Bill Text: CA SB1420 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Hydrogen production facilities: certification and environmental review.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2024-09-25 - Chaptered by Secretary of State. Chapter 608, Statutes of 2024. [SB1420 Detail]

Download: California-2023-SB1420-Amended.html

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Amended  IN  Assembly  June 24, 2024

Amended  IN  Senate  May 16, 2024

Amended  IN  Senate  April 30, 2024

Amended  IN  Senate  April 08, 2024

Amended  IN  Senate  March 20, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 1420

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Introduced by Senators Caballero, Archuleta, Dodd, and Newman

February 16, 2024

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An act to add amend Section 43869.5 to 43869 of the Health and Safety Code, and to amend Sections 21189.81 and 25545 of the Public Resources Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

SB 1420, as amended, Caballero. Hydrogen.

(1) Existing law requires the State Air Resources Board Board, no later than July 1, 2008, to adopt hydrogen fuel regulations that ensure state funding for the production and use of hydrogen fuel contributes to the reduction of the emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants, and ensure the production and direct use of hydrogen fuel in motor vehicles also contributes to a reduced dependence on petroleum, as provided. Existing law requires that those regulations impose certain requirements relating to emissions from hydrogen fuel and require that, on a statewide basis, no less than 33.3% of the hydrogen produced for, or dispensed by, fueling stations that receive state funds be made from specified renewable energy resources. Existing law requires the state board, in consultation with other relevant agencies, to review the emissions and renewable resource requirements every 4 years and strengthen those requirements if it makes a specified determination. Existing law requires the Secretary for Environmental Protection to convene the California Environmental Protection Agency’s Environmental Justice Advisory Committee at least once annually to solicit the committee’s comments on the production and distribution of hydrogen fuel.

This bill would delete those requirements. The bill would express the policy of the state that hydrogen produced for use in a fuel cell electric vehicle shall have a well-to-gate carbon intensity equal to or less than the carbon intensity of electricity from the California electrical grid when used to power an electric vehicle. The bill would require the state board to adopt regulations requiring that new regulations, or act pursuant to existing regulations or other authority, to ensure that, on a statewide basis, no less than 33.3% of the retail hydrogen produced for, or dispensed by, fueling stations that receive state funds is made by a qualified clean hydrogen project. The bill would also require that no less than 60% of the retail hydrogen produced or dispensed in California for use in transportation is qualified clean hydrogen by December 31, 2045. from those specified renewable energy resources.

Under existing law, a person who knowingly violates regulations adopted by the state board pertaining to motor vehicle fuels is guilty of a misdemeanor.

Because a knowing violation of the hydrogen fuel regulations adopted pursuant to this bill would be a crime, the bill would impose a state-mandated local program.

(2) The California Environmental Quality Act (CEQA) requires preparation of specified documentation before a public agency approves or carries out certain projects. Existing law authorizes the Governor to certify energy infrastructure projects meeting specified requirements for streamlining benefits related to CEQA. Existing law defines “energy infrastructure project” for these purposes to include eligible renewable energy resources under the California Renewables Portfolio Standard Program, excluding resources that use biomass fuels. Existing law expressly excludes from that definition of “energy infrastructure project” any project using hydrogen as a fuel.

This bill would instead exclude from the definition of “energy infrastructure project” for purposes of the CEQA streamlining benefits eligible renewable energy resources under the California Renewables Portfolio Standard Program that combust, rather than use, biomass fuels. The bill would include qualified clean hydrogen projects, as defined, hydrogen production facilities and associated onsite storage and processing facilities that have received funding from the state or federal government on or before January 1, 2032, within the definition of “energy infrastructure project.” Because the bill would authorize the Governor to certify additional projects, thereby increasing the duties on lead agencies in conducting the environmental review of energy infrastructure projects certified by the Governor, this bill would impose a state-mandated local program.

(3) Existing law authorizes persons proposing specified electrical generation, electrical transmission, and energy storage projects to apply, on or before June 30, 2029, to the State Energy Resources Conservation and Development Commission (Energy Commission) to certify sites and related facilities as environmental leadership development projects, as specified. Existing law makes a site and related facility certified by the Energy Commission subject to the streamlining benefits related to CEQA with no further action by the applicant or the Governor. Under existing law, the Energy Commission’s certification is in lieu of any permit, certificate, or similar document required by any governmental agency and supersedes any applicable statute, ordinance, or regulation, except as specified.

This bill would expand the types of facilities eligible to be certified as environmental leadership development projects by the Energy Commission to include qualified clean hydrogen projects, as defined. hydrogen production facilities and associated onsite storage and processing facilities that have received funding from the state or federal government on or before January 1, 2032.

