Tradeable Performance Standard Act

I 116TH CONGRESS 2D SESSION H. R. 8582 To amend the Clean Air Act to establish a tradeable performance standard covering emissions from the electricity generation and industrial sectors, and for other purposes. IN THE HOUSE OF REPRESENTATIVES OCTOBER 13, 2020 Mr. CASTEN of Illinois (for himself and Mr. MOULTON) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend the Clean Air Act to establish a tradeable perform- ance standard covering emissions from the electricity generation and industrial sectors, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Tradeable Perform- 4 ance Standard Act’’. 5 SEC. 2. TABLE OF CONTENTS. 6 The table of contents for this Act is as follows: 7 Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Combating the climate crisis. VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8582 IH ‘‘TITLE VII—GREENHOUSE GAS POLLUTION REDUCTION PROGRAM ‘‘PART A—GLOBAL WARMING POLLUTION REDUCTION TARGETS ‘‘Sec. 701. Definitions. ‘‘Sec. 702. Reduction targets for covered entities. ‘‘PART B—DESIGNATION OF GREENHOUSE GASES AND THERMAL ENERGY REPORTING PROGRAM ‘‘Sec. 711. Greenhouse gases. ‘‘Sec. 712. Carbon dioxide equivalent value of greenhouse gases. ‘‘Sec. 713. Thermal energy reporting program. ‘‘Sec. 714. EIA and EPA reporting. ‘‘PART C—PROGRAM RULES ‘‘Sec. 721. Requirements. ‘‘Sec. 722. Distribution of emission allowances. ‘‘Sec. 723. Trading. ‘‘Sec. 724. Voluntary program participation. ‘‘Sec. 725. Penalty for noncompliance. ‘‘Sec. 726. Emission allowance tracking system. ‘‘Sec. 727. Other program rules. ‘‘Sec. 728. Oversight. ‘‘Sec. 729. Regulations. ‘‘Sec. 730. Savings provisions. SEC. 3. COMBATING THE CLIMATE CRISIS. 1 The Clean Air Act (42 U.S.C. et seq.) is amended 2 by adding after title VI the following new title: 3 ‘‘TITLE VII—GREENHOUSE GAS 4 POLLUTION REDUCTION PRO- 5 GRAM 6 ‘‘PART A—GLOBAL WARMING POLLUTION 7 REDUCTION TARGETS 8 ‘‘SEC. 701. DEFINITIONS. 9 ‘‘In this title: 10 ‘‘(1) AVERAGE CARBON INTENSITY FOR QUALI- 11 FIED ELECTRIC FACILITIES.—The term ‘average 12 carbon intensity for qualified electric facilities’ 13 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8582 IH means the number that equals the total amount of 1 greenhouse gas emissions in metric tons of carbon 2 dioxide equivalent emitted from qualified electric fa- 3 cilities in a calendar year as reported under section 4 714 divided by the total quantity of megawatt hours 5 of electricity produced by qualified electric facilities 6 in such calendar year as reported under section 714. 7 ‘‘(2) AVERAGE CARBON INTENSITY FOR QUALI- 8 FIED THERMAL FACILITIES.—The term ‘average car- 9 bon intensity for qualified thermal facilities’ means 10 the number that equals the total amount of green- 11 house gas emissions in metric tons of carbon dioxide 12 equivalent emitted from qualified thermal facilities 13 in a calendar year as reported under section 713 di- 14 vided by the total quantity of useful thermal energy 15 output from qualified thermal facilities in such cal- 16 endar year as reported under section 713. 17 ‘‘(3) BOTTOMING CYCLE COGENERATION GEN- 18 ERATOR.—The term ‘bottoming cycle cogeneration 19 generator’ means any generator that produces elec- 20 tricity from otherwise-wasted heat, pressure, or both, 21 using any of the following technologies: 22 ‘‘(A) An organic ranking cycle. 23 ‘‘(B) A waste-heat recovery steam gener- 24 ator. 25 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8582 IH ‘‘(C) A back pressure steam turbine. 1 ‘‘(D) A Stirling engine. 2 ‘‘(4) CARBON DIOXIDE EQUIVALENT.—The 3 term ‘carbon dioxide equivalent’ means the unit of 4 measure, expressed in metric tons, of greenhouse 5 gases, as provided under section 712. 6 ‘‘(5) COVERED ENTITY.—The term ‘covered en- 7 tity’ means each of the following: 8 ‘‘(A) A qualified cogeneration facility. 9 ‘‘(B) A qualified electric facility. 10 ‘‘(C) A qualified thermal facility. 11 ‘‘(6) DESIGNATED REPRESENTATIVE.—The 12 term ‘designated representative’ means, with respect 13 to a covered entity, a thermal reporting entity, or 14 any other entity receiving or holding emission allow- 15 ances under this title, an individual authorized, 16 through a certificate of representation submitted to 17 the Administrator by the owners and operators, to 18 represent the owners and operators in all matters 19 pertaining to this title (including the holding, trans- 20 fer, or disposition of emission allowances), and to 21 make all submissions to the Administrator under 22 this title. 