Bill Amendment: IL SB1556 | 2023-2024 | 103rd General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: EPA-CLEAN TRANSPORT STANDARD

Status: 2025-01-07 - Session Sine Die [SB1556 Detail]

Download: Illinois-2023-SB1556-Senate_Amendment_001.html

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Sen. David Koehler

Filed: 1/19/2024

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AMENDMENT TO SENATE BILL 1556
AMENDMENT NO. ______. Amend Senate Bill 1556 by replacing
everything after the enacting clause with the following:
"Section 1. Short title. This Act may be cited as the Clean
Transportation Standard Act.
Section 5. Findings. The General Assembly finds that:
(1) The transportation sector in this State is a
leading source of criteria air pollutants and greenhouse
gas emissions, which collectively endanger public health
and welfare by causing and contributing to increased air
pollution and climate change.
(2) Shifting from petroleum-based transportation fuels
to alternative fuels has the potential to significantly
reduce transportation emissions of air pollutants and
greenhouse gases and is recommended by the

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Intergovernmental Panel on Climate Change as an important
pathway for holding global warming at 1.5 degrees Celsius.
A clean transportation standard would promote innovation
in and production and use of nonpetroleum fuels that
reduce vehicle-related and fuel-related air pollution that
endangers public health and welfare and disproportionately
impacts disadvantaged communities.
(3) Credits generated through the use of clean fuel
under this Act will promote innovation and investment in
clean fuels.
Section 10. Definitions. As used in this Act:
"Agency" means the Environmental Protection Agency.
"Aggregator" or "credit aggregator" means a person who
registers to participate in the clean transportation standard
program on behalf of one or more credit generators to
facilitate credit generation and to trade credits.
"Aviation fuel" means a fuel suitably blended to be used
in aviation engines.
"Backstop aggregator" means a qualified nonprofit entity
approved by the Agency to aggregate credits for electricity
used as a transportation fuel when those credits would not
otherwise be generated.
"Board" means the Pollution Control Board.
"Carbon intensity" means the amount of lifecycle
greenhouse gas emissions per unit expressed in grams of carbon

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dioxide equivalent per megajoule.
"Clean fuel" means a transportation fuel that is
domestically produced and has a carbon intensity below the
clean transportation standard carbon intensity standard in a
given year.
"Clean transportation standard" means the standard adopted
by the Board under Section 15 for the reduction, on average, of
lifecycle carbon intensity of fuels used for on-road
transportation. If there is an industry-accepted standard for
calculating the carbon intensity of different modes of
transportation, such as off-road, light rail, and other forms
of mass transportation, the Board shall adopt that standard.
"Consumer Price Index for All Urban Consumers" means a
measure that examines the changes in the price of a basket of
goods and services purchased by urban consumers, and is
published by the U.S. Bureau of Labor Statistics.
"Credit" means a unit of measure generated when clean fuel
is produced, imported, or dispensed for use in this State,
such that one credit is equal to one metric ton of carbon
dioxide equivalent.
"Credit generator" means a fuel reporting entity that
generates a credit in the clean transportation standard.
"Deficit" means a measure of the degree to which the
carbon intensity of a fuel provider's transportation fuel
volume produced or imported for use in this State exceeds the
carbon intensity of the applicable annual clean transportation

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standard, expressed in metric tons of carbon dioxide
equivalent.
"Deficit generator" means a fuel reporting entity that
generates a deficit in the clean transportation standard.
"Fuel" means a transportation fuel that is used directly
in a vehicle for transportation purposes without requiring
additional chemical or physical processing.
"Fuel pathway" means a detailed description of all stages
of a transportation fuel's production and use, including
feedstock growth, extraction, processing, transportation,
distribution, and combustion or use by an end user.
"Lifecycle carbon intensity" means the quantity of
greenhouse gas emissions per unit of energy, expressed in
carbon dioxide equivalent per megajoule, emitted by the fuel,
including both direct and indirect sources, as calculated
annually by the Agency under subsection (b) of Section 20
using the methods described under Section 30.
"Military tactical vehicle" means a motor vehicle owned by
the U.S. Department of Defense or the U.S. military services
and used in combat, combat support, combat service support,
tactical or relief operations, or training for such
operations.
"Petroleum-only portion" means the component of gasoline
or diesel fuel before blending with ethanol, biodiesel,
biofuel, or other low-carbon-intensity fuel.
"Producer" means:

