Washington LCFS awaits next steps

Although Washington state is poised to put a new low-carbon fuel standard (LCFS) credit trading program into law, the program has one more political hurdle to jump before regulators can start enforcing the mandate.

Washington state lawmakers approved HB1091 on 25 April, directing the state Department of Ecology to launch the clean fuels program by the start of 2023, with a mandate for a 20pc reduction in the carbon intensity of transportation fuels by 2038. Govern Jay Inslee (D) is expected to sign the bill into law soon, but the department cannot enforce the program until lawmakers pass a new transportation spending bill that includes at least a 5¢/USG increase in the state's gasoline tax.

This contingency is unlikely to prevent eventual enforcement of the clean fuel standard, according to state representative Joe Fitzgibbon (D), the bill's sponsor.

"It is pretty likely that we will get that passed," he told Argus.

Washington state has significant unmet transportation needs, which means it needs to raise more revenue, he said. The state is under a federal court order requiring it to repair barriers to fish passage, with nearly all those barriers on state highways.

"The cost of repairing is $4bn dollars by 2030 to meet the deadline set out by the US district court," Fitzgibbon said. "That is a significant need that requires we raise transportation revenue."

The fact that legislators passed both the clean fuel standard and cap-and-trade bill now "clears the way" for them to focus on transportation revenue, he said.

There is a possibility that lawmakers could approve a transportation funding bill in a special session later this year, or it could be part of next year's regular session, either of which would clear the way for the LCFS before its scheduled launch date.

"I think there is the will among the legislators [to pass the tax]," Fitzgibbon said. "It is not clear what the size of the transportation package will be. But 5¢/USG is modest."

Opponents of the LCFS legislation have warned the program will lead to higher costs at the pump, although biofuels producers and electric vehicle stakeholders are hopeful that the program will increase demand for their products.

Once the Washington legislation is signed into law, the entire Pacific coast — from British Columbia to California — will have clean fuel mandates in place.

"This is game changing," Finnish biofuels producer Neste said.

By Jessica Dell