The California State Legislature passed two bills on July 17, 2017 to extend California's GHG cap-and-trade program and implement community air monitoring systems. Assembly Bill 398 will extend the cap-and-trade program through 2030 to ensure emissions are reduced at least 40% below the 1990 level by 2030. Assembly Bill 617 requires annual reporting of criteria air pollutants and toxic air contaminants for certain categories of stationary sources. The cap-and-trade program was established in 2006 as one of many new programs to reduce greenhouse gas emissions in California. Cap-and-trade regulations apply if your facility emits more than 25,000 MT CO2e per year. These bills will have a significant impact on facilities in California over the coming years. Key substantive points on Assembly Bill 398 and 617 are presented below:

Assembly Bill 398

  • Extends the GHG cap-and-trade (C&T) program through December 31, 2030. (The program was previously set to expire on December 31, 2020.)
  • Requires California Air Resources Board (CARB) to establish a price ceiling for GHG allowances, taking into account the "full social cost" of GHG emissions, historical allowances costs, and the potential for leakage.
  • Limits the use of offsets (non-C&T emission reductions) to not more than 4% of a source's compliance obligations from 2021 to 2025, and to not more than 6% of a source's compliance obligations from 2026 to 2030. This is a reduction from the current 8% restriction.
  • Requires ARB to update the GHG Scoping Plan by January 2018. This plan is intended to guide the development of implementing rules for the C&T extension.
  • Prohibits local air districts from adopting CO2 emission reduction rules that affect sources subject to the C&T program. This is a direct rejection of the regulatory effort currently underway in the San Francisco Bay Area to adopt GHG emission caps on oil refineries already subject to the C&T program.

Assembly Bill 617

  • Requires CARB to establish uniform statement procedures for reporting criteria and toxic air pollutant emissions from stationary sources. Requires most stationary sources in the state to report their emissions annually to CARB under the new system.
  • Requires CARB to establish a monitoring plan for community air monitoring systems and identify high priority locations. Allows local air districts to require fence-line monitoring requirements at facilities that are within, or could impact, identified high priority locations.
  • Requires CARB to prepare a report by October 2018 containing a statewide strategy to reduce emissions in communities affected by a high cumulative exposure burden and identify locations for community emission reduction programs.
  • Requires air districts to prioritize and implement BARCT requirements for facilities subject to the C&T program.
  • Requires air districts to use the CARB BACT clearinghouse when making BACT determinations.
  • Requires CARB to augment its current BACT clearinghouse with a BARCT clearinghouse.
  • Increases the minimum fine for air pollution violations from $1,000 per violation to $5,000 per violation.

For more information on the recently passed Assembly Bills, please contact your local Trinity office by calling (800) 229-6655.