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(1) with respect to any liquid fuel, hydrogen fuel,
and renewable propane, the person who makes the fuel;
(2) with respect to any biomethane, the person who
refines, treats, or otherwise processes biogas into
biomethane;
(3) with respect to electricity, the person who is the
direct provider of electricity; or
(4) with respect to other types of fuel, a person
deemed appropriate by the Agency.
"Provider" includes, but is not limited to, a refiner,
producer, or importer of a transportation fuel and a direct
provider of electricity being used as a fuel source for
transportation, including, but not limited to, electric
vehicle charging service providers, electric utilities, and
electric vehicle fleet operators. For the purposes of the
clean transportation standard, "provider" does not include the
owner or operator of a residential charging station or the
owner or operator of a commercial property with on-site
charging stations independent of the primary function of the
business.
"Regulated entity" means any entity, whether a credit
generator or deficit generator, that has registered, on a
mandatory or permissive basis, to participate in the clean
transportation standard.
"Sustainable aviation fuel" means an aviation fuel with a
carbon intensity sufficient to generate credits under the

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clean transportation standard upon its production or supply.
"Tactical support equipment" means equipment using a
portable engine, including turbines, that meets military
specifications, is owned by the U.S. Department of Defense or
the U.S. military services or its allies, and is used in
combat, combat support, combat service support, tactical or
relief operations, or training for such operations. "Tactical
support equipment" includes, but is not limited to, engines
associated with portable generators, aircraft start carts,
heaters and lighting carts.
Section 15. Rulemaking and baseline calculations for clean
transportation standard.
(a) To the extent allowed by federal law, within 24 months
after the effective date of this Act, the Agency shall propose
and the Board shall adopt rules establishing a clean
transportation standard in order to reduce, within 10 years of
the adoption of the Agency's rules by the Board, the lifecycle
carbon intensity of fuels for the ground transportation sector
by 20% below the 2019 baseline level as calculated under this
Section. The rules proposed and adopted shall be subject to
public notice and comment under the Illinois Administrative
Procedure Act. The Board may recommend to the General Assembly
reductions to the clean transportation standard below those
adopted in accordance with this Act, using factors, including,
but not limited to, advances in clean fuel technology. The

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rules adopted by the Board under this Section shall include
fees for the registration of providers to offset the costs
incurred by the Board and the Agency that are associated with
implementing the clean transportation standard. These fees
shall be used only in connection with the administration of
the program and may be levied differently based on whether a
registered entity is a credit generator or deficit generator.
Except where otherwise provided in this Act, the Agency shall
consider rules that are harmonized, to the extent practicable,
with the regulatory standards, exemptions, reporting
obligations, and other clean transportation standard
compliance requirements and methods for credit generation of
other states that have adopted low-carbon fuel standards or
similar greenhouse gas emissions requirements applicable
specifically to transportation fuels.
(b) The Agency shall calculate the baseline carbon
intensities of the petroleum-only portion of all
transportation fuels produced or imported in 2019 for use in
this State by:
(1) reviewing and considering the best available
applicable scientific data and calculations; and
(2) using a lifecycle emissions, performance-based
approach that is technology-and-feedstock neutral.
Section 20. Contents of clean transportation standard. The
clean transportation standard adopted by the Board, by rule,

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shall:
(1) apply to all providers in the State;
(2) be measured based on a lifecycle carbon intensity
that shall be calculated annually by the Agency in
accordance with Section 30;
(3) recognize voluntary farm emissions reductions that
contribute to the reduced carbon intensity of fuels by
allowing credit generators to use individualized
farm-level carbon intensity scoring for approved
sustainable agricultural practices. The Agency shall, for
the purposes of determining individualized farm-level
carbon intensity scoring, use the GREET model's Feedstock
Carbon Intensity Calculator (FD-CIC);
(4) take into consideration the low-carbon clean
transportation standards that are pending or have been
adopted in other states;
(5) include a credit price cap to be determined by the
Agency and confirmed by the Board to contain costs if the
fuel supply forecasts determine that not enough credits
will be available. The price cap shall be adjusted
annually by the rate of inflation as measured by the most
recently available 12 months of the Consumer Price index
for All Urban Consumers. The price cap shall be published
on the first Monday of a month to be determined by the
Agency, and the cap shall go into effect the first Monday
of the second successive month following publication;

