{"id":22111,"date":"2022-01-31T15:05:47","date_gmt":"2022-01-31T20:05:47","guid":{"rendered":"http:\/\/blogs.edf.org\/climate411\/?p=22111"},"modified":"2025-12-03T12:25:38","modified_gmt":"2025-12-03T17:25:38","slug":"colorado-legislators-passed-a-law-to-cut-pollution-from-industry-but-regulators-have-yet-to-deliver","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/climate411\/2022\/01\/31\/colorado-legislators-passed-a-law-to-cut-pollution-from-industry-but-regulators-have-yet-to-deliver\/","title":{"rendered":"Colorado legislators passed a law to cut pollution from industry, but regulators have yet to deliver"},"content":{"rendered":"

As the 2022 legislative session in Colorado gets underway \u2013 with many climate and environmental issues on the agenda \u2013 it\u2019s important to take stock of what legislators accomplished on this front last year. One key action we\u2019ve been tracking closely and hope to see progress on this year: Curbing climate pollution from industry and manufacturing. <\/strong><\/p>\n

On top of Colorado\u2019s existing obligation to cut emissions across the economy, established in the state\u2019s Climate Action Plan in 2019 (HB 19-1261), the legislature passed an additional mandate<\/a> last year directing the state\u2019s Air Quality Control Commission (AQCC) to adopt rules that ensure climate pollution from the industrial and manufacturing sector falls 20% below 2015 levels by 2030.<\/strong><\/p>\n

As we detail below, even with this further direction from legislators and some positive steps, progress on reducing emissions continues to be slow. <\/strong>In the fall, the Commission adopted a new rule that takes aim at climate pollution from four specific industrial facilities in Colorado. The new rule marked an important step forward as the first rule directly regulating climate pollution from one of the state\u2019s major source categories, though together these facilities account for just 2% of the statewide emissions<\/em> (see Figure 1 below).<\/p>\n

<\/p>\n

Figure 1: New industry rules address only 2% of Colorado\u2019s GHG emissions<\/strong><\/p>\n

\"Sources<\/a>
In Phase One, the AQCC addressed a subset of the industrial and manufacturing sector that is energy intensive and trade-exposed (EITE); the rest of the sector will be covered in a Phase Two rulemaking. The figure depicts 2019 emissions by sector based on Colorado\u2019s GHG Inventory. 2019 emissions from the EITE sources are from an April 2021 stakeholder presentation by the Air Pollution Control Division. Emissions are estimated in carbon dioxide-equivalent using the Intergovernmental Panel on Climate Change Fourth Assessment 100-year Global Warming Potential values.<\/figcaption><\/figure>\n

Some of the provisions of the new regulation earn strong marks for environmental integrity: the new emissions trading program will ensure that pollution is accurately tracked and any credited reductions are real and verifiable, while simultaneously ensuring local communities benefit from anticipated reductions in locally-harmful air pollution. Unfortunately, the Commission also adopted provisions that have the potential to severely undermine progress on reducing emissions from these sources.<\/p>\n

Moving forward, the Commission must swiftly follow through with the second phase of this rulemaking\u2014ensuring that emissions across the entire sector fall 20% by 2030. Here’s what you should know about the rules and how AQCC should strengthen industrial sector rules.<\/strong><\/p>\n

Why it matters that four industrial facilities get a special \u2018status\u2019 <\/strong><\/h3>\n

Before getting into the upsides and downsides of the new rule, it\u2019s critical to understand the special status given to the four covered facilities. These facilities are classified as \u201cenergy intensive and trade-exposed\u201d <\/strong>\u2013 a legal status that indicates risk of \u201cemissions leakage,\u201d if lower production in Colorado could end up increasing production \u2013 and emissions \u2013 outside the state. The legislature provided a path forward for regulating these sources: companies manufacturing cement or steel can continue to increase their emissions, as long as they do so while<\/em> deploying the <\/em>\u201c<\/strong>best available emission control technologies<\/strong><\/a>\u201d<\/strong> for greenhouse gas pollution, and also securing reductions consistent with an additional 5%<\/a> of their emissions.<\/p>\n

To implement this standard, a third-party auditor will evaluate each plant and rank technologies that are readily available, technically feasible and cost-effective to reduce emissions. Importantly, the audit includes an analysis of co-pollutant reductions and will recommend strategies that achieve greater benefits for neighboring communities. The Commission then uses that information to set the bar for a performance standard at each facility \u2013 the amount a facility can emit per unit produced.<\/strong> This \u201cintensity-based\u201d approach does not guarantee that absolute emissions (tons of pollution in the atmosphere) go down \u2013 particularly if production goes up.<\/p>\n

Commission paves the way for reducing emissions intensity and protecting air quality<\/strong><\/h3>\n

Once the Commission sets the performance standard, facilities have multiple options to meet it: 1) installing the technologies that were identified in the audit, 2) implementing any other technologies of their choosing that achieve the same performance level (emissions per unit produced), or 3) participating in an emissions trading program with the other cement and steel plants.<\/p>\n

Figure 2 illustrates the nuts and bolts of the third option. The emissions trading program can accelerate and deepen near-term emission reductions, allowing facilities that over-achieve their emissions rates to be awarded \u201cGHG credits\u201d to sell or use themselves in the future \u2013 encouraging earlier and more ambitious action. Accelerating near-term reductions is crucial to minimize the cumulative build-up<\/a> of climate pollution in the atmosphere and, therefore, to secure the safest pathway for Colorado communities.<\/p>\n

Figure 2: Mechanics of the emissions trading program and air quality protections<\/strong><\/p>\n

\"Emissions<\/a>
The Commission sets the bar at each facility for a greenhouse gas performance standard, depicted in blue lines. Notably, that bar moves with annual production\u2014total pollution levels are not guaranteed as production levels change year-to-year. In this example, Cement Plant B is able to reduce one ton of pollution at a lower cost than Cement Plant A or Steel Plant A. Because Steel Plant A can purchase GHG credits from Cement Plant B, Cement Plant B has an incentive to over-achieve its requirements. Importantly, all facilities must achieve the associated co-pollution reductions onsite. The figure is illustrative and does not represent real quantities of climate and co-pollutant emission reductions from the rule, nor does it capture the cumulative climate benefits as emission reductions are sustained over time.<\/figcaption><\/figure>\n

The Commission also built in three strong provisions that can ensure environmental integrity, improve local air quality and drive vital near-term reductions in pollution.<\/p>\n