House Democrats Unveil Sweeping Climate Legislation to Transform Country’s Energy Mix

(Aken Gump) On Tuesday, March 2, Democrats on the House Energy and Commerce (E&C) Committee introduced a sweeping climate proposal—the Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act—an amended version of draft legislation released last year in the 116th Congress. The measure, which authorizes $565 billion in spending over 10 years, sets two overarching goals with respect to national greenhouse gas pollution: (1) achieving net-zero emissions nationwide by 2050 (a goal endorsed by President Joe Biden); and (2) a 50 percent reduction in nationwide greenhouse gas pollution from 2005 levels by 2030.

One path forward is to incorporate this legislation into a broader, second reconciliation package this spring designed to provide stimulus to the economy through clean energy jobs, tax incentives and infrastructure investments and help the United States meet its Paris Agreement commitments. The CLEAN Future Act aims to reduce greenhouse gas emissions by investing significantly in several areas, including clean energy, infrastructure modernization, sustainability and environmental justice initiatives. The bill would establish a “Clean Electricity Standard” that requires 100 percent clean electricity generation by 2035, a goal President Biden also backed on the campaign trail. While some progressive Democrats have called for a price on carbon emissions, the CLEAN Future Act does not include such language, as E&C Chairman Frank Pallone (D-NJ) acknowledged that such an approach lacked sufficient political support from more moderate Democrats and Republicans in both the House and Senate.

The legislation contains many similarities to last year’s initial draft (which we outlined here), but also contains several additions, including language directing the Securities and Exchange Commission (SEC) to require public companies to disclose information about their exposure to climate-related risks.

Notably, it authorizes funds for environmental justice protections, including a stipulation that 40 percent of available funds be dedicated to environmental justice communities (to implement President Biden’s Justice40 Initiative), and it provides for a new program to fund lead service line removal at no cost to homeowners, creates a new Office of Energy Equity at the Department of Energy (DOE) and adds a new climate justice grants program. Entirely new to this year’s draft text are provisions introducing waste reduction measures (including a moratorium on the permitting of new plastic production facilities) and programs intended to help workers impacted by the transition away from a fossil-based economy. Finally, this year’s iteration omits a number of provisions that Congress enacted in its late 2020 appropriations legislation, which included programs providing rural grants, weatherization assistance, energy efficiency improvements in buildings, the “National Smart Manufacturing Plan” and motor vehicle rebates.

A slew of climate-related executive actions from President Biden’s Climate Day on January 27 preceded the House package. As congressional Democrats continue to develop and advance their climate agenda and use the CLEAN Future Act as a starting point for broader climate discussions, the United States will convene a climate summit on April 22 to reassert its climate leadership to the global community. The White House continues to refine its greenhouse gas emission reduction goals as part of its new nationally determined contribution (NDC) under the Paris Agreement, which we anticipate will be announced before the April 22 summit.

Bill text for the CLEAN Future Act is available here, and a section-by-section summary is available here. Further, a summary of changes in the revised version is available here. READ MORE

Excerpt from DTN Progressive Farmer: There are provisions in the bill that would provide more transparency and set tighter deadlines for small oil refiners seeking exemptions to the Renewable Fuels Standard. The bill also would require EPA to make quicker decisions when approving renewable fuels that lower greenhouse gas emissions.

While there's increased focus on agricultural emissions and ways farmers could benefit from a carbon sequestration program at USDA, the CLEAN Future Act does not address agricultural emissions. The bill largely addresses the power and transportation sectors.

As part of transportation goals in the bill, EPA would create new rules for emissions from vehicles including locomotives and aircraft. EPA would also move to consider new technologies and pathways that lower emissions in liquid fuels and do so in an accelerated timeframe. EPA would have to take actions on petitions for new renewable fuel pathways within 90 days of submission if at least one state has signed off that a fuel reduces carbon emissions.

In dealing with the battles between the biofuels industry and petroleum refiners on small-refinery exemptions, the bill would set a June 1 deadline for EPA to decide on submitted SREs. Further, starting in 2023, the bill would require full public disclosure on small-refinery exemptions, including the name of the refiner, the number of gallons of renewable fuel involved, and the compliance year for the extension being requested.

"We know renewable fuels like ethanol can play an even larger role in reducing the carbon impacts of our nation's transportation fuels moving forward. The RFS-related provisions in the CLEAN Future Act draft take a step toward maximizing the program's ability to drive innovation and reduce GHG emissions, but more work remains to be done to fully capitalize on ethanol's potential to fight climate change," said Geoff Cooper, president and chief executive officer of the Renewable Fuels Association.

Cooper pointed to a study showing biofuels had already reduced greenhouse gas emissions by nearly 1 billion metric tons. Cooper added RFA will focus on promoting the "climate and environmental justice benefits that renewable fuels bring to the table" in working with Congress on carbon emissions. Cooper added, "In particular, we are eager to discuss the importance of fuel- and vehicle-neutral carbon performance standards that can aggressively and immediately reduce GHG emissions from the transportation sector."

Republicans in major biofuel-producing states have challenged the Democratic push for electric vehicles, citing such a policy move would negatively hurt biofuels going forward. READ MORE