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(6) contain a structure for compliance that conforms
with the marketplace system described in Section 25,
including, but not limited to, details, such as:
(A) methods for assigning compliance obligations
and methods for tracking tradable credits;
(B) mechanisms that allow credits to be traded,
transferred, sold, and banked for future compliance
periods;
(C) mechanisms that provide for the creation of a
list of accepted credit transactions and a list of
prohibited forms of credit transactions, which may
include trades involving, related to, or associated
with any of the following:
(i) any manipulative or deceptive device;
(ii) a corner or an attempt to corner the
market for credits;
(iii) fraud or an attempt to defraud any other
entity;
(iv) false, misleading, or inaccurate reports
concerning information or conditions that affect
or tend to affect the price of a credit; and
(v) applications, reports, statements, or
documents required to be filed under this Act that
are false or misleading with respect to a material
fact or that omit a material fact necessary to
make the contents therein not misleading;

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(C) procedures for verifying the validity of
credits and deficits generated under the clean
transportation standard;
(D) mechanisms by which persons associated with
the supply chains of transportation fuels that are
used for purposes that are exempt from the clean
transportation standard described in Section 40 and
persons that are associated with the supply chains of
transportation fuels and will generate credits may
register with the Agency to participate in the clean
transportation standard program; and
(E) an administrative procedure by which a
regulated entity may contest the Board's or Agency's
calculation prior to the levying of a penalty for
failure to remedy a given deficit;
(F) procedures that will allow the Agency to
cancel or reverse (i) a credit transfer that is
determined to be a prohibited transaction under items
(i) through (v) of subparagraph (B) or (ii) any other
prohibited transaction as determined by the Board in
rulemaking;
(7) contain a program review procedure whereby the
Board or Agency shall solicit feedback from and annually
consult with representatives from stakeholder groups,
including representatives from the fuel production
industry, the transportation industry, the agricultural

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industry, environmental advocacy organizations, labor
organizations, representatives from impacted
environmental justice communities, as defined in Section
801-10 of the Illinois Finance Authority Act, and
representatives from related State agencies; the substance
of the annual consultations shall include, but may not
limited to, a review of the economic impact of the clean
transportation standard, whether the clean transportation
standard is adhering to the established carbon intensity
reduction goals, the health impact of the emissions
reductions on disadvantaged communities, and whether
access to transportation has been affected as a result of
the implementation of the clean transportation standard;
(8) include annual carbon intensity reduction
standards that are to be met by regulated entities and
that result in the attainment of carbon intensity
reduction targets set by the Board;
(9) maximize benefits to the environment and natural
resources and develop safeguards and incentives to protect
natural lands and enhance environmental integrity,
including biodiversity;
(10) aim to support, through credit generation or
other financial means, voluntary farmer-led efforts to
adopt agricultural practices that benefit soil health and
water quality;
(11) support equitable transportation electrification

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that benefits all communities and is powered primarily
with low-carbon and carbon-free electricity;
(12) seek to improve air quality and public health,
targeting communities that bear a disproportionate health
burden from transportation pollution;
(13) establish, in consultation with the Department of
Agriculture and the Department of Transportation, a
procedure for determining fuel pathways that:
(A) is consistent for all fuel types;
(B) is based on science and engineering;
(C) reflects differences in vehicle fuel
efficiency and drivetrains; and
(D) accounts for any on-site additional energy use
by a carbon capture technology employed in the fuel
production process, including, but not limited to,
generation, distillation, and compression;
(14) recognize that farmers who can demonstrate use of
production methods that lower the carbon intensity of
their commodities shall be compensated a fair market value
that is, at minimum, commensurate with costs associated
with those low-carbon production methods or shall be
provided a fair share of the increased market value of the
end-use product that their commodity is used to produce.
Compensation may come in a variety of forms, including,
but not limited to, practice-based incentive payments,
outcome-based incentive payments, price premiums, or other

