SB5447 – Supporting production and use of lower emission jet fuels, renewable fuels, and green electrolytic hydrogen.
Prime Sponsor – Senator Billig (D; 3rd District; Spokane) (Twenty-one co-sponsors)
Current status – Had a hearing in the House Committee on Environment and Energy March 13th. Replaced by a striker and passed out of committee March 21st. Had a hearing in House Finance March 28th. Amended there and passed out of committee March 31st. Referred to Rules and passed by the House April 14th. Senate concurred in House amendments April 19th.
Next step would be – To the Governor.
Legislative tracking page for the bill.
Changes in the House –
The changes made in the striker in Environment & Energy are summarized by staff at the end of it.
The Legislative tracking page for the bill says that then it was passed “with amendment(s) but without amendment(s) by Environment & Energy in Finance. (I don’t understand this, since as far as I can see, the only amendment in Environment & Energy was the striker, and that seems to be what was adopted and then amended in Finance.) If I understand it correctly, one of those amendments would change the definition of the alternative jet fuels which are eligible for the tax credits from ones which met the current carbon intensity standard for the Clean Fuels Program as of the bill’s effective date to ones which had a lower carbon intensity than the conventional fuel for which they could substitute, according to a full life-cycle analysis done at the time of the application for the credits. The other would make alternative jet fuels produced at “a location that is either a historic cemetery or tribal burial ground” ineligible for the tax credits.
In the Senate – Passed
Had a hearing in the Senate Committee on Environment, Energy & Technology February 1st. Replaced by a substitute and passed out of committee February 7th. Referred to Ways and Means, and had a hearing there on February 20th. Passed out of committee February 24th and referred to Rules. Replaced by a striker on the floor and passed by the Senate March 1st.
Substitutes
This would limit the carry over of credits to the next year, and make a number of other minor adjustments that staff summarizes at the beginning of it. There’s a staff summary of the changes made by the striker at the end of it.
Summary –
The bill defines “alternative jet fuels” as ones made from petroleum or nonpetroleum sources that can be blended with conventional jet fuels without the need to modify engines or the existing distribution infrastructure, and that have a lower carbon intensity than the applicable clean fuels standard for diesel and diesel substitutes. (That’s based on gradually increasing reductions from their carbon intensity in 2017.) The bill would also require Ecology to “amend the energy economy ratio for alternative jet fuel relative to conventional jet fuel from the value of 1.0 to 1.3” within ten years after a facility capable of producing at least twenty million gallons of alternative jet fuel began operating in the state. That ratio would then have to be reduced by 0.1% every three years until it was back to 1.0. (I’m not sure about the point of this, but I think it’s about creating a higher carbon intensity baseline for it under WAC 173-424-620, so it would be easier to get credits under the Clean Fuels Act for a given reduction in its carbon intensity.) Ecology would also be required to allow biomethane to be claimed as a feedstock for alternative jet fuel in the same way it was treated with respect to natural gas and hydrogen production.
Once the bill’s in-state production requirement was met, it would lower the B&O tax on its manufacturing and sales for ten years, from the standard B&O 0.484% tax rate on manufacturing to 0.275%. It would also provide businesses producing it in counties with fewer than 650,000 people or a business’s designated alternative jet fuel blender anywhere in the state with a credit of $1.00/gallon against the remaining B&O tax if the fuel had at least 50% lower CO2e emissions than conventional fuel. The credit would increase by 2¢/gallon for each additional one percent reduction in emissions, up to a limit of $2/gallon. Sales contracts with final consumers would have to “reflect” any bonus credits, and the bill would provide the same bonus credits for consumers using those fuels with additional emissions reductions for flights originating in the state. Credits could be carried over and used to offset taxes in later years.
The bill would require the Office of Clean Technology at WSU to convene an alternative jet fuels work group with various stakeholders to further the development of alternative jet fuel as a productive industry in the state. It would provide a report including recommendations to the Governor and appropriate committees of the Legislature by December of every even-numbered year until 2028.
The bill would create a statewide Office of Renewable Fuels in the Department of Commerce to accelerate market development with assistance along the entire life cycle of renewable fuel projects; and support their research, development, and deployment, as well as the production, distribution, and use of renewable and green electrolytic hydrogen, and product engineering and manufacturing related to its production and use. It would drive job creation, improve economic vitality, and support the transition to clean energy; further the development and use of alternative jet fuels; enhance resiliency by using renewable fuels, alternative jet fuels, and green electrolytic hydrogen to support climate change mitigation and adaptation; and partner with overburdened communities to ensure communities equitably benefit from these efforts.
The office would coordinate with a range of parties to facilitate and promote collaborations to drive research, development, and deployment of alternative jet fuels and renewable fuels including green electrolytic hydrogen; review initiatives, policies, and public and private investments for these fuels; consider opportunities for coordinating public and private funding; assess opportunities for and barriers to deploying these fuels in hard to decarbonize sectors of the state economy; request recommendations from the Washington State Association of Fire Marshals about national safety standards for them; develop a plan and recommendations regarding them for consideration by the Legislature and Governor, including project permitting, state procurement, and pilot projects; and encourage new and existing public-private partnerships to increase coordinated planning for them and their deployment. The Office could apply for Federal funds and other grants, as well as accepting donations. It would be required to collaborate with the work group and a long list of other agencies and interested parties. It might cooperate with other agencies to compile data on the use of renewable fuels and green electrolytic hydrogen in state operations.