wa-law.org > bill > 2025-26 > HB 1912 > Substitute Bill
For sales of fuel for which the associated emissions are exempt from coverage under RCW 70A.65.080(7)(e):
[Empty]
A retail fuel seller to a person who uses the fuel for exempt purposes may elect to register with the department as an exempt fuel retailer. A fuel seller electing to track and report exempt fuel sales beginning January 1, 2026, must register with the department by December 15, 2025, consistent with subsection (2) of this section, and must annually update its registration with the department by December 15th of each year for purposes of the following calendar year.
A retail fuel seller that elects to register with the department must track and report, upon request and no less often than quarterly, the volume of exempt fuel sales to either the person that supplied the fuel to the retail fuel seller or to the covered entity or opt-in entity under this chapter responsible for the fuel.
A retail fuel seller that elects to register with the department under this section must accept the certificate developed by the department under RCW 70A.65.080(7)(e). A registered exempt retail fuel seller under this section must make available exempt fuel.
A retail fuel seller that does not register with the department may not sell exempt fuels or report the sales of exempt fuels to another fuel seller, including a covered entity or opt-in entity, under this section as exempt under RCW 70A.65.080(7)(e);
[Empty]
Any fuel seller that is not a covered or opt-in fuel supplier or a retail fuel seller specified in (a) or (c) of this subsection must register with the department consistent with subsection (2) of this section within 30 days of receipt of a request by either the person that sold the fuel to the fuel supplier or by the fuel supplier with a compliance obligation associated with the fuel. Such a fuel seller must track and report to the requester no less frequently than quarterly, the volume of their fuel sales reported as exempt by retail fuel sellers under (a) of this subsection.
A fuel seller that sells exempt fuel, including a retail fuel seller that is registered with the department, must make available exempt fuel for purchase at a differential rate that reflects the differential rate charged by the covered or opt-in fuel supplier with a compliance obligation for that fuel as required under (c)(iv) of this subsection or must credit the fuel purchaser in a manner that compensates the fuel purchaser consistent with that differential rate.
[Empty]
Each fuel supplier covered or opted-in under this chapter must annually report to the department the volume of exempt fuel sales reported to it by retail fuel sellers under (a) of this subsection and by fuel sellers under (b) of this subsection.
Fuel suppliers that are covered or opt-in entities under this chapter must report their volumes of exempt fuel sales, and the greenhouse gas emissions associated with the exempt fuel sales, in conjunction with but as a separate and distinct portion of, reports submitted under RCW 70A.15.2200. The department may require the covered or opt-in entity to submit data or documentation of exempt fuel sales reported to the covered or opt-in entity by retail fuel sellers under (a) of this subsection and by fuel sellers under (b) of this subsection.
A fuel supplier may not claim the exemption from the compliance obligation under RCW 70A.65.080(7)(e) for fuel sold by a retail fuel seller that has not registered with the department and does not directly or indirectly report exempt fuel sales to the supplier.
A fuel supplier that is a covered or opt-in entity that sells exempt fuel must make available exempt fuel for purchase at a differential rate that reflects the lack of associated compliance costs under this chapter or must credit the purchaser in a manner that compensates the purchaser for the differential cost of exempt sales.
A fuel seller required or electing to track and report exempt fuel sales beginning January 1, 2026, must register with the department by December 15, 2025, by submitting, to an email address or via on online form developed by the department, the following:
The address, if applicable, of retail fuel sales locations at which exempt fuel is to be sold, tracked, and reported;
The name, phone number, email address, and address of at least two persons designated as points of contact for the registering fuel seller;
The service area of the company or retail location;
The types of exempt fuels sold at each retail location; and
The latitude and longitude coordinates such that the location can be displayed on a map.
The department must post and periodically update on its website a list, by county and, if applicable, city, of the name and address of each retail fuel seller that has elected to participate as an exempt fuel retail seller under subsection (1)(a) of this section.
[Empty]
The department may adopt rules to implement, administer, and enforce the requirements of this section.
Upon request, a fuel seller required to track and report information under subsection (1) of this section must provide the department documentation of tracked or reported exempt fuel sales volumes within 14 business days.
Violations of the requirements of this section are subject to penalties as provided in RCW 70A.65.200(5).
Nothing in this section establishes, limits, or otherwise alters the obligation of a person to be a covered or opt-in entity under RCW 70A.65.080 or an opt-in entity under RCW 70A.65.090(3) or to report emissions under RCW 70A.15.2200.
The requirements of this section apply to sales of exempt fuel occurring on or after January 1, 2026.
