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SB-18 Hydrogen: green hydrogen: emissions of greenhouse gases.(2021-2022)

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Date Published: 06/30/2021 09:00 PM
SB18:v93#DOCUMENT

Amended  IN  Assembly  June 30, 2021
Amended  IN  Assembly  June 21, 2021
Amended  IN  Assembly  June 07, 2021
Amended  IN  Senate  May 20, 2021
Amended  IN  Senate  May 03, 2021
Amended  IN  Senate  March 23, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 18


Introduced by Senator Skinner
(Coauthor: Senator Eggman)
(Coauthors: Assembly Members Carrillo, Holden, Muratsuchi, and Quirk)

December 07, 2020


An act to add Sections 38561.8 and 39619.9 to, and to add and repeal Section 38561.7 to of, the Health and Safety Code, to add and repeal Section 25307 of the Public Resources Code, and to amend Section 400.3 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 18, as amended, Skinner. Hydrogen: green hydrogen: emissions of greenhouse gases.
(1) The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. The act requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years.
This bill would require the state board, by December 31, 2022, as a part of the scoping plan and the state’s goal for carbon neutrality, to prepare a strategic plan for accelerating the production and use of hydrogen, including a specific plan to accelerate production and use of green hydrogen in California and an analysis of how curtailed electrical generation could be better utilized to help meet the state’s greenhouse gas emissions reduction goals. identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals of the act and the state’s other climate goals. The bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state board’s internet website by June 1, 2023, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in developing the strategic plan, making these evaluations, to consult with the California Workforce Development Board and labor and workforce organizations.
(2) Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission), Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(3) Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(4) This bill would require the state board, by June 1, 2023, in conjunction with the Energy Commission and the PUC, to (A) jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules, (B) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entity’s jurisdiction, (C) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (D) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2) California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3) In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4) Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5) California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6) California’s leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019.
(7) Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade.
(8) Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, and air travel, and accelerate progress towards the state’s climate, clean air, and clean energy goals.
(9) Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10) Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11) Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12) Continuing to support the build out of hydrogen infrastructure, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift from conventional hydrogen to green hydrogen.
(13) The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities to developing and employing California’s skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. California’s policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(b) It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing renewable resources into the electrical grid, create jobs, and provide new clean technology to decarbonize challenging sectors.

SEC. 2.

 Section 38561.7 is added to the Health and Safety Code, to read:

38561.7.
 (a) Not later than December 31, 2022, as part of the scoping plan prepared pursuant to Section 38561 and the state’s goal for carbon neutrality, the state board shall prepare a strategic plan for accelerating the production and use of hydrogen, including a specific plan to accelerate production and use of green hydrogen, in California to help meet identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals set forth in this division. The division and the state’s other climate goals. The evaluation to be included in the scoping plan shall include all of the following:

(A)A strategic plan

(1) A description of potential efforts for promoting, scaling, and utilizing green hydrogen in the state to help achieve the state’s climate, clean energy, and clean air objectives.

(B)An assessment of difficult to decarbonize

(2) A description of difficult-to-decarbonize sectors of the economy for which green hydrogen may be a more feasible and cost-effective decarbonization method than other alternatives. For purposes of this section, to “decarbonize” means to reduce or eliminate associated emissions of greenhouse gases. This assessment shall include an estimate of the amount of greenhouse gas emissions reduction and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.

(C)

(3) A review of similar efforts to deploy hydrogen internationally, including opportunities to collaborate with other jurisdictions to accelerate market scale, cost reductions, and global climate benefits.

(D)Recommendations to the Legislature for legislative or agency actions to implement the strategic plan. The recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.

(E)A strategic plan for supporting hydrogen infrastructure and end uses in difficult to decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This plan shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.

(F)The strategic plan should also include the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the state’s climate, clean energy, and clean air objectives.

(G)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall consult with the Independent System Operator in the preparation of the analysis.

(b) In developing the strategic plan evaluation pursuant to subdivision (a), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state approved state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
(c) This section shall remain in effect only until January 1, 2024, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2024, deletes or extends that date.

SEC. 3.

 Section 38561.8 is added to the Health and Safety Code, to read:

38561.8.
 (a) For purposes of this section, “decarbonize” means to reduce or eliminate associated emissions of greenhouse gases.
(b) The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state board’s internet website by June 1, 2023. The evaluation shall include, but not be limited to, all the following:
(1) Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the state’s climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2) A description of strategies supporting hydrogen infrastructure and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3) A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the state’s climate, clean energy, and clean air objectives.
(4) An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5) An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c) In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.

SEC. 4.

 Section 39619.9 is added to the Health and Safety Code, to read:

39619.9.
 By June 1, 2023, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a) Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1) The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2) Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3) Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4) The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b) Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entity’s jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c) Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d) Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.

SEC. 3. SEC. 5.

 Section 25307 is added to the Public Resources Code, to read:

25307.
 (a) For purposes of this section, “decarbonizing” means reducing or eliminating associated emissions of greenhouse gases.
(b) As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.

SEC. 4. SEC. 6.

 Section 400.3 of the Public Utilities Code is amended to read:

400.3.
 The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in all of their decarbonization strategies. For purposes of this section, “decarbonization strategies” means actions undertaken to reduce or eliminate emissions of greenhouse gases.