Bill Text: CA SB308 | 2023-2024 | Regular Session | Amended
Bill Title: Net zero greenhouse gas emissions goal: carbon dioxide removal: regulations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-08-15 - August 15 hearing: Held in committee and under submission. [SB308 Detail]
Download: California-2023-SB308-Amended.html
Amended
IN
Assembly
June 05, 2024 |
Amended
IN
Senate
May 18, 2023 |
Amended
IN
Senate
April 10, 2023 |
Amended
IN
Senate
March 14, 2023 |
Introduced by Senator Becker |
February 02, 2023 |
LEGISLATIVE COUNSEL'S DIGEST
Existing law also requires the state board to establish a Carbon Capture, Removal, Utilization, and Storage Program to, among other things, evaluate the
efficacy, safety, and viability of carbon capture, utilization, or storage technologies and carbon dioxide removal technologies and facilitate the capture and sequestration of carbon dioxide from those technologies, where appropriate.
This bill would enact the Carbon Dioxide Removal Market Development Act that would require the state board, no later than December 31, 2027, to adopt a regulation to require certain emitting entities to purchase negative emissions credits equal to a specified amount of their greenhouse gas emissions, as determined by the state board, in each calendar year beginning in the 2028 calendar year in accordance with specified requirements. The bill would require the state board, no later than December 31, 2027, to establish rules and processes for certifying carbon dioxide removal processes that may be used to create negative emissions credits and for tracking negative emissions credits in accordance with certain criteria. The bill would also
require negative emissions resulting from the use of negative emissions credits to be included in the calculation of the state’s net greenhouse gas emissions, as specified.
Because a violation of the requirement to purchase negative emissions credits would be a crime, the 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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
(a) The Legislature finds and declares all of the following:(13)Consistent with the “polluter pays principle,” the entities responsible for GHG emissions should be responsible for paying for CDR sufficient to balance the impact on climate change of those GHG emissions.
(14)
This article shall be known, and may be cited, as the Carbon Dioxide Removal Market Development Act.
For purposes of this article, the following definitions apply:
(a)“Carbon dioxide equivalent” has the same meaning as defined in Section 38505.
(b)“Carbon dioxide removal process” means a process using biological means, chemical means, physical means, or any combination of these means, including the use of CDR technology as defined in Section 39741, that results in a net reduction in atmospheric carbon dioxide and puts carbon atoms into a form of carbon sequestration.
(c)“Carbon sequestration” means storing carbon atoms in a geological location or in a stable chemical form so that the geological location or the stable chemical form keeps the carbon atoms from entering the
atmosphere as carbon dioxide for a period of time.
(d)“Direct climate mitigation benefits to the state” means a local reduction in atmospheric carbon dioxide concentration within the state caused by removing carbon dioxide from the atmosphere within or sufficiently close to that area.
(e)“Durable carbon sequestration method” means a method of carbon sequestration that can reasonably be projected to retain a large majority of the carbon atoms out of the atmosphere for 1,000 years and for which the responsible entity provides a guarantee period of at least 100 years.
(f)“Emitting entity” means an entity that is responsible for greenhouse gas emissions included within the state’s inventory and has an obligation to balance the impact of some or all of those greenhouse gas emissions through the purchase of negative emissions
credits pursuant to Section 39742.4.
(g)“Guarantee period” means the period of time during which the responsible entity is required to ensure that the carbon remains sequestered and to replace any carbon that is lost.
(h)“Negative emissions credit” means a tradeable environmental attribute representing one metric ton of net carbon dioxide removed by a carbon dioxide removal process.
(i)“Negative emissions obligation” means the amount of negative emissions credits an emitting entity is required to purchase and retire each year in order to partially or fully balance the impact of the greenhouse gas emissions for which the emitting entity is responsible.
(j)“Neighboring communities” means the local government, residents, and other private entities in areas that are in close proximity to
facilities used in a carbon dioxide removal process.
(k)“Net carbon dioxide removed” means the net amount of carbon dioxide, by mass, that is removed by a carbon dioxide removal process per ton of carbon put into carbon sequestration, as measured over the full lifecycle of the process, including any greenhouse gas emissions caused by the use of energy or fuels to drive the process, transport the captured carbon, or sequester the carbon.
(l)“Responsible entity” means a business, organization, or other entity that is responsible for ensuring that sequestered carbon is monitored and verified during the guarantee period and is responsible for replacing any losses to the sequestered carbon during the guarantee period.
(m)“Temporary carbon sequestration method” means any method of carbon sequestration that does not
meet the criteria for a durable carbon sequestration method.
(a)No later than December 31, 2027, the state board shall establish rules and processes for certifying carbon dioxide removal processes that may be used to create negative emissions credits and for tracking negative emissions credits. In establishing these rules and processes, the state board shall consider all of the following:
(1)Criteria to ensure that certified carbon dioxide removal processes result in reductions in atmospheric carbon dioxide that are real, quantifiable, verifiable, and enforceable by the state board and are in addition to any carbon dioxide removals that are otherwise required by law or regulation. Only processes that result in removals of carbon dioxide from the atmosphere, not avoidance of or reduction of greenhouse gas emissions, may be certified for the purpose of creating negative emissions credits.
(2)A method to determine the net carbon dioxide removed by each certified carbon dioxide removal process.
(3)Criteria to determine whether each certified carbon dioxide removal process qualifies as using a durable carbon sequestration method.