(4) 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 specified reasons.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.Section 43869.5 is added to the Health and Safety Code, to read:

43869.5.

(a)It is the policy of the state that hydrogen produced for use in a fuel cell electric vehicle shall have a well-to-gate carbon intensity equal to or less than the carbon intensity of electricity from the California electrical grid when used to power an electric vehicle. To further this policy, the state board shall develop and adopt regulations that, at a minimum, require both of the following:

(1)On a statewide basis, no less than 33.3 percent of the retail hydrogen produced for, or dispensed by, fueling stations that receive state funds is made by a qualified clean hydrogen project.

(2)On a statewide basis, by December 31, 2045, no less than 60 percent of the retail hydrogen produced or dispensed in California for use in transportation is qualified clean hydrogen.

(b)The state board may adopt interim targets through 2045 for purposes of achieving the requirement described in paragraph (2) of subdivision (a).

(c)For purposes of this section, “qualified clean hydrogen” means hydrogen that is not derived from fossil fuel feedstocks and is produced through a process that results in a well-to-gate life cycle greenhouse gas emissions rate of not greater than four kilograms of carbon dioxide equivalent per kilogram of hydrogen and that has a carbon intensity that is less than or equal to the annual average carbon intensity of the electricity from the California electrical grid, as determined by the state board.

SECTION 1.

 Section 43869 of the Health and Safety Code is amended to read:

43869.

 (a) The To the extent it does not inhibit the state’s ability to access federal incentives, it is the policy of the state that hydrogen produced for use in a fuel cell electric vehicle shall have a well-to-gate carbon intensity equal to or less than the carbon intensity of electricity from the California electrical grid when used to power an electric vehicle.

(b) The state board shall, no later than July 1, 2008, develop and, after at least two public workshops, shall adopt new hydrogen fuel regulations regulations, or act pursuant to existing regulations or other authority, to ensure both of the following:

(1) That state funding for the production and use of hydrogen fuel, as described in the California Hydrogen Highway Blueprint Plan, fuel contributes to the reduction of greenhouse gas emissions, criteria air pollutant emissions, and toxic air contaminant emissions. The regulations, state board, at a minimum, shall do all both of the following:

(A)Require that, on a statewide basis, well-to-wheel emissions of greenhouse gases for the average hydrogen-powered vehicle fueled by hydrogen from fueling stations that receive state funds are at least 30 percent lower than emissions for the average new gasoline vehicle in California when measured on a per-mile basis.

(B)(i)Require

(A) Ensure that, on a statewide basis, no less than 33.3 percent of the hydrogen produced for, or dispensed by, fueling stations that receive state funds be made from eligible renewable energy resources as defined in consistent with Section 399.12 of the Public Utilities Code. Code or the equivalent as determined by the state board.

(ii)If the state board determines that there is insufficient availability of hydrogen fuel from eligible renewable resources to meet the 33.3-percent requirement of this subparagraph, the state board may, after at least one public workshop and on a one-time basis, reduce the requirement by an amount, not to exceed 10 percentage points, that the state board determines is necessary to result in a renewable percentage requirement for hydrogen fuel that is achievable.

(iii)If the executive officer of the state board determines that it is not feasible for a public transit operator to use hydrogen fuel made from eligible renewable resources, the executive officer may exempt the operator from the requirements of this subparagraph for a period of not more than five years and may extend the exemption for up to five additional years.

(C)Prohibit hydrogen fuel producers from counting as a renewable energy resource, pursuant to clause (i) of subparagraph (B), any electricity produced from sources previously procured by a retail seller and verifiably counted by the retail seller towards meeting the renewables portfolio standard obligation, as required by Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code.

(D)Require that all hydrogen fuel dispensed from fueling stations that receive state funds be generated in a manner so that local well-to-tank emissions of nitrogen oxides plus reactive organic gases are at least 50 percent lower than well-to-tank emissions of the average motor gasoline sold in California when measured on an energy equivalent basis.

(E)Require that well-to-tank emissions of relevant toxic air contaminants for hydrogen fuel dispensed from fueling stations that receive state funds be reduced to the maximum extent feasible at each site when compared to well-to-tank emissions of toxic air contaminants of the average motor gasoline fuel on an energy equivalent basis. In no case shall the toxic emissions be greater than the emissions from gasoline on an energy equivalent basis.

(F)

(B) Require that providers of hydrogen fuel for transportation in the state report to the state board the annual mass of hydrogen fuel dispensed and the method by which the dispensed hydrogen was produced and delivered.

