Washington State Amends Cap-and-Invest Program

Washington State’s Cap-and-Invest program has been operational since January 2023. Under the program, the state sets a limit (i.e., cap), that declines over time, on aggregate statewide greenhouse gas emissions. Obligated entities are then required to obtain allowances for their applicable emissions. When Cap-and-Invest went into effect in 2023, most businesses that emitted 25,000 metric tons of carbon dioxide equivalent (CO2e) emissions or more annually – roughly equal to the yearly sale of 4.3 million gallons of propane – were required to participate in the program and obtain allowances.

This week, Washington State Governor Bob Ferguson signed House Bill (HB) 2215 into law. The bill creates a two-tiered coverage system for fuel suppliers, including those selling propane, based on their date of service. Suppliers that operated in the state before January 1, 2023 will still adhere to the current 25,000 metric tons of CO2e coverage threshold. However, suppliers that went into business on or after January 1, 2023 will be considered covered entities, and required to fully participate in Cap-and-Invest, if they emit 500 metric tons of CO2e annually, which equates to roughly 87,000 gallons of propane – less than three rail cars. Going forward, any fuel supplier that is not a registered participant in the state’s carbon market will be prohibited from receiving state and local government contracts.  

Matt Solak, Executive Director of the Pacific Propane Gas Association (PPGA), has been engaged on this legislation since it was first introduced in Olympia. “The PPGA worked tirelessly to improve HB 2215 throughout the legislative process,” said Solak. “While we opposed the final version of the bill, our efforts improved the final product and should limit the overall negative impact that the law will have on customers in Washington. The PPGA will continue to advocate for policies in the CCA that reduce regulatory compliance for members and bring the cost of propane down for customers.”

According to Washington’s Department of Enterprise Services, the current average cap-at-rack price for propane is 39 cents per gallon. As of the 2024 industry sales report, Washington State is the 20^th largest state propane market in the country, with 180 million gallons of fuel sold.

For more information, contact NPGA’s Senior Director of State Advocacy & Affairs, Jacob Peterson.