Bill Text: NY A08597 | 2021-2022 | General Assembly | Introduced
Bill Title: Enacts the carbon dioxide removal leadership act which directs New York state to procure carbon dioxide removal services in order to achieve statewide net zero greenhouse gas emissions pursuant to legally enforceable limits; defines terms.
Spectrum: Partisan Bill (Democrat 12-0)
Status: (Introduced - Dead) 2022-01-10 - referred to environmental conservation [A08597 Detail]
Download: New_York-2021-A08597-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8597 IN ASSEMBLY January 10, 2022 ___________ Introduced by M. of A. FAHY -- read once and referred to the Committee on Environmental Conservation AN ACT to amend the environmental conservation law, in relation to enacting the carbon dioxide removal leadership act; and to repeal certain provisions of the tax law relating to taxes on carbon dioxide emissions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "Carbon 2 Dioxide Removal Leadership Act". This act directs New York state to 3 procure carbon dioxide removal services in order to achieve statewide 4 net zero greenhouse gas emissions pursuant to legally enforceable limits 5 set forth in paragraph b of subdivision four of section 75-0109 of the 6 environmental conservation law. The use of such mechanism creates a 7 target for carbon dioxide removal by the year two thousand fifty equal 8 to fifteen percent of statewide greenhouse gas emissions estimated as a 9 percentage of emissions in the year nineteen hundred ninety, and shall 10 be implemented in lieu of any alternative compliance mechanism that 11 would permit greenhouse gas emissions offset projects. The procurement 12 of carbon dioxide removal services shall not result in disadvantaged 13 communities having to bear a disproportionate burden of environmental 14 impacts, and shall incorporate preferential consideration for projects 15 that result in quantifiable economic and social benefits for such commu- 16 nities. 17 § 2. The environmental conservation law is amended by adding a new 18 article 76 to read as follows: 19 ARTICLE 76 20 CARBON DIOXIDE REMOVAL 21 Section 76-0101. Definitions. 22 76-0103. New York state carbon dioxide removal reverse auction. 23 76-0105. Carbon dioxide removal measurement, reporting and 24 verification. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD14092-01-1A. 8597 2 1 76-0107. Bid preferences. 2 76-0109. On-going bidder responsibilities. 3 76-0111. Reverse auction funding. 4 76-0113. Carbon dioxide removal and equity survey. 5 76-0115. Authority and compliance. 6 76-0117. Severability. 7 § 76-0101. Definitions. 8 For the purposes of this article, the following terms shall have the 9 following meanings: 10 1. "Annual price per ton" means the maximum price per metric ton of 11 CDR which the state will pay per bid in a given year. 12 2. "Annual removal target" means the minimum total volume of carbon 13 dioxide removal, expressed in metric tons of carbon dioxide equivalent, 14 for which the department will solicit bids in a given year, such amount 15 to be increased by the portion of the annual removal target not met in 16 the prior year. 17 3. "Bid" means a bid fulfilling the requirements of section 76-0105 of 18 this article. 19 4. "Bid price" means the total price the bidder is willing to be paid 20 in a given bid for providing carbon dioxide removal. 21 5. "Bidder" means a person or entities qualified to submit a bid 22 pursuant to the requirements set forth in section 76-0109 of this arti- 23 cle. 24 6. "Carbon dioxide equivalent" or "CO2e" means the amount of carbon 25 dioxide by mass that would produce the same global warming impact as a 26 given mass of another greenhouse gas over an integrated twenty-five-year 27 time frame after emission. 28 7. "Carbon dioxide removal" or "CDR" means removing carbon dioxide 29 from the atmosphere, on a net basis to CDR process emissions, and 30 durably storing it in geological, terrestrial, or ocean reservoirs, or 31 in long-lived products. 32 8. "CDR process" means the physical process by which carbon dioxide is 33 removed from the atmosphere and durably sequestered or stored. 34 9. "CDR project" means the specific project which will be delivering 35 the CDR outlined in a given bid. 36 10. "Carbon removal fee" means a fee levied by the state against a 37 hard-to-abate emissions source for the purpose of funding this act. 38 11. "Department" means the department of environmental conservation. 39 12. "Disadvantaged communities" means communities that bear burdens of 40 negative public health effects, environmental pollution, impacts of 41 climate change, and possess certain socioeconomic criteria, or comprise 42 high concentrations of low- and moderate-income households. 