Although the official budget language of a transportation revenue package is yet to be seen, carbon reduction climate resiliency policy conversations are gaining traction.

The three primary carbon reduction bills—HB 1091, SB 5126, and SB 5373—are the subject of intense debate as lawmakers continue to discuss the merits of using carbon-related revenue sources to support a new transportation revenue package. Recent coverage in the Seattle Times, outlines the current discussions of a grand bargain to move carbon reduction policies across the finish line in addition to supporting a transportation revenue package.

As previously reported, the following bills are being considered as part of the grand bargain.

HB 1091, sponsored by Rep. Joe Fitzgibbon (D–Burien), creates a Clean Fuels Program, also known as a Low Carbon Fuel Standard (LCFS). LCFS is intended to be a carbon reduction investment loop for the transportation section. It would require fuel producers to reduce the carbon intensity of their fuels over time, or to acquire compliance credits. Unlike other carbon related proposals, the sale of credits would not generate any direct revenue for the state. Instead, the revenues from credits sold would be reinvested back into other clean fuel generating activities like electrification of transportation.

SB 5126, sponsored by Sen. Reuven Carlyle (D–Seattle), creates a Cap and Invest Program which sets emission limits on facilities or fuel suppliers whose annual emissions equal or exceed 25,000 metric tons of carbon dioxide. Those that exceed their limit, must purchase credits at auction to allow them to exceed their emission limit. These facilities can reduce their emissions by improving their efficiency or using renewable fuels. When they reduce emissions below their cap, these companies generate credits that they can bank for future use, trade with other companies, or sell at auction. In addition, cap-and-trade programs generate revenue by selling credits on the open market. This program would generate revenue for the state and negotiations continue over how much would go towards the transportation budget.

Finally, SB 5373, sponsored by Sen. Liz Lovelett (D–Anacortes), establishes a carbon pollution tax on the sale or use of all fossil fuel within the state. The proposed tax rate begins at $25 per metric ton of greenhouse gas emissions and increases annually by five percent. The rate adjusts for inflation as measured by the consumer price index, starting July 1, 2023. Carbon tax receipts must be deposited into the Climate Finance Account and Just Transition Account, both accounts created by the passage of the bill. SB 5373 was heard in the Senate Environment, Energy, and Technology Committee on March 4 at 8 am.

Beyond the three carbon reduction proposals described above, there are a number of climate-related bills impacting the transportation sector. SB 5000, sponsored by Sen. Brad Hawkins (R–East Wenatchee), provides partial temporary sales and use tax exemptions for sales of new and used fuel cell electric vehicles. Fuel cell electric vehicles are powered by hydrogen that is converted to electricity via a fuel cell. The bill would make sales and leases of new and used fuel cell electric vehicles exempt from 50 percent of the sales and use tax, with maximum of $16,000 eligible for exemption. Exemptions expire June 30, 2029.

Lastly, HB 1287, sponsored by Rep. Alex Ramel (D–Bellingham), lays the groundwork for a zero-emissions transportation future. Beyond requirements for the State Building Code Council and Washington State Department of Transportation’s Public-Private Partnership Office, the bill requires electric utilities to analyze how their resource plans account for anticipated levels of zero-emission vehicle use in the utility’s service area.

Dates to remember

HB 1091 received a public hearing in the Senate Environment, Energy and Technology Committee on March 10 at 8 am and is scheduled for executive session in the Committee on March 16 at 10:30 am.

SB 5126 is scheduled for public hearing in the Senate Ways & Means Committee on March 15 at 4 pm, and executive session in the Committee on March 18 at 4 pm.

SB 5000 is scheduled for public hearing in the House Finance Committee on March 15 at 10 am.

HB 1287 is scheduled for public hearing in the Senate Environment, Energy, and Technology Committee on March 18 at 10:30 am.