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forms of payment. The Agency shall also protect farm data
by ensuring farmer ownership of data for a specific amount
of time or negotiated on an annual basis;
(15) contain mechanisms to excuse excess emissions
from enforcement action if such excess emissions are
unavoidable. The rules shall specify the criteria and
procedures for the Agency to determine whether a period of
excess emissions is excusable;
(16) include mechanisms by which producers who would
be eligible to generate credits from electricity used as
transportation fuel may assign their right to generate
credits to an aggregator, and include mechanisms by which
a backstop aggregator may register with the program to
generate credits if an electric utility opts out of the
program; and
(17) provide indirect accounting mechanisms such as
book-and-claim or mass-balancing for clean fuels entering
fungible supply systems that can access this State.
Section 25. Credit market; verification and data privacy;
compliance and penalties.
(a) The clean transportation standard adopted by the Board
shall take the form of a credit marketplace with the following
structure. The marketplace shall consist of a system of
credits and deficits monitored by the Agency. The Agency shall
compile a list of fuel pathways that producers and providers

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may use to generate credits. Producers and providers seeking
to be credit generators must register with the Agency and
attest to the transportation fuels they produce, import, or
dispense in the State in order to qualify to generate credits.
Each producer or importer of any amount of a transportation
fuel that is ineligible to generate credits consistent with
the requirements of this Act must register and comply with the
program. Fuels that are registered with the program must have
a dedicated, verifiable fuel pathway with a carbon intensity
score measurable by software described in Section 30 and
assigned a unique identifier by the Agency. Providers reaching
or exceeding the required reduction of lifecycle carbon
intensity under the clean transportation standard shall
receive credits from the Agency upon verification described in
subsection (b) at the end of a reoccurring reporting period as
determined by the Agency. Fuel providers that are deficit
generators during a year shall eliminate the deficit by either
producing or importing transportation fuels whose carbon
intensity is at or below the level of that year's annual clean
transportation standard or by purchasing credits to offset the
deficit. The system of credits created under this subsection
shall provide credits based on a lifecycle emissions
performance-based approach that is technology neutral,
feedstock neutral, and has the purpose of achieving fuel
decarbonization.
(b) The Agency must, in collaboration with the Department

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of Agriculture and the Department of Transportation, establish
acceptable methods to verify that the transportation fuel used
by regulated entities has been produced or imported following
the pathway bearing the unique identifier as attested by the
regulated entity. The Agency is authorized to contract with
third party verifiers to accomplish this requirement. Upon
registering with the program, regulated entities must agree to
provide data related to the registered fuel pathway used to
generate credits or deficits with the Agency as required to
administer the program. Upon registering with the program,
regulated entities must agree to be subject to periodic audits
as determined by the Agency.
All information gathered by or provided to the Agency or
contractors of the Agency, either by regulated entities,
agents of regulated entities, or growers of feedstock used in
a registered fuel pathway by regulated entities, through
either voluntary disclosure or audit, must not be shared by
the Agency with any party except in relation to the
administration of the clean transportation standard absent
written consent by the regulated entity and the entity from
which the data was gathered. This data must not be used for any
purpose outside of the administration and enforcement of the
clean transportation standard except by written consent from
the original data holder. Ownership of all data shared or
collected by the Agency for the administration and enforcement
of the clean transportation standard is retained with the

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entity from which the data originates. Data protected under
this subparagraph does not include a regulated entity's credit
or deficit balance, which may be publicly disclosed by the
Agency.
(c) Deficit generators who fail to offset their deficits
at the conclusion of any compliance period administered by the
Agency shall be subject to a civil penalty established by the
Agency subject to the following limitations:
(1) the value of the penalty shall correspond to the
amount of deficits attributed to a given regulated entity
at the time the transaction has completed; and
(2) for every one deficit the regulated entity fails
to offset, the penalty for failure to offset that deficit
shall not exceed 10 times the value of the credit needed to
offset the deficit.
(d) Regulated entities that submit false information in
support of an application to register for the clean
transportation standard, that share false information during
an audit or in support of an attestation, or that otherwise
share false or inaccurate information to the Agency or a
contractor working under the direction of the Agency shall be
subject to penalties to be determined by the Agency by rule.
Penalties under this paragraph may include monetary penalties,
forfeiture of credits, and reversals of prohibited
transactions as described in subparagraph (B) of paragraph (6)
of Section 20. The Agency may waive penalties under this

