ecology may deny for these reasons:
(i) Failure to submit a complete compliance report by the deadline;
(ii) Failure to complete third-party verification if required; or
(iii) Other forms of noncompliance with this chapter.
(7) Requirements when covered GHG emissions fall below the compliance threshold.
(a) A covered party may discontinue submitting a compliance report for the purposes of this chapter under the following conditions:
(i) After three consecutive years of reporting covered GHG emissions less than 50,000 MT CO2e/yr; and
(ii) The covered party notified ecology of its intent to discontinue the report by the compliance report deadline in WAC 173-442-250.
(iii) Covered parties must continue to submit annual GHG reports required by chapter 173-441 WAC.
(b) A covered party that shuts down or changes operations to eliminate covered GHG emissions is exempt from submitting future compliance reports under the following conditions:
(i) The covered party must:
(A) Submit a compliance report for the last year of operation;
(B) Certify the closure of all GHG emitting processes and operations; and
(C) Notify ecology of its intent to discontinue the compliance report by the compliance report deadline in WAC 173-442-250.
(ii) Exemptions. This provision does not apply to:
(A) Seasonal or temporary cessation of operations;
(B) Municipal solid waste landfills;
(C) Industrial waste landfills; or
(D) Underground coal mines.
(iii) The covered party must resume submitting a compliance report for any future calendar year when GHG-emitting processes or operations resume operation.
(c) A covered party must resume submitting a compliance report when total covered GHG emissions exceed 50,000 MT CO2e/year.
(8) Ecology actions.
(a) Ecology is not responsible for failure of electronically submitted reports.
(b) Ecology must deem a report submitted electronically to be validly signed when accompanied by a digital signature that meets the requirements designated by ecology.
NEW SECTION
WAC 173-442-220 Verification.
(1) Emission reductions subject to third-party verification. All emission reductions for which ERUs are generated under WAC 173-442-160 and 173-442-150(2) are:
(a) Subject to the verification procedure requirements of this section;
(b) Subject to any verification criteria, procedures, or methods that are part of the protocols, processes, or methodologies applicable for the type of emission reduction detailed in WAC 173-442-160 and 173-442-150(2); and
(c) Subject to verification by a certified verifier using processes and procedures consistent with the International Organization for Standardization 14064-3:2006 protocol (as of May 1, 2016).
(2) The third-party verifier must certify that compliance reports are consistent with the requirements in this chapter.
(3) Verification report content. The verification report must be in a format specified by ecology. The report must include:
(a) Documentation identifying that the covered party complied with the requirements of chapter 173-441 WAC;
(b) Name and other information about the third-party verifier, including:
(i) All relevant information about the third-party verifier in subsection (6)(a) of this section;
(ii) The names, roles, and sector specific qualifications of individuals working on the verification report;
(iii) Document that the verifier met the requirements in WAC 173-441-085; and
(iv) Certify that the verification report is true, accurate, and complete to the best of their knowledge.
(c) A verification plan that details methodologies used to verify the compliance report and schedule describing when the verification occurred.
(d) The third-party verifier's review of the covered party's accounting of emissions, emissions reductions, ERUs, and all information relevant to demonstrating compliance with the applicable emission standards.
(e) Corrections made to the compliance report.
(f) The third-party verifier's evaluation of the compliance report. This must include a log of issues identified in the course of verification, their potential impact on the quality of the compliance report, and their resolution.
(g) Documentation of required on-site visit. Information about the required on-site visit, including date(s) and a description of the verification services conducted on-site.
(i) The third-party verifier must conduct an on-site visit at least once during a compliance period. During the on-site visit, the verifier must:
(A) Check that all sources specified in the compliance report are identified appropriately.
(B) Confirm that all relevant emissions, emission reductions, and accounting for ERUs are included in the compliance report.
(C) Review the data management systems used by the covered party to track, quantify, and report GHG emissions and, when applicable, product data and fuel transactions. The third-party verifier must evaluate the uncertainty and effectiveness of these systems.
(D) Interview key personnel.
(E) Make direct observations of equipment for data sources and equipment supplying data for sources determined to be high risk.
(F) Assess conformance with measurement accuracy, data capture, and missing data substitution requirements.
(G) Review financial transactions to confirm:
(I) Fuel, feedstock, and product data; and
(II) Complete and accurate reporting of required data, such as facility fuel suppliers, fuel quantities delivered, and if fuel was received directly from an interstate pipeline.
(ii) The verifier must document the findings from the visit and the dates of the visit.
(h) For petroleum product producers or importers, or natural gas distributors, the third-party verifier must visit the headquarters or other location of central data management.
(4) Verification deadline. The third-party verifier must submit a complete verification report to ecology by the compliance report deadline in WAC 173-442-250.
(5) Corrections. The covered party must submit corrections to the verification report to ecology no later than forty-five days after discovery of the error.
(6) Eligible third-party verifiers.
(a) A third-party verifier must be approved by ecology. Approval requires:
(i) Demonstrating to ecology's satisfaction that the third-party verifier has sufficient knowledge of the relevant methods and protocols in this chapter. Ecology may limit certification to certain types or sources of emissions.
