When Colorado air pollution regulators started writing rules to cut 20% of the greenhouse gas emissions by heavy industry, the first thing they had to do was exempt the four largest polluters.
The original law says that cement plants and steel plants, which in Colorado are currently emitting up to a million tons a year of planet-warming carbon dioxide, only have to cut emissions 5% if they are using the “best available technology.” The exception applied to exactly four places in the state.
Then the largest industrial pollutants emitter in the state, Suncor, asked to be the fifth member of the club exempted from the limits. The Commerce City refinery, company officials said, needs the same safeguards as those other industries from pricey regulations that would hand advantages to competitors in other states and other nations.
Adding Suncor to the 5% cut list instead of the 20% cut list “would support the broader public policy objective of balancing (greenhouse gas) reductions with protecting the competitiveness of Colorado industries from out-of-state suppliers, whose facilities are not subject to Colorado GHG regulations,” a company spokeswoman said.
Colorado’s conservation community working on climate change and cleaner energy was having none of it.
“Suncor is really the biggest emission source within this industrial sector,” said Becca Curry, Colorado policy advocate with Earthjustice. “I really do question whether, if we’re not including Suncor, we would be able to meet the level of greenhouse gas reductions required to meet our climate targets.”
A skeptical Air Quality Control Commission said no to the request, supported by staff analysis at the Air Pollution Control Division.
“We’re not giving out exemptions, and there’s no process for companies to apply for a (competitive industry) exemption,” said Claybourne Clarke, the supervisor of the Air Pollution Control Division’s climate change unit, in an emailed statement in response to questions. “The legislature defined these industries.”
But the request by a prominent pollution emitter like Suncor, and the fact the conservation community that opposed Suncor’s move largely supported the exemption rules for the other four, shows just how complicated reducing greenhouse gas emissions will be in coming years.
The Air Quality Control Commission’s October session was a complex mediation of arguments over the 5% exemptions, potential trading markets for greenhouse gas reduction credits, and how to make sure renewable energy credits are not double-counted.
The Polis administration and the legislature have agreed on the goal of greenhouse gas cuts of 26% by 2025, and 50% by 2030. But it’s in the rulemaking sessions at a handful of commissions meeting in Denver where dreams meet lawyers.
Legislation passed earlier this year says Colorado’s industry and manufacturing sector as a whole must reduce greenhouse gas emissions by 20% by 2030, from their benchmarked 2015 levels. The bill carved out a handful of manufacturing categories that would fall under a less-restrictive rule because they are “energy-intensive and trade-exposed,” (EITE), meaning they by nature use a lot of fossil fuels and face stiff competition from other states and nations if their costs go up.
The Colorado law, HB 21-1266, said facilities producing specifically cement, steel, aluminum, paper, pulp or iron would instead be required to show they are using the “best available” emissions control technology for their industry, and then cut 5% of emissions after proving that.
There are only four places in Colorado that meet that criteria, and everyone writing or commenting on the bill knew that: the Evraz steel plant in Pueblo, and three cement makers in Pueblo, Florence and Lyons. Outside of the coal-fired electric power utilities, they rank at the top of greenhouse gas polluters in Colorado.
“This is the notion that you don’t overly regulate a certain category of industry because it will just result in carbon leakage,” said Adam DeVoe, a Denver attorney who represents Evraz and one of the cement plants in the commission rulemaking. The example for the steel industry is very, very simple: You either make it in the United States or you buy it from China.”
Environmental groups recognize that reality, DeVoe said, and would rather have the steel made somewhere in the U.S. under federal or local laws that are cleaner than China’s largely coal-driven production methods.
“If one of these facilities were to move out of state because of climate change regulations, or if production were to shift elsewhere, that would reduce emissions in Colorado, but would simply export those emissions to another state or country,” agreed Meera Fickling, a climate policy analyst with Western Resource Advocates. “Since climate change is a cumulative problem, our focus is on reducing overall greenhouse gas emissions. So there’s a unique status given.”
Suncor argued the legislation gave commissioners the power to decide if other facilities could be in the 5% standard instead of the 20% standard. The 5% category could actually result in more reductions from a company like Suncor, a spokeswoman said, because that small group of companies is required to “conduct an audit every five years, employ best energy efficiency management practices, and then reduce emissions by a further 5% on top of these efforts. This drives continuous GHG emissions reductions over time . . . ”
Suncor said that if the commission didn’t want to expand the exemptions, the legislature can. Asked after the commission rejected the idea if Suncor will continue to pursue it at the legislature, the spokeswoman said, “We will continue to evaluate and support public policy solutions to achieving (greenhouse gas) emissions reductions while supporting Colorado industries, jobs, and consumers.”
The state’s 2005 benchmark for greenhouse gas emissions said all sources in Colorado emitted about 140 million metric tons of carbon dioxide that year. To reach their goals, Colorado regulators need to cut 70 million tons by 2030. Strides have already been made by closures and scheduled closures of the worst polluters, coal-fired power plants, and through stricter regulation of oil and gas production that releases greenhouse-multiplying methane into the sky.
Transportation is another big source of CO2, and regulators are proposing to tackle that through changes to Department of Transportation projects and boosting vehicles and a charging network that run on renewable, clean electricity.
The biggest industrial sector emissions are concentrated at the top. The EPA puts Suncor’s 2020 CO2 emissions at just under 900,000 metric tons. The Rio Grande cement plant in Pueblo was at 802,000 metric tons, and Evraz was at 268,000 tons for its mill and landfills. (Most gas and coal power plants are over 1 million tons, with Xcel’s Comanche coal-fired complex in Pueblo at nearly 4.5 million tons, by far the largest in the state.)
Conservation groups say they also pushed air quality regulators to lock in their “best available technology” audits at least every five years, and to stick to proven 5% reductions in the exempt group rather than give them partial credit for promising but unproven future technology. Some cement companies, for example, are researching carbon reduction and capture by reducing the amount of cement needed in concrete mixes, or by capturing carbon from the kiln process underground or in the cement itself.
Those strategies have potential for major reductions, conservationists say, but with Colorado’s 2030 cuts of 50% beginning to loom large, regulators can’t give credit for vague future technology.
“We simply can’t afford to wait and put off reductions that are available right now in the near term,” said Katie Schneer, a fellow who monitors Colorado policy for the Environmental Defense Fund. “And the commissioners agreed with us that we should not be deferring.”