A person is a covered entity as of the beginning of the first compliance period and all subsequent compliance periods if the person reported emissions under RCW 70A.15.2200 for any calendar year from 2015 through 2019, or if additional data provided as required by this chapter indicates that emissions for any calendar year from 2015 through 2019 equaled or exceeded any of the following thresholds, or if the person is a first jurisdictional deliverer and imports electricity into the state during the compliance period:
Where the person owns or operates a facility and the facility's emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent;
Where the person is a first jurisdictional deliverer and generates electricity in the state and emissions associated with this generation equals or exceeds 25,000 metric tons of carbon dioxide equivalent;
[Empty]
(A) For specified sources, the cumulative annual total of emissions associated with the imported electricity exceeds 25,000 metric tons of carbon dioxide equivalent;
(B) For unspecified sources, the cumulative annual total of emissions associated with the imported electricity exceeds 0 metric tons of carbon dioxide equivalent; or
(C) For electricity purchased from a federal power marketing administration pursuant to section 5(b) of the Pacific Northwest electric power planning and conservation act of 1980, P.L. 96-501, if the department determines such electricity is not from a specified source, the cumulative annual total of emissions associated with the imported electricity exceeds 25,000 metric tons of carbon dioxide equivalent.
ii. In consultation with any linked jurisdiction to the program created by this chapter, by October 1, 2026, the department, in consultation with the department of commerce and the utilities and transportation commission, shall adopt by rule a methodology for addressing imported electricity associated with a centralized electricity market;
d. Where the person is a supplier of fossil fuel other than natural gas and from that fuel 25,000 metric tons or more of carbon dioxide equivalent emissions would result from the full combustion or oxidation, excluding the amounts for fuel products that are produced or imported with a documented final point of delivery outside of Washington and combusted outside of Washington; and
e. [Empty]
i. Where the person supplies natural gas in amounts that would result in exceeding 25,000 metric tons of carbon dioxide equivalent emissions if fully combusted or oxidized, excluding the amounts for fuel products that are produced or imported with a documented final point of delivery outside of Washington and combusted outside of Washington, and excluding the amounts: (A) Supplied to covered entities under (a) through (d) of this subsection; and (B) delivered to opt-in entities;
ii. Where the person who is not a natural gas company and has a tariff with a natural gas company to deliver to an end-use customer in the state in amounts that would result in exceeding 25,000 metric tons of carbon dioxide equivalent emissions if fully combusted or oxidized, excluding the amounts: (A) Supplied to covered entities under (a) through (d) of this subsection; and (B) the amounts delivered to opt-in entities;
iii. Where the person is an end-use customer in the state who directly purchases natural gas from a person that is not a natural gas company and has the natural gas delivered through an interstate pipeline to a distribution system owned by the purchaser in amounts that would result in exceeding 25,000 metric tons of carbon dioxide equivalent emissions if fully combusted or oxidized, excluding the amounts: (A) Supplied to covered entities under (a) through (d) of this subsection; and (B) delivered to opt-in entities.
A person is a covered entity as of the beginning of the second compliance period and all subsequent compliance periods if the person reported emissions under RCW 70A.15.2200 or provided emissions data as required by this chapter for any calendar year from 2023 through 2025, where the person owns or operates a waste to energy facility utilized by a county and city solid waste management program and the facility's emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent.
A person is a covered entity as of the beginning of the third compliance period, and all subsequent compliance periods if the person reported emissions under RCW 70A.15.2200 or provided emissions data as required by this chapter for 2027 or 2028, where the person owns or operates a railroad company, as that term is defined in RCW 81.04.010, and the railroad company's emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent.
When a covered entity reports, during a compliance period, emissions from a facility under RCW 70A.15.2200 that are below the thresholds specified in subsection (1) or (2) of this section, the covered entity continues to have a compliance obligation through the current compliance period. When a covered entity reports emissions below the threshold for each year during an entire compliance period, or has ceased all processes at the facility requiring reporting under RCW 70A.15.2200, the entity is no longer a covered entity as of the beginning of the subsequent compliance period unless the department provides notice at least 12 months before the end of the compliance period that the facility's emissions were within 10 percent of the threshold and that the person will continue to be designated as a covered entity in order to ensure equity among all covered entities. Whenever a covered entity ceases to be a covered entity, the department shall notify the appropriate policy and fiscal committees of the legislature of the name of the entity and the reason the entity is no longer a covered entity.
For types of emission sources described in subsection (1) of this section that begin or modify operation after January 1, 2023, and types of emission sources described in subsection (2) of this section that begin or modify operation after 2027, coverage under the program starts in the calendar year in which emissions from the source exceed the applicable thresholds in subsection (1) or (2) of this section, or upon formal notice from the department that the source is expected to exceed the applicable emissions threshold, whichever happens first. Sources meeting these conditions are required to transfer their first allowances on the first transfer deadline of the year following the year in which their emissions were equal to or exceeded the emissions threshold.