(4)Requirements for scientifically rigorous and transparent methods for monitoring, reporting, and verification by responsible entities.
(5)Requirements for responsible entities to replace any losses in sequestered carbon during the guarantee period with newly sequestered carbon representing an equal amount of net carbon dioxide removed.
(6)Financial responsibility requirements for responsible entities to demonstrate that they, or another entity on their behalf, has the financial ability to meet their obligations during the guarantee period, such as through the use of surety bonds or other insurance products.
(7)A method of tracking the creation, transfer of ownership, and retirement of negative emissions credits based on certified carbon dioxide removal processes so that the environmental attributes of each negative emissions credit will be counted only once for the purpose of meeting any regulatory or voluntary carbon dioxide removal targets or net greenhouse gas emissions targets.
(b)(1)The state board may develop rules to create two-phase negative emissions credits that can meet the requirements of subdivision (e) of Section 39742.4 for durable carbon sequestration, such as a combination of the following:
(A)A negative emissions credit using a temporary carbon sequestration method.
(B)A legally binding commitment to purchase another negative emissions credit using a durable carbon sequestration method at the end of the guarantee period of the original temporary negative emissions credit.
(2)For any two-phase negative emissions credits created pursuant to this section, the state board shall do all of the following:
(A)Establish a method for tracking compliance with future negative emission credit purchase commitments.
(B)Establish financial responsibility requirements to ensure that the responsible entity can demonstrate that they, or another entity on their behalf, has the financial ability to meet their obligations, such as through the use of surety bonds or other insurance products.
(a)The state board shall not certify a carbon dioxide removal process pursuant to Section 39742.2 if the process is used for purposes of enhanced oil recovery, including the facilitation of enhanced oil recovery from another well.
(b)(1)The state board may elect not to certify a carbon dioxide removal process pursuant to Section 39742.2 if it determines the benefits generated by the carbon dioxide removal process do not outweigh the impacts caused by the carbon dioxide removal
process, including, but not limited to, benefits and impacts to neighboring communities.
(2)In making the determination pursuant to paragraph (1), the state board shall consider at least all of the following:
(A)Impacts on deforestation or the displacement of agricultural land to grow dedicated biomass for carbon sequestration.
(B)Impacts on neighboring communities from increases in criteria air pollutants caused by equipment used to capture, transport, sequester, or monitor the carbon.
(C)Benefits to neighboring communities from investment, jobs, and tax revenues associated with carbon dioxide removal processes.
No later than December 31, 2027, the state board shall adopt a regulation to require emitting entities to purchase negative emissions credits equal to a portion of their greenhouse gas emissions in each calendar year beginning with greenhouse gas emissions for calendar year 2028 in accordance with all of the following:
(a)Except as provided in subdivision (b), only emitting entities with an obligation to report their greenhouse gas emissions pursuant to the regulation adopted by the state board pursuant to Section 38530 and who report 25,000 metric tons or more of greenhouse gas emissions per year shall be considered emitting entities for the purposes of this article.
(b)The state board may include additional entities
as emitting entities if the annual greenhouse gas emissions of those entities can be estimated with reasonable accuracy and without an unreasonable measurement burden on those entities.
(c)The regulation shall establish a negative emissions obligation that requires emitting entities to purchase negative emissions credits equal to a percentage of the carbon dioxide equivalent of their greenhouse gas emissions for each calendar year, as determined by the state board pursuant to subdivision (d).
(d)The state board shall determine the percentage required pursuant to subdivision (c) for each year, beginning with calendar year 2028, with the goal of increasing the total capacity to provide negative emissions credits over time in order to meet the state’s net zero greenhouse gas emissions policy set forth in Section 38562.2. Those percentages shall
be at least the following percentages in the following years:
(1)One percent in 2030.
(2)Eight percent in 2035.
(3)Thirty-five percent in 2040.
(4)One hundred percent in 2045.
(e)Only negative emissions credits using a durable carbon sequestration method may be used to meet an emitting entity’s negative emissions obligation.
(f)If the state board develops rules to create two-phase negative emissions credits pursuant to subdivision (b) of Section 39742.2, no more than 50 percent of the negative emissions credits used by an emitting entity to meet its negative emissions obligation in any calendar year may be two-phase emissions credits.
(g)At least 50 percent of the negative emissions credits used by
an emitting entity to meet its negative emissions obligation in any calendar year shall be from carbon dioxide removal processes that provide direct climate mitigation benefits to the state.
(h)The state board may adjust any of the percentages specified in subdivision (g) or in paragraphs (1) to (4), inclusive, of subdivision (d) to a lower figure if it determines that it would be infeasible for emitting entities to comply with those requirements.
(i)The state board may allow an emitting entity to reserve negative emissions credits purchased in excess of its obligation in a calendar year pursuant to subdivision (c) and to use those negative emissions credits to meet its obligation in a future calendar year.
(j)Negative emissions resulting from the use of negative emissions credits for the purpose of complying with the
obligation pursuant to subdivision (c) shall be included in the calculation of the state’s net greenhouse gas emissions pursuant to Section 38562.2, even if those negative emissions occurred outside of the state.
The provisions of this article are severable. If any provision of this article or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
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.
SEC. 2.
Section 38562.2 of the Health and Safety Code is amended to read:38562.2.
(a) This section shall be known, and may be cited, as the California Climate Crisis Act.(d)
(e)