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subparagraph. If the violator under this subsection is a
credit generator, following 3 violations, the Agency may
remove the violating credit generator from the clean
transportation standard. In determining whether penalties
should be applied and, if a penalty is to be applied, the
amount of penalties to be levied for violations under this
subparagraph, the Agency shall consider:
(1) evidence of willfulness by the regulated entity to
submit false information;
(2) the scope of the false information;
(3) evidence of past submissions of false information;
and
(4) efforts undertaken by the regulated entity to
remedy the false submission.
(e) The penalties provided for in this Section may be
recovered in a civil action brought in the name of the people
of the State of Illinois by the State's Attorney of the county
in which the violation occurred or by the Attorney General.
Any penalties collected under this Section in an action in
which the Attorney General has prevailed shall be used to
offset registration fees in support of the administration of
the clean transportation standard program. Any amount of
penalties collected in addition to the amount needed to
administer the clean transportation standard program shall be
deposited in the Environmental Protection Trust Fund, to be
used in accordance with the provisions of the Environmental

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Protection Trust Fund Act.
(f) The Attorney General or the State's Attorney of a
county in which a violation occurs may institute a civil
action for an injunction, prohibitory or mandatory, to
restrain violations of this Act or to require such actions as
may be necessary to address violations of this Act.
(g) The penalties and injunctions provided in this Act are
in addition to any penalties, injunctions, or other relief
provided under any other law. Nothing in this Act bars an
action by the State for any other penalty, injunction, or
other relief provided by any other law.
Section 30. Lifecycle carbon intensity calculations;
software. The lifecycle carbon intensity calculation conducted
by the Agency under paragraph (2) of Section 20 shall use the
Argonne National Laboratory's GREET model and shall include
all stages of fuel and feedstock production and distribution,
from feedstock generation or extraction through the
distribution, delivery, and use of the finished fuel by the
ultimate consumer. The Agency shall, as needed and
periodically as established by rule, use as up-to-date a model
as possible, taking into account staffing and hiring needs. In
calculating the lifecycle carbon intensity, the mass values
for all greenhouse gases that are not carbon dioxide must be
adjusted to account for each of their relative global warming
potentials. This adjustment shall be performed using the

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global warming potential deemed most accurate by the Agency
for each greenhouse gas for the period during which reductions
in greenhouse gas emissions are to be attained under the clean
transportation standard. When measuring the carbon intensity
of biofuels, the Agency shall use the GREET model's Feedstock
Carbon Intensity Calculator (FD-CIC) for the purposes of
accounting for variations in farming practices across
different fuel pathways.
Section 35. Investments by backstop aggregators and
utilities. In implementing this Act, the Agency and Board are
empowered to, and shall consider establishing, rules under the
standard to support transportation electrification investments
in disadvantaged communities. Those rules may direct
participating utilities and backstop aggregators under the
standard to allocate revenue earned from trading credits, or a
fraction thereof, toward those investments. The Agency and
Board shall determine projects and goals under this Act in
consultation with relevant stakeholders, including, but not
limited to, credit generators, affected communities, and
environmental justice advocacy organizations.
Section 40. Exemptions. The following fuels are exempt
from the clean transportation standard established in Section
15:
(1) aviation fuels;

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(2) transportation fuel used in locomotives;
(3) transportation fuel used in ocean-going vessels;
and
(4) fuel used in military tactical vehicles and
tactical support equipment owned by the U.S. Department of
Defense or the U.S. military services.
However, producers, providers, and suppliers of these fuels,
if deemed to be clean fuels, shall be eligible under the rules
adopted pursuant to this Act to receive credits on an opt-in
basis that may be applied to future obligations or sold to
deficit generators.
Section 45. Agency reporting obligation. Within 12 months
after the Board adopts the rules proposed by the Agency under
Section 15, the Agency shall submit a report to the General
Assembly detailing the implementation of the clean
transportation standard, the reductions in greenhouse gas
emissions that have been achieved through the clean
transportation standard, and targets for future reductions in
greenhouse gas emissions. These reports shall include feedback
solicited from stakeholders under paragraph (7) of Section 20.
Section 50. Fuel supply forecasting. In consultation with
the Department of Transportation and the Department of
Agriculture, the Agency must develop a periodic fuel supply
forecast to project the availability of fuels to the State

