Clean Air Rule and energy-intensive, trade-exposed businesses
In March 2018, Thurston County Superior Court ruled that parts of the Clean Air Rule are invalid. The Superior Court's ruling prevents us from implementing the Clean Air Rule regulations that cap and gradually reduce major sources of carbon pollution. This means that compliance with the rule currently is suspended. On May 14, 2018 we published a media release and filed an appeal with the Washington State Supreme Court.
Under a separate Ecology rule, facilities covered by the Clean Air Rule still are required to report their emissions for the Greenhouse Gas Reporting program.
When we developed the Clean Air Rule, we took into consideration how businesses could comply and remain competitive. As a result, we designed a compliance pathway for certain businesses who face global competition.
Business growth and compliance
Industries that face significant global competition and use a large amount of energy to manufacture their products are collectively referred to as "energy-intensive, trade-exposed industries (EITEs)." Under the Clean Air Rule, businesses are identified as an EITE by their North American Industry Classification System (NAICS) code. Because of the unique needs and pressures facing these businesses, the Clean Air Rule uses a special formula to determine the amount of carbon reductions these organizations need to make. Companies had a one-time option to use the special formula or opt for the standard approach.
EITEs first compliance period begins in 2020
Businesses that are responsible for 100,000 metric tons of carbon pollution annually and that chose to use the compliance path developed for EITEs are required to begin reducing their emissions starting in 2020.
If you opted for the standard approach and are responsible for 100,000 metric tons of carbon pollution annually, you are required to start making reductions in 2017.
How EITEs emission limits will be determined
Emission limits for EITEs are based on their efficiency. We're in the process of collecting data to determine each business's limits. Our EITE video explains some of the steps to determining these emission limits.
In addition to an efficiency rating, each business will have a baseline that is determined by data submitted to Ecology. A business’s baseline is the average amount of carbon emissions created when making their product. Reduction requirements will be determined using this baseline and will adjust as the company's production changes. EITEs baseline is determined using the following formula:
One of the first steps in determining emission limits for an EITE is to evaluate each company’s efficiency. We do this by comparing EITEs to similar facilities nationally. A company's emission limits will be based on its efficiency rating:
- Less efficient: Up to 2.7 percent reduction per year.
- Average efficiency: 1.7 percent reduction per year.
- More efficient: At least 0.7 percent reduction per year.
EITEs opt-out deadline
EITEs who wanted to opt for the standard compliance pathway needed to inform us by Dec. 31, 2016. EITEs who did not contact us by Dec. 31, 2016 were automatically placed in the EITE compliance pathway. This was a one-time decision and no changes can be made after the deadline.