(G)Authorize the state board, after at least one public workshop, to grant authority to the executive officer of the state board to exempt from this paragraph, for a period of no more than five years, hydrogen dispensing facilities constructed for small demonstration or temporary purposes. The exemption may be extended on a case-by-case basis upon a finding that the extension will not harm public health. The executive officer may limit the total number of exemptions by geographic region, including by air district, but the average annual mass of hydrogen dispensed from exempted facilities shall not exceed 10 percent of the total mass of hydrogen fuel dispensed for transportation purposes in the state.

(2) That, in any year immediately following a 12-month period in which the mass of hydrogen fuel dispensed for transportation purposes in California exceeds 3,500 metric tons, the production and direct use of hydrogen fuels for motor vehicles in the state, including, but not limited to, any hydrogen highway network that is developed pursuant to the California Hydrogen Highway Blueprint Plan, That hydrogen fuel contributes to a reduced dependence on petroleum, as well as and reductions in greenhouse gas emissions, criteria air pollutant emissions, and toxic air contaminant emissions. For the purpose of this paragraph, the regulations, at a minimum, shall do all of the following:

(A)Require that, on a statewide basis, well-to-wheel emissions of greenhouse gases for the average hydrogen-powered vehicle in California are at least 30 percent lower than emissions for the average new gasoline vehicle in California when measured on a per-mile basis.

(B)Require that, on a statewide basis, no less than 33.3 percent of the hydrogen produced or dispensed in California for motor vehicles be made from eligible renewable energy resources as defined in Section 399.12 of the Public Utilities Code.

(C)Prohibit hydrogen fuel producers from counting as a renewable energy resource, for purposes of subparagraph (B), any electricity produced from sources previously procured by a retail seller and verifiably counted by the retail seller towards meeting the requirements established by the California Renewables Portfolio Standard Program, as set forth in Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code.

(D)Require that all hydrogen fuel dispensed in California for motor vehicles be generated in a manner so that local well-to-tank emissions of nitrogen oxides plus reactive organic gases are at least 50 percent lower than well-to-tank emissions of the average motor gasoline sold in California when measured on an energy equivalent basis.

(E)Require that well-to-tank emissions of relevant toxic air contaminants from hydrogen fuel produced or dispensed in California be reduced to the maximum extent feasible at each site when compared to well-to-tank emissions of toxic air contaminants of the average motor gasoline fuel on an energy equivalent basis. In no case shall the toxic emissions from hydrogen fuel be greater than the toxic emissions from gasoline on an energy equivalent basis.

(F)Authorize the state board, after at least one public workshop, to grant authority to the executive officer of the state board to exempt from this paragraph, for a period of no more than five years, hydrogen dispensing facilities that dispense an average of no more than 100 kilograms of hydrogen fuel per month. The exemption may be extended on a case-by-case basis by the executive officer upon a finding that the extension will not harm public health. The executive officer may limit the total number of exemptions by geographic region, including by air district, but the average annual mass of hydrogen dispensed statewide from exempted facilities shall not exceed 10 percent of the total mass of hydrogen fuel dispensed for transportation purposes in the state.

(G)Authorize the state board, if it determines that reporting is necessary to facilitate enforcement of the requirements of this paragraph, to require that providers of hydrogen fuel for transportation in the state report to the state board the annual mass of hydrogen fuel dispensed and the method by which the dispensed hydrogen was produced and delivered.

(b)Notwithstanding paragraph (2) of subdivision (a), the state board may increase the 3,500-metric-ton threshold in paragraph (2) of subdivision (a) by no more than 1,500 metric tons if at least one of the following requirements is met:

(1)The 3,500-metric-ton threshold is first met prior to January 1, 2011.

(2)The state board determines that the 3,500-metric-ton threshold has been met primarily due to hydrogen fuel consumed in heavy duty vehicles.

(3)The state board determines at a public hearing that increasing the threshold would accelerate the deployment of hydrogen fuel cell vehicles in the state.

(c)The state board, in consultation with other relevant agencies as appropriate, shall review the renewable resource requirements adopted pursuant to this section every four years and shall increase the renewable resource percentage requirements if it determines that it is technologically feasible to do so and will not substantially hinder the development of hydrogen as a transportation fuel in a manner that is consistent with this section.

(d)The state board shall review the emission requirements adopted pursuant to this section every four years and shall strengthen the requirements if it determines it is technologically feasible to do so and will not substantially hinder the development of hydrogen as a transportation fuel in a manner that otherwise is consistent with this section.

