Emissions-intensive, trade-exposed industries (EITEs)
Report to the Legislature
We submitted a report to the Legislature in January 2026 to inform Legislators of EITE allowance options for 2035-2050. For more information, about the report and allocation please visit the EITE allocation: for 2035-2050 webpage.
In establishing the Climate Commitment Act (CCA), the Legislature recognized that certain industries face unique challenges in reducing their greenhouse gas emissions in the early years of the Cap-and-Invest Program. The Legislature decided to give no-cost allowances to these “emissions-intensive, trade-exposed" industries, or “EITEs,” until at least 2034.
The Legislature also expressed intent to reevaluate a long-term EITE policy. We submitted a report to the Legislature in January 2026 to inform Legislators of EITE allowance options for 2035-2050. For more information, visit the EITE allocation:2035-2050 webpage.
What are EITEs?
EITEs are important local industries that are mostly manufacturing facilities. They use high levels of energy and release large amounts of greenhouse gas emissions while also facing significant national or global competition for their products.
About 40 facilities in Washington qualify as EITEs as set out in the CCA (RCW 70A.65.110). These facilities produce a variety of products, including paper, food, beverages, steel, aluminum, glass, cement, building materials, airplanes, semiconductors, fertilizer, and transportation fuels. View map with EITE facility locations.
Why do EITEs receive no-cost allowances?
The CCA plays a key role in reducing Washington’s greenhouse gas emissions while also growing Washington’s clean-energy economy and prioritizing environmental justice.
EITEs were given special consideration by the Legislature because sudden or large changes to their operational costs could result in the business or industry limiting operation within the state, or their choosing to relocate outside of Washington.
If EITEs were to limit operation within the state or relocate, it could result in the loss of local jobs and opportunity to reduce emissions overall. People in Washington may instead purchase the same goods from out-of-state companies that aren’t subject to the CCA. Washington’s emissions would appear lower on paper, but in reality, the emissions would simply be occurring in another location. This is called “leakage.”
Washington isn’t the only government to make special considerations for EITEs. Most carbon trading programs around the world, such as those in California and Québec, provide no-cost allowances to EITEs or use other policies to avoid leakage.
Pulp and paper mills are among the categories of business eligible for "emissions-intensive, trade-exposed" provisions in the Climate Commitment Act.
How EITE allocation works
Under the Climate Commitment Act, most Washington state facilities or businesses that produce more than 25,000 metric tons of carbon emissions a year are required to obtain emissions allowances. Some of these allowances are sold in auctions, while others are awarded at no cost.
Under the law, EITE industries are given no-cost allowances each year to cover most of their compliance costs until at least the end of 2034.
EITEs are still required to reduce their emissions and help achieve net zero by 2050, but they have a longer lead time than other businesses in the Cap-and-Invest Program.
How are no-cost allowances calculated?
The specific number of allowances given to EITEs is based on their baseline emissions, or “allocation baseline.” Most EITEs have a “carbon intensity baseline” that determines their average emissions per unit of production during 2015-2019.
A small number of facilities have a ”mass-based baseline” that's based on their average emissions during 2015-2019.
Ecology updates the number of no-cost allowances given to EITEs each year to make sure that number aligns with actual production at EITE facilities. This means that if their output increases, EITEs get more allowances, but if their output decreases, then they get fewer allowances. This process is referred to as “true-up.”
The total number of allowances given to EITEs also is progressively reduced over time, as shown in the table below. This is known as the “reduction schedule.”
| Years | No-cost allowances given to EITEs |
|---|---|
| 2023-2026 | 100% of baseline emissions |
| 2027-2030 | 97% of baseline emissions |
| 2031-2034 | 94% of baseline emissions |
Though EITEs receive no-cost allowances, they still have an incentive to lower emissions in the short-term if they’re in a position to do so. This is because EITEs that emit fewer emissions than their allocation of no-cost allowances can save those allowances for future use, or they can sell them to other program participants.
If an EITE facility’s emissions exceed the amount of no-cost allowances it's given, it will have to purchase additional allowances to cover its full emissions.
Further details on the approach for allocating no-cost allowance to EITEs can be found in the program rule at WAC 173-446-220.
How many no-cost allowances are given each year?
In 2025, the total no-cost allowances to EITEs was about 9.1 million, which was about 17% of the "cap." We publish allowance allocation schedules annually.
Recent allowance allocation schedule
To view other allocation schedules, please see the no-cost allowance webpage.
EITE allocation for 2035-2050
The Legislature did not specify the approach to providing EITEs no-cost allowances for 2035-2050, but expresses intent to consider an updated EITE policy for 2035-2025 by Dec. 1, 2027 and tasked Ecology Ecology was tasked with developing a report that offers information and recommendations on how best to proceed. We submitted the report in January 2026.
Visit the EITE allocation 2035-2050 webpage for more information about the process and report.
Contact information
Cap-and-Invest Industrial Team