Bill Text: CA AB43 | 2023-2024 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Greenhouse gas emissions: building materials: embodied carbon trading system.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2023-10-07 - Chaptered by Secretary of State - Chapter 316, Statutes of 2023. [AB43 Detail]
Download: California-2023-AB43-Amended.html
NOYES
Local Program:
NOYES
SECTION 1.
Bill Title: Greenhouse gas emissions: building materials: embodied carbon trading system.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2023-10-07 - Chaptered by Secretary of State - Chapter 316, Statutes of 2023. [AB43 Detail]
Download: California-2023-AB43-Amended.html
|
Amended
IN
Assembly
March 02, 2023 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 43
| Introduced by Assembly Member Holden |
December 05, 2022 |
An act to add Section 38561.6 to the Health and Safety Code, relating to greenhouse gas emissions.
LEGISLATIVE COUNSEL'S DIGEST
AB 43, as amended, Holden.
Greenhouse gas emissions: building materials: credit trading platform and compliance embodied carbon trading system.
The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. Under the act, a violation of a rule, regulation, order, emission limitation, emission reduction measure, or other measure adopted by the state board under the act is a crime.
Existing law requires the state board, by July 1, 2023, to develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of greenhouse gases associated with cement used within the state as soon as possible, but no later than December 31, 2045. Existing law,
effective January 1, 2023, requires the state board, by July 1, 2025, to develop, in consultation with specified stakeholders, a framework for measuring and then reducing the average carbon intensity of the materials used in the construction of new buildings, including those for residential uses.
This bill would require the state board to establish an embodied carbon trading system, as defined, and would make it applicable to building materials providers, developers, architectural and engineering firms, and construction companies. The bill would require the state board to integrate the embodied carbon trading system into the framework on or before December 31, 2026, and to implement the system on and after January 1, 2029. The bill would require the state board to adopt rules and regulations for the credit allocation method, the anticipated carbon price in the scheme, and trading periods, and would make a violation of a rule, regulation, order, emission limitation,
emissions reduction measure, or other measure adopted by the state board pursuant to these and other requirements of the bill an emission of an air contaminant for the purposes of the penalty provisions of the act. The bill would also require the state board to periodically review and update its emission reporting requirements, as necessary. By expanding the scope of crimes, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. Existing law requires the state board, by July 1, 2023, to develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of greenhouse gases associated with cement used within the state as soon as possible, but no later than December 31, 2045. Existing law, effective January 1, 2023, requires the state board, by July 1, 2025, to develop, in consultation with specified stakeholders, a framework for measuring and then reducing the average carbon intensity of the materials used in the construction of new buildings, including those for residential uses.
This bill would express the intent of the Legislature to enact future
legislation establishing a Low Carbon Product Standard (LCPS) to facilitate a credit trading platform for building materials. The bill would express the further intent of the Legislature to enact future legislation to require that the LCPS establish a compliance system for purposes of the provisions described above.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 38561.6 is added to the Health and Safety Code, to read:38561.6.
(a) For purposes of this section, the following definitions apply:(1) “Building materials providers” includes, but is not limited to, building materials manufacturers.
(2) “Carbon intensity” means the quantity of life-cycle greenhouse gas emissions per unit of building material, and specifically the ratio between the net upstream carbon dioxide impact (emissions minus storage) of a material and the weight of the material.
(3) “Embodied carbon trading system” means a market-based credit trading platform of greenhouse gas emissions exchanges, banking, credits, and other transactions, governed by rules and
protocols established by the state board, that result in the same greenhouse gas emission reduction, over the same time period, as direct compliance with a greenhouse gas emission limit or emission reduction measure adopted by the state board pursuant to this division.
(4) “Full material life-cycle” means the aggregate of greenhouse gas emissions of a building material, including direct emissions and significant indirect emissions, such as significant indirect emissions associated with material production, including those that arise from extracting, producing, transporting, manufacturing, as well as the operational and end-of-life emissions associated with those materials.