43 13. "Durability" or "durable" means the secure sequestration of CO2e 44 in the geosphere, in the ocean, in long-lived products, or otherwise, 45 measured as a unit of time. 46 14. "Greenhouse gas" means carbon dioxide, methane, nitrous oxide, 47 hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and any other 48 substance emitted into the air that may be reasonably anticipated to 49 cause or contribute to anthropogenic climate change. 50 15. "Life-cycle analysis" or "LCA" means a complete, end-to-end analy- 51 sis of the greenhouse gas emissions resulting from a CDR process, 52 including, but not limited to, manufacturing, transportation, utiliza- 53 tion, sequestration and other processes occurring prior to, during, or 54 after, the CDR process which are required to achieve CDR. 55 16. "Measurement, reporting and verification" or "MRV" means the veri- 56 fied measurement and reporting of CDR using an objective, peer-reviewedA. 8597 3 1 and scientifically supported accounting methodology and taking into 2 account regionally appropriate sampling and data collection methods to 3 quantify emissions and removals associated with the CDR process and 4 durability of removal instead of solely model-based or statistical meth- 5 ods. 6 17. "Megaton" or "Mt" means one million metric tons. 7 18. "Minimum bid" means the minimum volume of CDR for which a bidder 8 may submit a bid. 9 19. "Reverse auction" means a bidding process in which qualified 10 bidders submit bids for CDR to remove and durably store a specified 11 quantity of CO2e in exchange for payment by the state. 12 20. "Social cost" means a measure, in dollars, of the long-term damage 13 done by a ton of CO2e emissions in a given year. 14 21. "Ton" means metric ton, or tonne (one thousand kilograms). 15 22. "Total annual bid" means the total volume of CDR for which bids 16 were submitted in a given year. 17 § 76-0103. New York state carbon dioxide removal reverse auction. 18 1. Pursuant to paragraph a of subdivision four of section 75-0109 of 19 this chapter, beginning in the year two thousand twenty-five, the 20 department shall annually conduct a reverse auction for the purchase of 21 CDR. The department shall initiate the reverse auction on April first 22 and close the reverse auction on June thirtieth of each year the reverse 23 auction is held. 24 2. All verified CDR purchased by the department through the reverse 25 auction shall be considered a greenhouse gas emission offset as defined 26 in article seventy-five of this chapter. 27 3. The department shall conduct the reverse auction subject to the 28 following requirements: 29 a. The department shall accept qualifying bids up to the maximum aver- 30 age price per ton of CDR to meet the annual removal target; 31 b. The minimum bid for eighty percent of the annual removal target 32 shall be no less than 0.01Mt, or ten thousand tons of CDR; 33 c. The minimum bid for twenty percent of the annual removal target 34 shall be no less than 0.001Mt, or one thousand tons of CDR; 35 d. Bids shall include a term for delivery that may not exceed ten 36 years; and 37 e. The department shall not accept bids causing the total annual bid 38 to exceed the maximum average price per ton pursuant to subdivision 39 three of this section. 40 4. The maximum average price per ton of CDR shall be three hundred 41 fifty dollars in the year two thousand twenty-five, and shall decrease 42 by five percent each year subsequently as adjusted for inflation. 43 5. At least sixty days prior to opening each reverse auction, the 44 department shall establish the annual removal target. Such annual 45 removal target shall be set to achieve the greenhouse gas emission 46 offset objectives pursuant to paragraph b of subdivision four of section 47 75-0109 of this chapter and shall be no less than 0.1Mt in two thousand 48 twenty-five. The department shall increase the annual removal target by 49 at least the following amounts annually: 50 a. One hundred percent per year from the year two thousand twenty-six 51 through two thousand twenty-nine; 52 b. Twenty-five percent per year from the year two thousand thirty 53 through two thousand thirty-nine; 54 c. Twenty percent per year from the year two thousand forty through 55 two thousand forty-four;A. 8597 4 1 d. Ten percent per year from the year two thousand forty-five through 2 two thousand forty-nine; and 3 e. Three percent in the year two thousand fifty. 4 6. The department shall accept qualifying bids sufficient to meet the 5 annual removal target, based on the criteria outlined in section 76-0107 6 of this article. If the total annual bid is less than the annual removal 7 target, the department shall increase the annual removal target in the 8 subsequent year by the difference between the annual removal target and 9 the total annual bid. 10 7. The department shall publicly announce the winning bids; publicly 11 release the winning bidders' proposals and scorecards and contract with 12 the winning bidders no later than September thirtieth of each year. 13 8. The department shall recommend any necessary revision to subdivi- 14 sions three and four of this section based on current and anticipated 15 CDR market conditions in advance of each funding reauthorization stipu- 16 lated by section 76-0111 of this article. 