(ii) Registering as a third party with ecology (both individuals and organizations); and
(iii) Active accreditation or recognition as a third-party verifier under at least one of the following GHG programs:
(A) California Air Resources Board's mandatory reporting of GHG emissions program;
(B) The Climate Registry;
(C) Climate Action Reserve;
(D) American National Standards Institute (ANSI); or
(E) Other GHG verification program approved by ecology.
(b) A covered party must not use the same third-party verifier (either organization or individuals) for a period of more than six consecutive years. The covered party must wait at least three years before using the previous third-party verifier to verify their compliance reports.
(c) A covered party and third-party verifier must certify that there is not a conflict of interest in verifying the compliance report. A conflict of interest exists when:
(i) The third-party verifier and covered party share any management staff or board of directors membership, or the third-party verifier has employed any of the senior management staff of the covered party, or vice versa, within the previous five years; or
(ii) Any employee of the third-party verifier, or any employee of a related entity, or a subcontractor who is a member of the verification team has provided to the covered party any services within the previous five years.
(iii) Any staff member of the third-party verifier provides any type of incentive to a covered party to secure a verification services contract.
NEW SECTION
WAC 173-442-230 Registry.
(1) Ecology will develop an electronic data base to ensure a secure and reliable method to track ERUs.
(2) The data base must:
(a) Create and assign unique identifiers to ERUs;
(b) Track movement of ERUs, including:
(i) Transfers of ERUs between parties; and
(ii) Retirement of ERUs.
(c) Interface with other carbon registries or tracking systems, as possible.
NEW SECTION
WAC 173-442-240 Reserve.
Ecology will establish an account of reserve ERUs for the purposes described in this section.
(1) Contributions to the reserve.
(a) Ecology must allocate to the reserve:
(i) Two percent of each:
(A) Covered party's emission reduction pathway annual decrease in WAC 173-442-060 (1)(b); and
(B) EITE covered party's contribution as follows:
(I) If the EITE covered party's RAx is greater than zero, then the difference in MT CO2e of GHG emissions results in ERUs allocated to the reserve.
(II) If the EITE covered party's RAx is less than zero, then the difference in MT CO2e of GHG emissions results in ERUs retired from the reserve.
(III) Calculate MT CO2e of GHG emissions of ERUs allocated to or retired from the reserve using Equation 2.
Equation 2
RAx
=
((BP x OB)
-
(BP x OB x RR x (Yx - 1))) - RPx
Where:
RAx = Reserve adjustment for given EITE covered party for calendar year "x" (MT CO2e for year "x")
RPx = GHG emission reduction pathway for given EITE covered party for calendar year "x" as specified in WAC 173-442-070 (4)(b) (MT CO2e for year "x")
BP = Baseline production data for given EITE covered party as specified in WAC 173-442-070 (2)(a) (units of production)
OB = Output-based baseline for given EITE covered party as specified in WAC 173-442-070(2) (MT CO2e/units of production)
RR = Efficiency reduction rate for given EITE covered party as specified in WAC 173-442-070(3) (%)
Yx = The number of calendar years the EITE covered party has been subject to WAC 173-442-030. The first calendar year is designated as calendar year number one.
(C) Any calendar year containing curtailment recognized by Ecology does not count toward the total years in Yx.
(D) Beginning in calendar year 2036, Yx remains constant at the number of years determined for calendar year 2035.
(ii) ERUs generated as a result of facility curtailment.
(b) Ecology must transfer into the reserve the ERUs specified in (a)(ii) of this subsection within one hundred twenty days after each applicable compliance period (WAC 173-442-200).
(c) Ecology will not accept into the reserve retired or expired ERUs.
(2) Retirements within the reserve. Ecology may retire reserve ERUs to ensure consistency with an aggregate emission reduction limit for the program and for purposes consistent with this rule. Ecology may retire reserve ERUs:
(a) For covered GHG emissions from covered parties that do not have a GHG baseline emissions value established through WAC 173-442-050 (1)(a), or existing stationary sources that expand, or physically modify their operations.
(b) To address conditions where two ERUs may be generated for each metric ton of reduced GHG emissions from programs or activities.
(c) To promote the viability of voluntary renewable energy programs in Washington.
(i) Ecology, in conjunction with the departments of commerce and the utilities and transportation commission, will engage stakeholders and renewable energy market experts to estimate demand for voluntary renewable energy programs serving Washington customers.
(ii) Ecology may allocate a portion of the reserve ERUs for retirement as voluntary renewable energy purchases by Washington customers consistent with the estimate in (c)(i) of this subsection, after taking into account the availability of reserve ERUs.
(iii) Ecology will determine the number of reserve ERUs retired for each representative unit of renewable energy purchased on the voluntary market.
(3) Withdrawals from the reserve. Ecology may assign reserve ERUs to covered parties for the following purposes:
(a) A curtailed stationary source that restarts operations will be assigned fifty percent of the ERUs that were allocated to the reserve during the calendar year prior to restart as per subsection (1)(a)(ii) of this section.
(b) The Environmental Justice Advisory Committee.
