Bill > A4278

Introduced Session

This bill would require the Department of Environmental Protection (DEP) to establish a Statewide cap on greenhouse gas emissions from certain major emitters of greenhouse gases in the State, and to hold auctions to sell greenhouse gas emissions allowances, which major emitters would be required to purchase and retire in order to emit greenhouse gases. As provided in section 4 of the bill, "major emitters" would consist of certain entities that emit at least 25,000 metric tons of greenhouse gases annually, including persons who own and operate any facility with that level of emissions, electric public utilities, electric power generators, gas public utilities and other fossil fuel suppliers, and railroad companies. Subsection c. of section 4 of the bill would exempt certain greenhouse gas emissions from the 25,000 metric ton threshold, including emissions from facilities that participate in the greenhouse gas emissions allowance trading program established pursuant to section 3 of P.L.2007, c.340 (C.26:2C-47), i.e., the Regional Greenhouse Gas Initiative (RGGI). Under the bill, the DEP would be required to establish an emissions baseline, which establishes the proportionate share that the total greenhouse gas emissions of major emitters bears to the total anthropogenic greenhouse gas emissions in the State, based on data reported to the department under section 5 of P.L.2007, c.112 (C.26:2C-42) or provided as required by this act, as well as other relevant data. Within two years after the bill is enacted, and periodically thereafter, the DEP would be required to adopt annual allowance budgets - the amount of allowable greenhouse gas emissions from major emitters in the State - for the first four-year compliance period of the program. The budgets would be based on the greenhouse gas emissions reduction goals established in the "Global Warming Response Act," P.L.2007, c.112 (C.26:2C-37 et al.). The bill would also require the DEP to hold up to four auctions annually for the distribution of greenhouse gas emissions allowances, which would permit the holder to emit one metric ton of greenhouse gases. The bill would require the DEP to establish minimum and maximum prices for a greenhouse gas emissions allowance for each auction. For the first year in which an auction is held, the minimum price for an allowance would be $50, and the DEP would be required to increase the price by five percent plus the rate of inflation each year thereafter. Proceeds from the auction would be deposited in the "Global Warming Solutions Fund" established pursuant to section 6 of P.L.2007, c.340 (C.26:2C-50) and would be used for the purposes delineated for that fund in section 7 of P.L.2007, c.340 (C.26:2C-51). The bill would amend the latter section of law to authorize the DEP to utilize up to four percent of deposits in the "Global Warming Solutions Fund" to administer the program established by the bill. Under sections 7 and 8 of the bill, the DEP would be required to distribute an allocation of allowances, at no cost, to certain emissions-intensive, trade exposed industries, in order to mitigate the economic burden on those industries. Similarly, the DEP would distribute allowances at no cost to electric public utilities and gas public utilities, in order to mitigate costs to utility ratepayers. For the first four years of the program, the no-cost allowance allocation would be 100 percent of entity's baseline greenhouse gas emissions, and would decrease by three percent each four years thereafter, after which the bill would direct the DEP to establish an appropriate allocation. Section 9 of the bill would direct the DEP to develop protocols for approving and retiring offset credits, which could also be used to authorize a major emitter to emit one metric ton of greenhouse gases. The bill would establish certain minimum requirements for an offset credit, including that it be associated with a project that provides direct environmental benefits to the State or is located in a jurisdiction with which New Jersey has entered into a linkage agreement. Section 10 of the bill would direct the DEP to establish a temporary stakeholder task force to produce information about fuel pricing, profit margins, and transaction data in the State. The task force would submit a report to the Governor and the Legislature, after which it would dissolve. A person who violates the bill's provisions could be liable for a civil penalty or civil administrative penalty of up to $50,000 per violation. The bill would provide that each day during which a violation continues would constitute an additional, separate, and distinct offense.

Committee Categories

Balvir Singh (D)*, 

Introduced, Referred to Assembly Environment, Natural Resources, and Solid Waste Committee (on 05/02/2024)

Official Document