(e)The state board shall produce and periodically update a handbook to inform and educate motor vehicle manufacturers, hydrogen fuel producers, hydrogen service station operators, and other interested parties on how to comply with the requirements set forth in this section. This handbook shall be made available on the agency’s Internet Web site on or before July 1, 2009.

(f)The Secretary for Environmental Protection shall convene the California Environmental Protection Agency’s Environmental Justice Advisory Committee at least once annually to solicit the committee’s comments on the production and distribution of hydrogen fuel in the state.

(g)The Secretary for Environmental Protection, in consultation with the state board, shall recommend to the Legislature and the Governor, on or before January 1, 2010, incentives that could be offered to businesses within the hydrogen fuel industry and consumers to spur the development of clean sources of hydrogen fuel.

(h)Unless the context requires otherwise, the definitions set forth in this subdivision govern the construction of this section:

(1)“Well-to-tank emissions” means emissions resulting from production of a fuel, including resource extraction, initial processing, transport, fuel production, distribution and marketing, and delivery into the fuel tank of a consumer vehicle.

(2)“Well-to-wheel emissions” means emissions resulting from production of a fuel, including resource extraction, initial processing, transport, fuel production, distribution and marketing, and delivery and use in a consumer vehicle.

SEC. 2.

 Section 21189.81 of the Public Resources Code is amended to read:

21189.81.

 For purposes of this chapter, the following definitions apply:

(a) “Applicant” means a public or private entity or its affiliates, or a person or entity that undertakes a public works project, that proposes a project and its successors, heirs, and assignees.

(b) “Disadvantaged community” means an area identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code or an area identified as a disadvantaged unincorporated community pursuant to Section 65302.10 of the Government Code.

(c) “Electrical transmission facility project” means a project for the construction and operation of an electrical transmission facility the meets either of the following:

(1) An electrical transmission facility project identified by the Independent System Operator in its annual transmission planning process that meets either of the following criteria:

(A) The project will facilitate delivery of electricity from renewable energy resources or zero-carbon resources.

(B) The project will facilitate delivery of electricity from energy storage projects.

(2) An electrical transmission facility project identified by a local publicly owned electric utility that would satisfy a transmission expansion need approved by the governing body of the local publicly owned electric utility and that meets either of the following criteria:

(A) The project will facilitate delivery of electricity from renewable energy resources or zero-carbon resources.

(B) The project will facilitate delivery of electricity from energy storage projects.

(d) (1) “Energy infrastructure project” means any of the following:

(A) An eligible renewable energy resource, as defined in Section 399.12 of the Public Utilities Code, excluding resources that combust biomass fuels.

(B) New energy storage systems of 20 megawatts or more, that are capable of discharging for at least two hours, provided that a pumped hydro facility may qualify only if it is less than or equal to 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.

(C) A project for which the applicant has certified that a capital investment of at least two hundred fifty million dollars ($250,000,000) made over a period of five years and the project is for either of the following:

(i) The manufacture, production, or assembly of an energy storage system or component manufacturing, wind system or component manufacturing, and solar photovoltaic energy system or component manufacturing.

(ii) The manufacture, production, or assembly of specialized products, components, or systems that are integral to renewable energy or energy storage technologies.

(D) An electrical transmission facility project, provided that nothing in this chapter affects the jurisdiction of the California Coastal Commission pursuant to Division 20 (commencing with Section 30000) to regulate such projects if located in the coastal zone.

(E)A qualified clean hydrogen project, as defined in Section 25545.

(E) A hydrogen production facility and associated onsite storage and processing facilities that have received funding from the state or federal government on or before January 1, 2032.

(2) Any project to develop a facility within the meaning of subdivision (b) of Section 25545 shall meet the requirements of Sections 25545.3.3 and 25545.3.5, except that those requirements shall also apply to solar photovoltaic and terrestrial wind electrical generating power plants with a generating capacity of between 20 and 50 megawatts and energy storage projects capable of storing between 80 and 200 megawatt hours of electrical energy.

(e) “Infrastructure project” means a project that is certified pursuant to Sections 21189.82 and 21189.83 as any of the following:

(1) An energy infrastructure project.

(2) A semiconductor or microelectronic project.

(3) A transportation-related project.

(4) A water-related project.

(f) “Semiconductor or microelectronic project” means a project that meets the requirements related to investment in new or expanded facilities and is awarded funds under the federal Creating Helpful Incentives to Produce Semiconductors Act of 2022 (Public Law 117-167), commonly known as the CHIPS Act of 2022, and the requirements of Section 21183.5.