(i) Ecology will convene an Environmental Justice Advisory Committee comprised of persons who are well-informed on the principles of environmental justice and who represent communities of color, low-income communities, and environmental justice interests from geographically diverse areas of the state.
(ii) Ecology will determine the amount of reserve ERUs available to the committee at the end of each applicable compliance period.
(iii) The purpose of the committee is to award reserve ERUs to covered parties that implement, fund, or otherwise facilitate emission reduction projects or programs consistent with the priorities and environmental justice criteria determined by the committee.
(iv) The committee must award reserve ERUs on a one-for-one or a two-for-one matching basis with ERUs from an emission reduction activity or project that is consistent with WAC 173-442-160.
(v) The committee does not have to allocate its entire allotment of reserve ERUs.
(vi) Unallocated reserve ERUs return to the reserve.
(4) Priority of reserve uses. Ecology will allocate or retire reserve ERUs in the following priority:
(a) Startup of curtailed facilities consistent with subsection (3)(a) of this section.
(b) Covered parties entering the program that do not have a GHG baseline emissions value established through WAC 173-442-050 (1)(a), or existing stationary sources that expand, or physically modify their operations consistent with subsection (2)(a) of this section.
(c) Changes in production consistent with subsection (1)(a)(i)(B)(III) of this section.
(d) Harmonizing ERU generation with reduced GHG emissions consistent with subsection (2)(b) of this section.
(e) Projects or programs with positive environmental justice impacts consistent with subsection (3)(b) of this section.
(f) Supporting voluntary green power renewable programs consistent with subsection (2)(c) of this section.
NEW SECTION
WAC 173-442-250 Compliance report and verification due date.
(1) Covered parties required to report GHG emissions to EPA to comply with 40 C.F.R. Part 98 must submit their compliance report and verification by the dates in the "Report to EPA" column in Table 5.
(2) All other covered parties must submit their compliance report and verification by the dates in the "Report to Ecology" column in Table 5.
Table 5
Compliance Report and Verification Due Date
Compliance Period
Report to EPA
Report to Ecology
(Calendar year)
Due December 31
Due July 28
2017 through 2019
2020
2021
2020 through 2022
2023
2024
2023 through 2025
2026
2027
2026 through 2028
2029
2030
2029 through 2031
2032
2033
2032 through 2034
2035
2036
2035 through 2037
2038
2039
Every 3 years
Every 3 years
Every 3 years
SECTION 5 - OTHER REQUIREMENTS
NEW SECTION
WAC 173-442-320 Program review.
(1) Ecology will periodically review the program established by this chapter.
(2) If another program establishes GHG reduction requirements from covered parties, ecology will compare the programs. As a result of this comparison, ecology may suspend, alter, or repeal some or all of the requirements if ecology determines the new program requires similar or greater GHG reductions from the covered parties.
NEW SECTION
WAC 173-442-330 Air operating permit.
(1) The regulatory order issued under WAC 173-442-200(6) is an applicable requirement that must be included in an air operating permit required by chapter 173-401 WAC.
(2) In an air operating permit, the clean air rule regulatory order must be listed as a "state only" requirement.
(3) The regulatory order is a stand-alone appendix to an air operating permit.
(4) Only ecology implements and enforces the terms of the regulatory order.
NEW SECTION
WAC 173-442-340 Enforcement.
(1) A violation of any requirement of this chapter subjects the covered party to enforcement in chapter 70.94 RCW.
(2) Each metric ton of covered GHG emissions that a covered party emits that exceeds the covered party's compliance obligation, and is not covered by an ERU is a separate violation.
(3) Each day that the covered party does not meet the compliance obligation is a separate violation.
(4) Ecology is solely responsible for enforcing the requirements of this chapter. Nothing in this chapter otherwise alters a local air authority's ability to regulate covered parties in their jurisdiction.
(5) Penalties may be appealed to the pollution control hearings board per chapter 43.21B RCW.
NEW SECTION
WAC 173-442-350 Confidentiality.
(1) Emissions data. Emissions data submitted to ecology is public information and is not confidential.
(2) ERU data. Data about an ERU is considered public information unless ecology approves a request under subsection (3) of this section.
(3) Confidentiality requests. A covered party may request proprietary information that is not emissions data be kept confidential. The request must show how the data: 
(a) Meets the requirements of RCW 70.94.205 (Confidentiality of records and information); or
(b) Is exempt from public disclosure under the Washington Public Records Act (chapter 42.56 RCW).
(4) Verification status. Ecology's determination of the verification status of each report is public information. All confidential data used in the verification process will remain confidential.
NEW SECTION
WAC 173-442-360 Addresses.
Submit all requests, notifications, and communications to ecology in a format specified by ecology in either of the following:
(1) For U.S. mail: Clean Air Rule, Air Quality Program, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600.
(2) For e-mail: CAR@ecy.wa.gov.
NEW SECTION
WAC 173-442-370 Severability.
If any provision of the rule or its application to any covered party, person, or circumstance is held invalid, the remainder of the rule or application of the provision to other covered parties, persons, or circumstances is not affected.