Advanced BioFuels USA

by Debra Kahn (Politico’s The Long Game)  Don’t look now, but the country’s first- and third-largest economies are both pursuing carbon prices on industrial emissions. New York regulators on Monday approved their first-ever “scoping plan,” or roadmap for how they’re going to cut emissions 85 percent from 1990 levels by 2050, as Marie J. French reports. It includes a policy that’s anathema to some on the left: a carbon market.

And California approved the fourth iteration of its scoping plan last week, which reserves a significant role for cap and trade through 2045. The policy was the bane of environmental justice groups last time around, but this time they largely held their fire.

New York is calling it “cap and invest,” but it’s the same concept: High-emitting facilities have to either lower their emissions in accordance with the cap, or buy permits to cover them. The proceeds could go to programs that lower emissions on the local level, with priority given to disadvantaged communities, or rebates to cushion higher energy costs for low-income households.

Cap and trade has been on the ropes for a while, ever since Congress failed to pass a national program in 2010. It became a policy non grata on the left shortly after that, due to concerns about it allowing industrial facilities, often located in economically disadvantaged areas, to buy their way out of actually reducing emissions.

It was a major part of environmental justice groups’ objections to President Biden’s consideration — and ultimate rejection — of California’s top climate regulator, Mary Nichols, to lead EPA.

Its enduring attraction is the money. California has raised more than $22 billion since auctions began a decade ago, and has been spending it on things like electric vehicle incentives, affordable housing, tree-planting and repairing drinking water systems. Both states specify that at least 35 percent of the money has to benefit disadvantaged communities.

And it’s also about the actual goal. Without an overarching carbon cap and an accounting mechanism, it’s impossible to know whether the states are actually meeting their targets.

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New York is considering modifications like limits on trading pollution allowances into or near disadvantaged communities, source-specific caps for polluters impacting those communities and targeted air-quality monitoring.

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California also introduced a new emission-reduction option, carbon capture and sequestration, which is drawing ire away from cap and trade.

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It’s just the beginning for New York, which will have to do an entire separate rulemaking to implement the program. Washington (the state, not D.C.) is next, and is moving fast: Its carbon market is starting auctions in February, and officials say they may eventually try to link with California.  READ MORE

N.Y. adopts cap and trade as a pillar of climate action (E&E News)

New York state climate panel outlines ambitious road map to reduce greenhouse gas emissions (Utility Dive)

New York climate plan has ‘major role’ for energy storage across different sectors (Energy Storage)

New York passes sweeping plan to reduce emissions and ‘lead the way on solving climate change’ — A climate plan approved Monday paves the way for New York to enact a “cap and invest” program similar to California’s long-established cap-and-trade system. (Politico)

Excerpt from Politico:  … Unanswered questions remain, however: how much will the transition cost a typical household; will the state Legislature embrace statutory measures required to make some components a reality; will (New York Gov. Kathy) Hochul embrace a price hike on gas and heating fuels and what electricity source will replace the gas power plants that currently dominate New York’s grid.

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That includes implementing the “cap and invest” program — more commonly known as cap-and-trade — that would place a statewide limit on emissions, in line with achievement of the state’s statutory reductions and require fuel wholesalers and others to buy a declining number of allowances to emit. The limits would raise billions in revenue to fund various incentives, grants and investments also outlined in the plan.

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New York was also engaged for years in discussions to create a regional cap-and-trade program for transportation emissions that ultimately collapsed amid rising concern about high gas prices and disagreement over emissions levels.

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Environmental justice groups pushed to ensure the plan did not allow a large role for alternative fuels and considered concerns around “cap and invest.”

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The plan also calls for the state to prohibit replacement gas or other fossil fuel furnaces in homes, apartment buildings and businesses starting in 2030. New gas car sales are on track to be prohibited in 2035.

Achievement of the state’s targets requires a massive buildout of on-shore solar, wind, offshore wind and battery storage.

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Even with aggressive weatherization and energy efficiency improvements, the demand for electricity is expected to double by 2050.

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Some critics of the plan have raised concerns about the lack of detailed cost impacts for New York residents who will have to electrify their home heating and purchase an electric vehicle in future years.

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While the largest focus for the plan is on electrification, the plan does leave the door cracked open for renewable natural gas and hydrogen to play a role in the state’s energy future, along with other alternative fuels.

Under the plan, DEC could also implement what’s known as a low-carbon fuel standard for the transportation sector. Such a program incentivizes electrification and lower-emissions fuels over traditional gas and diesel, but has faced criticism from environmental justice groups who worry about continued co-pollutants in their communities and prefer an exclusive focus on electrification.

Renewable natural gas is produced by purifying and refining gas produced at landfills and from cow manure. The plan prioritizes on-site use of the raw biogas produced by the waste sources and recognizes the limited availability of renewable natural gas, but calls for research on the potential for it, as well as green hydrogen, wood and biodiesel blends with carbon capture for some hard to electrify building systems.

The plan calls for another planning process by state agencies to transition the gas system that heats millions of homes and fuels most of the state’s power plants, and opens the door for analyzing the use of RNG and hydrogen to decarbonize that energy source.

The draft of the plan discussed at the penultimate meeting added a new definition of “low carbon intensity hydrogen” that riled several council members who linked it to lobbying efforts by the fossil fuel industry. The final draft removes all references to the term and instead adds “pink hydrogen” produced from zero-emissions nuclear energy as a type of “green hydrogen.”

The plan also recommends legislative action across a number of fronts:

• For transportation, it recommends lawmakers take steps to enact a revenue-neutral “feebate” program to increase the costs of buying gas cars and incentivize electric vehicle purchases; higher registration fees for higher emissions vehicles; a per-mile vehicle fee to accommodate the eventual reduction in revenue from the gas tax; and strengthen “smart growth” laws to avoid state funding that promotes sprawl.