23 ‘‘(7) EMISSION ALLOWANCE.—The term ‘emis- 24 sion allowance’ means a limited authorization to 25 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8582 IH emit, in an amount of, 1 metric ton of carbon diox- 1 ide equivalent of a greenhouse gas in accordance 2 with this title. 3 ‘‘(8) FUEL-BASED CAPACITY.—The term ‘fuel- 4 based capacity’ means— 5 ‘‘(A) for generators that produce useful 6 thermal energy output with the combustion of 7 fuel, the peak fuel combustion rate; and 8 ‘‘(B) for generators that produce useful 9 thermal energy output without the combustion 10 of fuel, the peak useful thermal energy output 11 rate divided by 0.7. 12 ‘‘(9) GREENHOUSE GAS.—The term ‘greenhouse 13 gas’ means any gas listed in section 711. 14 ‘‘(10) GREENHOUSE GAS EMISSION.—The term 15 ‘greenhouse gas emission’ means the release of a 16 greenhouse gas into the ambient air. 17 ‘‘(11) HOLD.—The term ‘hold’ means, with re- 18 spect to an emission allowance, to have in the appro- 19 priate account created pursuant to the process under 20 section 726(2). 21 ‘‘(12) QUALIFIED COGENERATION FACILITY.— 22 The term ‘qualified cogeneration facility’ means any 23 generator that simultaneously produces useful ther- 24 mal energy output and electricity and— 25 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8582 IH ‘‘(A) has a rated capacity of 2 megawatts 1 or greater; or 2 ‘‘(B) is classified as a qualified cogenera- 3 tion facility pursuant to section 724(c). 4 ‘‘(13) QUALIFIED ELECTRIC FACILITY.—The 5 term ‘qualified electric facility’ means any generator 6 that produces electricity, including a bottoming cycle 7 cogeneration generator— 8 ‘‘(A) with a rated capacity of 2 megawatts 9 or greater; or 10 ‘‘(B) with a rated capacity of less than 2 11 megawatts that is classified as a qualified elec- 12 tric facility pursuant to section 724(a). 13 ‘‘(14) QUALIFIED THERMAL FACILITY.—The 14 term ‘qualified thermal facility’ means any generator 15 that produces thermal energy— 16 ‘‘(A) with a rated fuel-based capacity of at 17 least 50,000,000 British thermal units on a 18 higher heating value basis per hour or greater, 19 excluding any generator producing useful ther- 20 mal energy output that the Administrator de- 21 termines is used to wholly or partially provide 22 carbon as a chemical ingredient for a process to 23 manufacture goods; or 24 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 8582 IH ‘‘(B) with a rated fuel-based capacity of 1 less than 50,000,000 British thermal units on 2 a higher heating value basis per hour that is 3 classified as a qualified thermal facility pursu- 4 ant to section 724(b). 5 ‘‘(15) THERMAL REPORTING ENTITY.—The 6 term ‘thermal reporting entity’ means— 7 ‘‘(A) a qualified thermal facility; 8 ‘‘(B) a qualified cogeneration facility; 9 ‘‘(C) any generator that produces useful 10 thermal energy output with a rated fuel-based 11 capacity of at least 30,000,000 British thermal 12 units on a higher heating value basis per hour, 13 but less than 50,000,000 British thermal units 14 on a higher heating value basis per hour; or 15 ‘‘(D) any other entity that produces or de- 16 livers useful thermal energy output the produc- 17 tion or delivery of which results or may result 18 in greenhouse gas emissions if the Adminis- 19 trator determines that reporting under section 20 713 by such entity will help achieve the targets 21 specified in section 702. 22 ‘‘(16) USEFUL THERMAL ENERGY OUTPUT.— 23 The term ‘useful thermal energy output’ means ther- 24 mal energy as measured in million British thermal 25 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 8582 IH units on a higher heating value basis produced by a 1 generator that produces thermal energy net of the 2 energy in inlet combustion air, feedwater, or any 3 other fluids not used as fuels of combustion. 4 ‘‘SEC. 702. REDUCTION TARGETS FOR COVERED ENTITIES. 5 ‘‘(a) IN GENERAL.—The regulations issued under 6 section 729 shall establish enforceable targets for the 7 greenhouse gas emissions of covered entities, such that— 8 ‘‘(1) in 2030, the aggregate quantity of green- 9 house gas emissions from covered entities does not 10 exceed 60 percent of the aggregate quantity of 11 greenhouse gas emissions from covered entities in 12 2019; and 13 ‘‘(2) in 2040, the aggregate quantity of green- 14 house gas emissions from covered entities does not 15 exceed zero. 16 ‘‘(b) DEFINITION.—For purposes of this section, the 17 term ‘greenhouse gas emissions from covered entities in 18 2019’ means greenhouse gas emissions to which section 19 721 would have applied if the requirements of this title 20 for the specified year had been in effect for 2019. 