(g) (1) “Transportation-related project” means a transportation infrastructure project that advances one or more of, and does not conflict with, the following goals related to the Climate Action Plan for Transportation Infrastructure adopted by the Transportation Agency:

(A) Build toward an integrated, statewide rail and transit network.

(B) Invest in networks of safe and accessible bicycle and pedestrian infrastructure.

(C) Include investments in light-, medium-, and heavy-duty zero-emission vehicle infrastructure.

(D) Develop a zero-emission freight transportation system.

(E) Reduce public health and economic harms and maximize community benefits.

(F) Make safety improvements to reduce fatalities and severe injuries of all users towards zero.

(G) Assess and integrate assessments of physical climate risk.

(H) Promote projects that do not significantly increase passenger vehicle travel.

(I) Promote compact infill development while protecting residents and businesses from displacement.

(J) Protect natural and working lands.

(2) Transportation-related projects are public works for the purposes of Section 1720 of the Labor Code and shall comply with the applicable provisions of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

(h) (1) “Water-related project” means any of the following:

(A) A project that is approved to implement a groundwater sustainability plan that the Department of Water Resources has determined is in compliance with Sections 10727.2 and 10727.4 of the Water Code or to implement an interim groundwater sustainability plan adopted pursuant to Section 10735.6 of the Water Code.

(B) (i) A water storage project funded by the California Water Commission pursuant to Chapter 8 (commencing with Section 79750) of Division 26.7 of the Water Code.

(ii) In addition to clause (i), the applicant shall demonstrate that the project will minimize the intake or diversion of water except during times of surplus water and prioritizes the discharge of water for ecological benefits or to mitigate an emergency, including, but not limited to, dam repair, levee repair, wetland restoration, marshland restoration, or habitat preservation, or other public benefits described in Section 79753 of the Water Code.

(C) Projects for the development of recycled water, as defined in Section 13050 of the Water Code.

(D) Contaminant and salt removal projects, including groundwater desalination and associated treatment, storage, conveyance, and distribution facilities. This shall not include seawater desalination.

(E) Projects exclusively for canal or other conveyance maintenance and repair.

(2) Water-related projects are public works for the purposes of Section 1720 of the Labor Code and shall comply with the applicable provisions of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

(3) “Water-related project” does not include the design or construction of through-Delta conveyance facilities of the Sacramento-San Joaquin Delta.

SEC. 3.

 Section 25545 of the Public Resources Code is amended to read:

25545.

 For purposes of this chapter, the following definitions apply:

(a) “California Native American tribe” has the same meaning as set forth in Section 21073.

(b) “Facility” means any of the following:

(1) A solar photovoltaic or terrestrial wind electrical generating powerplant with a generating capacity of 50 megawatts or more and any facilities appurtenant thereto.

(2) An energy storage system as defined in Section 2835 of the Public Utilities Code that is capable of storing 200 megawatthours or more of energy.

(3) A stationary electrical generating powerplant using any source of thermal energy, with a generating capacity of 50 megawatts or more, excluding any powerplant that burns, uses, or relies on fossil or nuclear fuels.

(4) A discretionary project as described in Section 21080 for which the applicant has certified that a capital investment of at least two hundred fifty million dollars ($250,000,000) will be made over a period of five years and the discretionary project is for (A) the manufacture, production, or assembly of an energy storage system or component manufacturing, wind system or component manufacturing, and solar photovoltaic energy system or component manufacturing, or (B) the manufacture, production, or assembly of specialized products, components, or systems that are integral to renewable energy or energy storage technologies.

(5) An electrical transmission line carrying electricity from a facility described in paragraph (1), (2), or (3) that is located in the state to a point of junction with any interconnected electrical transmission system.

(6)(A)A qualified clean hydrogen project.

(B)For purposes of this section, a “qualified clean hydrogen project” means a hydrogen production facility and associated onsite storage and processing facilities that create hydrogen meeting either of the following criteria:

(i)Hydrogen that is not derived from fossil fuel feedstocks and is produced through a process that results in a well-to-gate lifecycle greenhouse gas emissions rate of not greater than four kilograms of carbon dioxide equivalent per kilogram of hydrogen and that has a carbon intensity that is less than or equal to the annual average carbon intensity of the electricity from the California electrical grid, as determined by the State Air Resources Board.

(ii)An electrolysis project using renewable energy resources derived from biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, in a manner that does not result in resource shuffling in the electricity sector, as determined by the State Air Resources Board.

(6) A hydrogen production facility and associated onsite storage and processing facilities that have received funding from the state or federal government on or before January 1, 2032.

(c) “Site” means any location on which an eligible facility is constructed or is proposed to be constructed.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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.