17 § 76-0105. Carbon dioxide removal measurement, reporting and verifica- 18 tion. 19 1. Each bid submitted to the department must contain the following 20 information: 21 a. Legal name, address, contact information and history of prior 22 participation in the CDR reverse auction, or other public or private- 23 market procurement programs, for each entity or person submitting a bid; 24 b. The total volume of CDR to be achieved pursuant to the bid; 25 c. The length of time the bidder will require to deliver the proposed 26 CDR project; 27 d. A description of the CDR process and the CDR project; 28 e. LCA of each CDR process required to achieve the proposed CDR 29 project; 30 f. Land area and water volume employed for CDR project; 31 g. Description, quantified where possible, of the following externali- 32 ties and/or co-benefits resulting from the CDR project: 33 (i) ecosystem and ecological harms and co-benefits, including impacts 34 on the surrounding soil health, biodiversity, and water and air quality; 35 (ii) job creation and industrial development benefits, particularly in 36 disadvantaged communities; and 37 (iii) equity and environmental justice impacts; 38 h. Description of the MRV the bidder will employ for the CDR project, 39 from an independent third-party deemed acceptable by the department that 40 verifies all requirements of this section; 41 i. Legally binding attestation by each bidder that the information 42 provided is accurate and that all requirements of this section are met; 43 and 44 j. Any additional information the department reasonably requests to 45 assess the bid. 46 2. The LCA must demonstrate, and the MRV must verify, that the carbon 47 dioxide will be removed from the atmosphere and securely and durably 48 stored for at least one hundred years from the date of CDR. However, 49 such CDR may not be used in the extraction or recovery of oil or gas. 50 3. The CDR for which the bid is submitted must commence and be 51 completed as soon as reasonably commercially possible, but completed no 52 later than ten years from the effective date of the contract between the 53 department and bidder. The department may use its discretion to deter- 54 mine payment schedule for the CDR, and how much, if any, payment is to 55 be remitted in advance, and how much on delivery.A. 8597 5 1 4. The CDR project for which the bid is submitted must be unique to 2 this transaction and additional to any prior or otherwise existing or 3 planned CDR, and may not be used as part of any other private or public 4 transaction for carbon removal. 5 5. Methods of CDR may include, but are not limited to: 6 a. Terrestrial mineralization or enhanced rock weathering; 7 b. Terrestrial biomass carbon removal and storage such as biochar, 8 bio-oil or bio-energy with carbon capture and sequestration; 9 c. Hydrological or marine-based CDR including electro-chemical carbon 10 capture, alkalinity enhancement, marine permaculture, deep-ocean seques- 11 tration of biomass, and coastal enhanced weathering; 12 d. Construction materials and products, the production of which 13 directly contribute to the sequestration of carbon dioxide or other 14 greenhouse gases, including mass timber; or 15 e. Direct air carbon capture with durable geologic sequestration, or 16 utilization in the built environment including concrete, long-lived 17 plastics, carbon fiber, or other durable goods. 18 § 76-0107. Bid preferences. 19 The department shall create a scorecard to evaluate the bids received 20 based on the following factors: 21 1. Price per ton; 22 2. CDR project occurs within state or waters within fifty nautical 23 miles of the state; 24 3. Scale potential of the CDR process in the state, and generally; 25 4. Delivery term for the proposed CDR project; 26 5. CDR project is performed by a bidder that is incorporated, based 27 in, and has state tax liability in the state; 28 6. Durability of CDR in excess of one hundred years; 29 7. Conservation efficiency in use of water, land, and energy 30 resources; 31 8. CDR project offers significant ecological or ecosystem benefits, 32 and does not create significant harms; 33 9. CDR project benefits one or more disadvantaged communities as 34 defined in section 75-0101 of this chapter; 35 10. CDR project generates employment within the state; and 36 11. CDR project is otherwise assessed to promote equity or environ- 37 mental justice within the state. 38 § 76-0109. On-going bidder responsibilities. 39 1. The department shall require each bidder provide periodic verifica- 40 tion from an independent third party deemed satisfactory by the depart- 41 ment that: 42 a. The volume of CDR removed from the atmosphere and stored meets or 43 exceeds the amount provided in the bid; and 44 b. There has been no leakage of CO2e or material reduction in the 45 number of years of CDR durability. 