21 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 8582 IH ‘‘PART B—DESIGNATION OF GREENHOUSE GASES 1 AND THERMAL ENERGY REPORTING PROGRAM 2 ‘‘SEC. 711. GREENHOUSE GASES. 3 ‘‘For purposes of this title, the following are green- 4 house gases: 5 ‘‘(1) Carbon dioxide. 6 ‘‘(2) Methane. 7 ‘‘(3) Nitrous oxide. 8 ‘‘(4) Sulfur hexafluoride. 9 ‘‘(5) Any perfluorocarbon. 10 ‘‘(6) Nitrogen trifluoride. 11 ‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF 12 GREENHOUSE GASES. 13 ‘‘(a) IN GENERAL.—Any provision of this title that 14 refers to a quantity or percentage of a quantity of a green- 15 house gas shall be treated as a reference to the quantity 16 or percentage of the greenhouse gas expressed in carbon 17 dioxide equivalents. 18 ‘‘(b) VALUES.—Except as provided by the Adminis- 19 trator under subsection (c), for the purposes of this title, 20 the carbon dioxide equivalent value of a greenhouse gas 21 shall be equal to the 100-year global warming potential 22 for such greenhouse gas that is provided in the Fifth As- 23 sessment Report of the Intergovernmental Panel on Cli- 24 mate Change. 25 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 8582 IH ‘‘(c) USE OF 20-YEAR GLOBAL WARMING POTEN- 1 TIAL.—If the Administrator determines that it is more ap- 2 propriate for a greenhouse gas, the Administrator may 3 publish a determination in the Federal Register that such 4 greenhouse gas has a carbon dioxide equivalent value 5 equal to the 20-year global warming potential for such 6 greenhouse gas that is provided in the Fifth Assessment 7 Report of the Intergovernmental Panel on Climate 8 Change. 9 ‘‘SEC. 713. THERMAL ENERGY REPORTING PROGRAM. 10 ‘‘(a) REGULATIONS.—Not later than 18 months after 11 the date of enactment of this title, the Administrator shall 12 issue regulations establishing a program, to be known as 13 the Federal thermal energy reporting program. Such regu- 14 lations shall— 15 ‘‘(1) require each thermal reporting entity to 16 submit to the Administrator data on— 17 ‘‘(A) the type, quality, and quantity of fuel 18 used for onsite useful thermal energy output 19 production by such thermal reporting entity; 20 ‘‘(B) the quantity of useful thermal energy 21 output produced by such thermal reporting en- 22 tity as calculated pursuant to subsection (e); 23 and 24 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 8582 IH ‘‘(C) the quantity of greenhouse gas emis- 1 sions associated with such useful thermal en- 2 ergy output production; 3 ‘‘(2) require thermal reporting entities to sub- 4 mit to the Administrator data sufficient to ensure 5 compliance with or implementation of the require- 6 ments of this title; 7 ‘‘(3) ensure the completeness, consistency, 8 transparency, accuracy, precision, and reliability of 9 data gathered under the Federal thermal energy re- 10 porting program; 11 ‘‘(4) include methods for avoiding double re- 12 porting to the maximum extent possible; 13 ‘‘(5) require that thermal reporting entities pro- 14 vide the data required in this section in reports sub- 15 mitted electronically to the Administrator, in such 16 form and containing such information as may be re- 17 quired by the Administrator; 18 ‘‘(6) include requirements for keeping records 19 supporting or related to, and protocols for auditing, 20 data submitted under the Federal thermal energy re- 21 porting program; 22 ‘‘(7) establish consistent policies for calculating 23 carbon content and greenhouse gas emissions for 24 VerDate Sep 11 2014 03:27 Nov 01, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8582.IH H8582 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 8582 IH any type of fuel for which data is submitted under 1 the Federal thermal energy reporting program; 2 ‘‘(8) provide for immediate dissemination, to 3 States and Indian Tribes, of all data reported under 4 the Federal thermal energy reporting program as 5 soon as practicable after electronic audit by the Ad- 6 ministrator and any resulting correction of data, ex- 7 cept that data shall not be disseminated under this 8 paragraph if— 9 ‘‘(A) nondissemination of the data is vital 10 to the national security of the United States, as 11 determined by the President; or 12 ‘‘(B) the data is confidential business in- 13 formation that cannot be derived from informa- 14 tion that is otherwi [Text truncated for display. 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