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SB 5971 - Green fertilizer incentives

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Section 1

  1. The legislature finds that fertilizer represents a significant and volatile input cost for Washington's agricultural producers and that most nitrogen fertilizer used in Washington is imported from out-of-state or foreign sources dependent on fossil natural gas feedstocks.

  2. The legislature further finds that advances in industrial manufacturing now allow for the production of nitrogen fertilizer using renewable energy and air-sourced nitrogen, resulting in substantial reductions in life-cycle greenhouse gas emissions compared to conventional production methods.

  3. The legislature intends to position Washington as a national leader in the development and adoption of domestically produced, low-carbon fertilizer; to strengthen agricultural resilience and supply-chain security; and to create high-wage manufacturing and rural economic opportunities associated with the clean energy transition.

  4. Therefore, the legislature establishes the green fertilizer incentive program within the department of agriculture, to be implemented by rule by July 1, 2028. The legislature further intends that the green fertilizer program is funded in whole or part by appropriations from the accounts created in chapter 70A.65 RCW, known as the climate commitment act, in addition to other sources.

Section 2

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

  1. "Department" means the department of agriculture.

  2. "Green fertilizer" means nitrogen-based fertilizer produced using manufacturing processes that achieve at least an 80 percent reduction in life-cycle greenhouse gas emissions compared to conventional natural gas-based production, as determined by the department.

  3. "Program" means the green fertilizer incentive program created in section 3 of this act.

Section 3

  1. Subject to the availability of amounts appropriated for this specific purpose, the department shall establish and administer the green fertilizer incentive program to promote the in-state production and agricultural utilization of green fertilizer.

  2. The program must be designed consistent with the recommendations of the department's October 2024 report "Incentivizing the Adoption of Washington-Made Green Fertilizer" and may include, but is not limited to:

    1. Price-based reimbursement grants or point-of-sale rebates to farmers purchasing green fertilizer;

    2. Performance-based or production-based incentive payments to in-state green fertilizer manufacturers or distributors;

    3. Equipment and training grants to support adoption of new green fertilizer application technologies; and

    4. Other mechanisms determined by the department to be necessary to encourage use and production of green fertilizer or to reduce the market and adoption risk of green fertilizer.

  3. Eligible participants in the program include, but are not limited to:

    1. Washington farmers, green fertilizer producers, and green fertilizer distributors; and

    2. Tribal governments and tribal agricultural cooperatives.

  4. The department must administer the program in consultation with the department of commerce and the department of ecology to ensure alignment with state manufacturing, energy, and emissions reduction policies.

  5. Implementation costs and the activities described in subsection (2) of this section are subject to appropriation from the climate commitment account created in RCW 70A.65.260.

Section 4

  1. The department shall adopt rules to implement this chapter by July 1, 2028.

  2. The rules adopted under this section must:

    1. Establish eligibility criteria, application procedures, and verification requirements for program participants;

    2. Define a fertilizer price index and establish a methodology for determining reimbursement or incentive levels;

    3. Ensure that all program expenditures and benefits are administered consistent with the environmental justice and equity provisions of chapters 70A.02 and 70A.65 RCW; and

    4. Provide for coordination with other state and federal incentive programs to maximize leverage of private and public investment.

  3. By December 1, 2027, in accordance with RCW 43.01.036, the department must submit a preliminary report to the appropriate committees of the legislature and the governor, summarizing:

    1. The proposed program design;

    2. Cost modeling; and

    3. Readiness for implementation.

  4. The program takes effect upon completion of rule making, subject to the availability of amounts appropriated for this specific purpose, and subsequent appropriation by the legislature.

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