46 2. Upon a failure by the bidder to provide the verification required 47 by the department, the department may take action to penalize the 48 bidder, including, but not limited to: 49 a. Levying fines or penalties against the bidder to recoup funds paid 50 pursuant to the bid; or 51 b. Rejection of future bids by the bidder. 52 3. Subject only to the defenses set forth in subdivision four of this 53 section, the bidder, its successors, assigns, and transferees of respon- 54 sibilities, liabilities, rights or economic benefits of the CDR, shall 55 be liable for the social cost, as determined by the department pursuantA. 8597 6 1 to section 75-0113 of this chapter, of any CO2e leakage or reduction in 2 CDR durability. 3 4. There shall be no liability under this subdivision for a person 4 otherwise liable who can establish by a preponderance of the evidence 5 that the CO2e leakage or reduction in CDR durability were caused solely 6 by: 7 a. an act of God; 8 b. an act of war; or 9 c. an act or omission of a third party other than an employee or agent 10 of the bidder. 11 § 76-0111. Reverse auction funding. 12 Funding for the authorized five year reverse auction period, beginning 13 in the year two thousand twenty-five and ending in two thousand twenty- 14 nine, shall be derived entirely from state revenues that have been 15 accrued in preceding tax years from certain reinstated tax revenues on 16 aviation gasoline which is imported or caused to be imported into this 17 state by a petroleum business which is registered under article twelve-A 18 of the tax law as a distributor of motor fuel or produced, refined, 19 manufactured or compounded in this state by such a petroleum business. 20 § 76-0113. Carbon dioxide removal and equity survey. 21 1. Prior to the initiation of the reverse auction, the department 22 shall publish a survey of CDR opportunities within the state. Such 23 survey must include, but may not be limited to: 24 a. Data gathered by the department pursuant to CDR verification as 25 required by section 76-0109 of this article; 26 b. Review of CDR processes in New York state with 0.1Mt or greater 27 current scale potential and one-hundred-year or greater durability, with 28 a discussion for each of water and land-use requirements, LCA, potential 29 harms, and potential co-benefits, including jobs, industrial develop- 30 ment, ecosystem, and environmental equity and social justice; and 31 c. Reference to all prior reverse auction awards and projects 32 completed in previous years, including all data related to each CDR 33 process employed in each bid. 34 2. The completion of the survey shall incorporate participatory 35 research and design methodologies and activities that afford direct 36 engagement between the department and members of disadvantaged and envi- 37 ronmental justice communities throughout the state. Such activities 38 shall be carried out on a regional basis and will enable community 39 members to solicit information from the department concerning the objec- 40 tives, and intended benefits and outcomes of the procurement program; 41 and to offer direct comment and suggestions related to the program's 42 design, implementation and shared community benefits. 43 3. Provided the state has reauthorized funding of the reverse auction 44 pursuant to section 76-0111 of this article, the department shall update 45 the survey no less than every five years. 46 § 76-0115. Authority and compliance. 47 1. Nothing in this article shall limit the existing authority of a 48 state entity to adopt and implement greenhouse gas emissions reduction 49 measures, including carbon dioxide removal. 50 2. Nothing in this article shall relieve any person, entity, or public 51 agency of compliance with other applicable federal, state, or local laws 52 or regulations, including state air and water quality requirements, and 53 other requirements for protecting public health or the environment. 54 3. Review under this act may be conducted in a proceeding under arti- 55 cle seventy-eight of the civil practice law and rules at the instance of 56 any person aggrieved.A. 8597 7 1 § 76-0117. Severability. 2 If any word, phrase, clause, sentence, paragraph, section, or part of 3 this article shall be adjudged by any court of competent jurisdiction to 4 be invalid, such judgment shall not affect, impair, or invalidate the 5 remainder thereof, but shall be confined in its operation to the word, 6 phrase, clause, sentence, paragraph, section, or part thereof directly 7 involved in the controversy in which such judgment shall have been 8 rendered. 9 § 3. Subdivision (f) of section 301-e of the tax law is REPEALED. 10 § 4. Paragraph 9 of subdivision (a) of section 1115 of the tax law is 11 REPEALED. 12 § 5. This act shall take effect immediately.
