California Trims Carbon Permits; Refiners Get $4B Relief


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- California is tightening its market-based carbon tax, 
prompting oil refiners and heavy industries to cut emissions at double the 
previous rate or purchase additional pollution permits.

   The regulatory overhaul, taking effect September 1, accelerates the state's 
cap decline by removing 118 million carbon allowances from circulation to drive 
an 11% annual reduction in permitted emissions through 2030, the California Air 
Resources Board (CARB) said in a news release Friday (5/29).

   The policy change raises long-term compliance mandates for West Coast fuel 
suppliers, who must secure these shrinking permits to cover their greenhouse 
gas footprints. To mitigate the risk of immediate retail gasoline price 
volatility, the state is providing refiners and manufacturers $4 billion in 
facility upgrade subsidies and $800 million in near-term compliance relief.

   "At a moment when climate policy is under attack and global economic 
upheaval is creating real uncertainty, this rulemaking is critically important 
for California," CARB Chair Lauren Sanchez announced in the news release.

   CARB is scheduled to host a public workshop this summer to begin updating 
compliance offset protocols as required under SB 840 of the California Global 
Warming Solutions Act of 2006. 




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