Cal/EPA’s Air Resources Board (ARB) is seeking comments on draft regulations for a greenhouse gas (GHG) emissions trading program. The draft regulations would target approximately 600 major sources of GHG—those emitting 25,000 tons or more a year at 360 businesses and government facilities. They would apply to emissions of carbon dioxide, methane, sulfur hexafluoride, nitrous oxides, hydrofluorocarbons, perfluorocarbons, and nitrogen triflouride. Types of facilities included are (i) electricity generators and importers; (ii) cement plants; (iii) cogeneration facilities; (iv) hydrogen plants; (v) petroleum refiners; (vi) manufacturing plants; and (vii) wholesalers of gasoline, distillate, propane, and natural gas.

Power generators and importers and industrial facilities would be subject to a first phase of trading in 2012. The program would be expanded by 2015 to address emissions from transportation fuels and the delivery of natural gas and propane. The draft regulations would cap emissions at 2012 levels based on the best estimate of actual emissions, decline 2 percent annually through 2014, and then drop 3 percent a year through 2020. The draft regulations would distribute 90 percent of emissions allowances for free. The regulated facilities would have to meet their remaining reduction obligations by cutting emissions, purchasing allocations through one of four annual auctions or with qualified offsets. The draft regulations are open for comment for 45 days after November 1, 2010.