(5) “Low carbon product standard” means a framework created pursuant to Section 38561.3 to reduce by 40 percent the carbon intensity of the materials used in newly constructed buildings and within the embodied
carbon trading system, to facilitate a credit trading platform for building materials along with other requirements as specified.
(b) The state board shall establish an embodied carbon trading system in compliance with the requirements set forth in Section 38561.3 and this section that meets both of the following requirements:
(1) The system shall apply to building materials providers, developers, architectural and engineering firms, and construction companies.
(2) The embodied carbon trading system unit of measurement shall be Global Warming Potential (GWP) per gross square foot (kg CO2 e/sq. ft.2).
(c) The state board shall have the flexibility to design the embodied carbon trading system and shall do all of the following:
(1) (A) Adopt rules and regulations for the credit allocation method, the anticipated carbon price in the scheme, and trading periods.
(B) In developing the rules and regulations for the credit allocation method, including those governing any tradeable compliance instrument, make efforts to avoid an overabundance of compliance credits in the market, and, to this end, may consider setting an upper limit on amount of credits that can be generated per unit of material.
(2) Consider using the credits generated through the use of the embodied carbon trading system to help promote innovation and investment in building construction materials.
(3) Consider all relevant information pertaining to low-carbon building materials reduction programs
in other states, localities, and nations, including other states, Canada, and the European Union, and, in doing so, review existing and proposed international, federal, and state greenhouse gas emission reporting programs, make reasonable efforts to promote consistency among the programs established pursuant to this division and other programs, and streamline reporting requirements on greenhouse gas emission sources.
(4) Integrate the embodied carbon trading system with the framework described in Section 38561.3 on or before December 31, 2026, and shall implement that system on and after January 1, 2029.
(5) Consult with the California Building Standards Commission, the Department of Housing and Community Development, and the State Energy Resources Conservation and Development Commission in the development of building regulations, in order to minimize duplicate or inconsistent
regulatory requirements.
(d) The state board shall have the discretion to adopt further greenhouse gas emission reduction targets within the scope of Section 38561.3 prior to December 31, 2035, to alter the interim 2030 target as appropriate, or provide early reduction credit considering market adoption, if appropriate.
(e) In developing its plan, the state board shall identify opportunities for emission reduction measures from all verifiable and enforceable voluntary actions, and best management practices.
(f) (1) The state board shall adopt rules and regulations to monitor, verify, and enforce voluntary greenhouse gas emission reductions from building materials that are authorized by the state board for use to comply with limits established by the state board pursuant to Section 38561.3.
(2) The state board shall adopt rules and regulations in an open public process to achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions from construction building materials.
(3) The rules and regulations adopted by the state board pursuant to this section shall achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions from construction building materials, in furtherance of achieving the statewide greenhouse gas emissions limit.
(4) The state board shall minimize the administrative burden of implementing and complying with these regulations when possible.
(5) The state board shall consider the cost-effectiveness of these rules and regulations, but shall not limit
consideration to monetary costs and benefits. The state board shall also consider overall societal benefits, including reductions in other air pollutants, diversification of energy sources, and other benefits to the economy, environment, and public health.
(g) The state board may consider the use of third parties, such as verifiers, for purposes of implementing the requirements of this section.
(h) A violation of a rule, regulation, order, emission limitation, emissions reduction measure, or other measure adopted by the state board pursuant to this section shall be deemed to result in an emission of an air contaminant for the purposes of the penalty provisions of this division.
(i) The state board shall periodically review and update its emission reporting requirements, as necessary.
(j) This section does not authorize the creation of a revenue-generating program or any other program that would result in moneys being paid to the state, other than penalties imposed for a violation of this section.
SEC. 2.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.It is the intent of the Legislature to enact future legislation establishing a Low Carbon Product Standard (LCPS) to facilitate a credit trading platform for building materials. It is the further intent of the Legislature to enact future legislation to require that the LCPS establish a compliance system for Sections 38561.2 and 38561.3 of the Health and Safety Code.