For emission sources described in subsection (1) of this section that are in operation or otherwise active between 2015 and 2019 but were not required to report emissions for those years under RCW 70A.15.2200 for the reporting periods between 2015 and 2019, coverage under the program starts in the calendar year following the year in which emissions from the source exceed the applicable thresholds in subsection (1) of this section as reported pursuant to RCW 70A.15.2200 or provided as required by this chapter, or upon formal notice from the department that the source is expected to exceed the applicable emissions threshold for the first year that source is required to report emissions, whichever happens first. Sources meeting these criteria are required to transfer their first allowances on the first transfer deadline of the year following the year in which their emissions, as reported under RCW 70A.15.2200 or provided as required by this chapter, were equal to or exceeded the emissions threshold.
The following emissions are exempt from coverage in the program, regardless of the emissions reported under RCW 70A.15.2200 or provided as required by this chapter:
Emissions from the combustion of aviation fuels;
Emissions from watercraft fuels supplied in Washington that are combusted outside of Washington;
Emissions from a coal-fired electric generation facility exempted from additional greenhouse gas limitations, requirements, or performance standards under RCW 80.80.110;
Carbon dioxide emissions from the combustion of biomass or biofuels;
[Empty]
Motor vehicle fuel or special fuel that is used exclusively for agricultural purposes by a farm fuel user. This exemption is available only if a buyer of motor vehicle fuel or special fuel provides the seller with an exemption certificate in a form and manner prescribed by the department. For the purposes of this subsection, "agricultural purposes" and "farm fuel user" have the same meanings as provided in RCW 82.08.865.
The department must determine a method for expanding the exemption provided under (e)(i) of this subsection to include fuels used for the purpose of transporting agricultural products on public highways. The department must maintain this expanded exemption for a period of five years, in order to provide the agricultural sector with a feasible transition period.
The exemptions specified in (e)(i) and (ii) of this subsection must be implemented consistent with section 1 of this act. Fuel sold by a retail fuel seller who has not registered with the department under section 1 of this act does not qualify for the exemptions specified in (e)(i) or (ii) of this subsection.
Emissions from facilities with North American industry classification system code 92811 (national security); and
Emissions from municipal solid waste landfills that are subject to, and in compliance with, chapter 70A.540 RCW.
The department shall not require multiple covered entities to have a compliance obligation for the same emissions. The department may by rule authorize refineries, fuel suppliers, facilities using natural gas, and natural gas utilities to provide by agreement for the assumption of the compliance obligation for fuel or natural gas supplied and combusted in the state. The department must be notified of such an agreement at least 12 months prior to the compliance obligation period for which the agreement is applicable.
[Empty]
The legislature intends to promote a growing and sustainable economy and to avoid leakage of emissions from manufacturing to other locations. The legislature further intends to see innovative new businesses locate and grow in Washington that contribute to Washington's prosperity and environmental objectives.
Consistent with the intent of the legislature to avoid the leakage of emissions to other jurisdictions, in achieving the state's greenhouse gas limits in RCW 70A.45.020, the state, including lead agencies under chapter 43.21C RCW, shall pursue the limits in a manner that recognizes that the siting and placement of new or expanded best-in-class facilities with lower carbon emitting processes is in the economic and environmental interests of the state of Washington.
In conducting a life-cycle analysis, if required, for new or expanded facilities that require review under chapter 43.21C RCW, a lead agency must evaluate and attribute any potential net cumulative greenhouse gas emissions resulting from the project as compared to other existing facilities or best available technology including best-in-class facilities and emerging lower carbon processes that supply the same product or end use. The department may adopt rules to determine the appropriate threshold for applying this analysis.
Covered emissions from an entity that is or will be a covered entity under this chapter may not be the basis for denial of a permit for a new or expanded facility. Covered emissions must be included in the analysis undertaken pursuant to (c) of this subsection. Nothing in this subsection requires a lead agency or a permitting agency to approve or issue a permit to a permit applicant, including to a new or expanded fossil fuel project.
A lead agency under chapter 43.21C RCW or a permitting agency shall allow a new or expanded facility that is a covered entity or opt-in entity to satisfy a mitigation requirement for its covered emissions under this chapter and under any greenhouse gas emission mitigation requirements for covered emissions under chapter 43.21C RCW by submitting to the department the number of compliance instruments equivalent to its covered emissions during a compliance period.
This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.