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necessary for compliance with clean transportation standard
requirements. The fuel supply forecast for each upcoming
compliance period must include, but is not limited to, the
following:
(1) an estimate of the potential volumes of gasoline,
gasoline substitutes, and gasoline alternatives, and
diesel, diesel substitutes, and diesel alternatives
available to the State. In developing this estimate, the
Agency must consider, but is not limited to, considering:
(A) the existing and future vehicle fleet in this
State; and
(B) any constraints that might be preventing
access to available and cost-effective low-carbon
fuels by the State, such as geographic and logistical
factors, and alleviating factors to the constraints;
(2) an estimate of the total banked credits and
carried over deficits held by regulated parties, credit
generators, and credit aggregators at the beginning of the
compliance period, and an estimate of the total credits
attributable to fuels described in paragraph (1);
(3) an estimate of the number of credits needed to
meet the applicable clean transportation standard
requirements during the forecasted compliance period; and
(4) a comparison in the estimates of paragraphs (1)
and (2) with the estimate in paragraph (3), for the
purpose of indicating the availability of fuels and banked

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credits needed for compliance with the requirements of
this chapter.
The Agency may appoint a forecast review team of relevant
experts to participate in the fuel supply forecast or
examination of data required by this Section. The Agency must
finalize a fuel supply forecast for an upcoming compliance
period by no later than 90 days prior to the start of the
compliance period.
Section 55. Forecast deferral.
(a) No later than 30 calendar days before the commencement
of a compliance period, the Agency shall issue an order
declaring a forecast deferral if the fuel supply forecast
under Section 50 projects that the amount of credits that will
be available during the forecast compliance period will be
less than 100% of the credits projected to be necessary for
regulated parties to comply with the scheduled applicable
clean transportation standard adopted by the Agency for the
forecast compliance period.
(b) An order declaring a forecast deferral under this
Section must set forth:
(1) the duration of the forecast deferral;
(2) the types of fuel to which the forecast deferral
applies; and
(3) which of the following methods the Agency has
selected for deferring compliance with the scheduled

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applicable clean transportation standard during the
forecast deferral:
(A) temporarily adjusting the scheduled applicable
clean transportation program standard to a standard
identified in the order that better reflects the
forecast availability of credits during the forecast
compliance period and requiring regulated entities to
comply with the temporary standard;
(B) requiring regulated entities to comply only
with the clean transportation standard applicable
during the compliance period prior to the forecast
compliance period; or
(C) suspending deficit accrual for part or all of
the forecast deferral period.
(c) In implementing a forecast deferral, the Agency may
take an action for deferring compliance with the clean
transportation standard other than, or in addition to,
selecting a method under paragraph (3) of subsection (b) only
if the Agency determines that none of the methods under
paragraph (3) of subsection (b) will provide a sufficient
mechanism for containing the costs of compliance with the
clean transportation standard during the forecast deferral.
(d) If the Agency makes the determination specified in
subsection (c), the Agency shall:
(1) include in the order declaring a forecast deferral
the determination and the action to be taken; and

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(2) provide written notification and justification of
the determination and the action to:
(A) the Governor;
(B) the President of the Senate;
(C) the Speaker of the House of Representatives;
(D) the Majority and Minority Leaders of the
Senate; and
(E) the Majority and Minority Leaders of the House
of Representatives.
(e) The duration of a forecast deferral may not be less
than one calendar quarter or longer than one compliance
period. Only the Agency may terminate, by order, a forecast
deferral before the expiration date of the forecast deferral.
Termination of a forecast deferral is effective on the first
day of the next calendar quarter after the date that the order
declaring the termination is adopted.
Section 60. Conflicts with other State programs. Nothing
in this Act precludes the Agency or Board from adopting or
maintaining other programs as permitted or required by
existing or future legislation to reduce greenhouse gas
emissions from the transportation sector.