Cap-and-Trade Program: Green Hydrogen Credit Program.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency responsible for monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to adopt greenhouse gas emissions limits and emissions reduction measures by regulation to achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions in furtherance of achieving the statewide greenhouse gas emissions limit. The act authorizes the state board to include in its regulation of emissions of greenhouse gases the use of market-based compliance mechanisms. This bill would require, on or before December 31, 2023, the state board to consider developing and implementing a Green Hydrogen Credit Program to accelerate the deployment and production of green hydrogen, as defined, at large industrial facilities and to promote the transition to a carbon-free economy. The bill would require the state board to determine whether a Green Hydrogen Credit Program would be an effective and appropriate approach to using the state's Cap-and-Trade Program to incentivize green hydrogen production. The bill would require, if the state board determines that a Green Hydrogen Credit Program would be effective and appropriate, the state board to develop a Green Hydrogen Credit Program and review and revise its existing regulations to provide industrial facilities that produce green hydrogen with an additional greenhouse gas allowance of 10 tons for every metric ton of green hydrogen produced during a compliance period, as defined, and develop and adopt any new regulations the state board deems necessary to implement the program. The bill would authorize the state board, in developing a Green Hydrogen Credit Program, to adopt a declining greenhouse gas allowance allocation schedule through December 31, 2030.