Colorado’s Air Quality Control Commission late Friday approved new limits on smokestack pollution from 18 large corporations, a vote immediately denounced by 44 local governments and environmental groups who called it a cave-in to industry and a gutting of environmental justice laws passed in 2021.
The rules call for cuts of up to 20% of the greenhouse gas emissions of such major companies as Suncor, Molson Coors and Leprino Foods, and new efforts to trim industrial “co-pollutants” emitted alongside greenhouse gases but which hit surrounding neighborhoods, such as nitrogen oxide, sulfur dioxide and components of ozone.
The system settled on by the Air Pollution Control Division after months of negotiations allows companies who say it’s too expensive to achieve the cuts to buy pollution “credits” from other companies that have successfully cut emissions. Failing that, they can pay into a fund run by the state that would finance other pollution reductions in impacted communities.
Those provisions allow some of the state’s richest corporations to “pay to play,” opponents said, and subvert demands made in House Bill 1266, known as the 2021 Environmental Justice Act, to target pollution in disproportionately impacted neighborhoods with low incomes, high minority representation, and a long history of living with toxic air.
The environmental coalition may sue the AQCC over the new rules, or push for new legislation directing state officials to fulfill the requirements of House Bill 1266. A group of 16 state senators and representatives wrote the air commission before the vote warning that the proposed rules failed to carry out the intent of the legislature.
“We’re deeply disappointed. We saw the draft rule get progressively eroded from the intent of the Environmental Justice Act more than two years ago to what we saw passed over the weekend,” said Boulder County’s climate and health strategist Collin Tomb, speaking as a member of a coalition of 44 local governments working on the air pollution rule that includes industry-heavy Denver, Adams County and Commerce City.
“The state increasingly leaned the draft rule in favor of these powerful companies in spite of community concerns,” Tomb said. “Some of these companies are reporting record profits, which undermines their claims that pollution controls are too costly.”
Environmental advocates said they were overwhelmed by the legal and corporate resources of the 18 companies and the Colorado Chamber of Commerce, even as state officials had touted giving pro bono independent legal help to nonprofit groups who wanted official party standing in the rulemaking.
“It’s incredibly disempowering to the communities to invite them to the process and then have the results reflect virtually none of their input,” Tomb said. “When one side is just so much more powerful than the other, the role of the state should be to lean toward protecting the community, as the Environmental Justice Act clearly stated.”
The Air Quality Control Commission “continues to be a place where our good efforts go to die,” said Ean Tafoya, Colorado director of GreenLatinos and a member of a broad environmental and neighborhood justice coalition working on the industrial pollution rules.
“It’s personal for me,” said Tafoya, who has family living near the often-fined Suncor refinery and near large meatpackers in northeastern Colorado that are part of the list of 18. “It’s an unjust trade and pay-to-play system. It’s riddled with loopholes, to allow the worst offenders to not make reductions in co-pollutants. We’re tired of this balance of cost and peoples’ health. We can do both.”
Top state officials praised the new industrial rules as the legitimate fulfillment of the 2021 law, saying they would make real differences in the most pollution-impacted communities.
A company may buy a pollution credit from a company in a different neighborhood, said Colorado Energy Office director Will Toor, but they can only buy them from the 18 companies on the list the new regulations target. That means pollution will have been reduced in another impacted community. “You’re not buying credits from California,” he said.
Moreover, the separate fund companies may pay into as a last resort to offset emissions will also be spent for greenhouse gas and pollution controls in impacted neighborhoods, Toor said.
“We’re really proud of the rule that was just adopted. I think it’s really a first of its kind state rule to reduce greenhouse gas pollution,” Toor said. “The proposal that the air commission adopted is really very balanced,” between making real cuts and not putting companies out of business, he said.
A year of meetings with nonprofits and community groups, as well as the pro bono legal help from the state, did shape the final outcome, said Michael Ogletree, director of the Air Pollution Control Division of the health department. The groups’ concerns led to more stringent rules on how much the list of companies have to cut their pollution before they can start generating credits they can trade with others, Ogletree offered as an example.
“These rules are complex. And so having them at the table is helpful,” Ogletree said.
The new rules take on a third-tier of major industrial pollution sources in Colorado, as part of the state’s greenhouse gas reduction targets of 50% cuts by 2030, and net-zero emissions by 2050. Power utilities, the largest polluters by far, are on their way to 80% reductions of their emissions by switching to clean energy sources. A group of four next-tier polluters, including three cement plants and a steel plant that each face stiff international competition on prices, were targeted in a separate 2021 commission rulemaking.
The current group of 18 companies emit hundreds of thousands of tons of carbon dioxide each year that contribute to global climate change, and also send out co-pollutants that harm immediate neighborhoods that include nitrogen oxide, sulfur dioxide, volatile organic compounds and other components of toxic ozone.
The 2021 legislation directed the commission to approve rules making 20% cuts in greenhouse gases within the group from a 2015 emissions benchmark, and to prioritize cutting those co-pollutants to protect surrounding communities.
The industries made detailed arguments and counterproposals to the state staff’s draft rules, saying it would cost them too much to make all the pollution cuts. Some companies said they would shut down or cut back production instead, threatening jobs and the tax base.
During lengthy testimony in front of the commission last week, the Colorado Chamber of Commerce spoke for all the 18 targeted companies and said the proposed emissions cuts went beyond the requirements of the 2021 law. The chamber also said, “there is no clear pathway to compliance for all facilities, facilities may not have available on-site reductions . . . without another compliance pathway, the only certain option will be to reduce production.”
The companies wanted more flexible trading options and an alternate fund they could pay into if there were not enough pollution credits to purchase in a trading market. Denver-based Leprino Foods, the largest maker of mozzarella cheese in the world, proposed an auction for the pollution credit and trading system that was eventually adopted by the AQCC. Leprino has manufacturing plants in Greeley and Fort Morgan.
“The final product is a lot better than the rule as proposed,” said Doug Benevento, a Holland & Hart partner representing the chamber in the rulemaking. The details of the proposed alternative fund will come from the state Air Pollution Control Division staff in coming months, Benevento said. “We still think there is work that needs to be done in order to ensure that business has the certainty they need to comply with the regulations.”
Benevento rejected the “pay-to-play” view of the fund, and said companies would be using money from the fund to make real changes that would result in greenhouse gas reductions for Colorado.
Opponents of the state’s credits system say there’s no real verification that companies selling the credits have cut pollution, and that it doesn’t help neighbors of longtime offenders like Suncor, for example.
“A lot of people seem to have ignored that it’s part of the Environmental Justice Act,” said Ian Coghill, senior attorney with Earthjustice. Giving priority to cutting locally toxic pollutants for disproportionately impacted communities in fact “was the whole point of the act,” Coghill said.
Earthjustice and others are suing the air commission over a set of May rules controlling modeling and monitoring pollution in those affected communities, saying what the commission passed fails the intent of the legislature. That suit is in state court, over alleged administrative procedure violations. Legislators could also clarify their intent with new laws, he said.