The Massachusetts Department of Environmental Protection (MassDEP) recently released draft regulations for public comment which aim to further reduce greenhouse gas (GHG) emissions from various industry sectors in Massachusetts, including transportation, electricity generation, and natural gas pipelines. Public comments on these regulations are due by Feb. 24, and can be submitted in writing to MassDEP or orally at hearings MassDEP will be holding throughout the state.

Background

These regulations are the latest effort to reduce GHG emissions in Massachusetts, which started with the 2008 enactment of the Global Warming Solutions Act, M.G.L. chapter 21N, (GWSA). That statute mandated an 80 percent reduction (relative to a 1990 baseline) in statewide GHG emissions by 2050. In addition, the statute mandated that MassDEP set an interim GHG emissions reduction target between 10 percent and 25 percent for 2020 from the 1990 baseline. MassDEP elected to adopt the higher end of that range and set the GHG emissions reduction target for 2020 at 25 percent below the 1990 baseline.

The GWSA also required MassDEP to adopt “regulations establishing a desired level of declining annual aggregate emission limits for sources or categories of sources that emit greenhouse gas emissions.” M.G.L. c. 21N, § 3(d). MassDEP concluded that existing regulations limiting sulfur hexafluoride leaks, a state low emissions vehicle (LEV) incentive program, and Massachusetts’ ongoing participation in the regional CO2 cap and trade program (known as the Regional Greenhouse Gas Initiative or RGGI) satisfied this mandate.

A citizens group sued MassDEP to force the promulgation of additional regulations to ensure that the 25 percent GHG emissions reduction target was met by 2020. The Massachusetts Supreme Judicial Court last year ruled in favor of the citizens group, holding that MassDEP was obligated by the statute to promulgate regulations that “address multiple sources or categories of sources of greenhouse gas emissions, impose a limit on emissions that may be released, limit the aggregate emissions released from each group of regulated sources or category of sources, set emission limits for each year, and set limits that decline on an annual basis.” Kain v. DEP, 474 Mass. 278, 281-82 (2016).

Following this ruling, Governor Baker issued Executive Order 569 (“Establishing an Integrated Climate Change Strategy for the Commonwealth”), which established a number of policy directives regarding climate change mitigation and adaptation. One of those directives set a schedule for MassDEP to issue GHG emission reduction regulations, specifically draft regulations, by Dec. 16, 2016, and final regulations by Aug. 21, 2017. Keeping to that schedule, MassDEP held pre-proposal stakeholder meetings this past fall and then released draft regulations last month.

Regulatory Details

In drafting the GHG emissions reduction regulations to conform with the GWSA and the Kain decision, MassDEP concluded the regulations must: (1) be mass-based limits; (2) decline annually; (3) limit the aggregate emission levels of existing and new sources within a category; (4) be enforceable; and (5) ensure reductions within Massachusetts. MassDEP also elected to include a margin of error to ensure the 25 percent reduction target was met by 2020. As of 2013, GHG emissions within Massachusetts had been reduced by 19.7 percent, leaving a 5.3 percent gap to close in order to meet the 25 percent reduction target. MassDEP estimates that its draft regulations will reduce GHG emissions by another 7.2 percent, thereby providing some margin of error for achieving the 2020 reduction target.

The regulations target the following areas for emissions reductions: (1) CO2 emissions from vehicles, (2) CO2 emissions from other transportation sources, (3) methane emissions from natural gas distribution systems, (4) CO2 emissions from electricity generation, (5) sulfur hexafluoride emissions from utility switchgear, and (6) clean energy standard for retail electricity generators. Of these, nearly all of the proposed 7.2 percent GHG emissions reductions are concentrated in the transportation and electricity generation industries.

MassDEP calculates that, unlike other industry sectors, GHG emissions from the transportation sector in Massachusetts have increased since 1990 and now represent the largest share (40.8 percent) of the statewide GHG emissions. The draft regulations propose a 3.1 percent reduction by 2020, nearly all of which MassDEP forecasts will be achieved through its existing regulations (310 CMR 7.40) promoting the use of Low Emissions Vehicles (LEVs). The draft regulations (310 CMR 60.05 and 60.06) also propose reducing CO2 emissions from mobile equipment and buildings used by state transportation agencies, but MassDEP openly acknowledges that the anticipated reduction (0.01 percent) are more symbolic than meaningful.

In contrast to the transportation sector, the electricity generation sector in Massachusetts reduced GHG emissions by 42 percent from 1990 to 2013, and now accounts for 21.5 percent of the statewide GHG emissions. The draft regulations propose a further reduction of 4.0 percent. MassDEP justifies this reduction on the fact that, as other sectors like transportation and commercial and residential buildings increasingly rely on electricity over petroleum, it becomes more important to reduce GHG emissions from electricity. The draft regulations propose doing so by imposing an annually increasing requirement for power from clean energy sources (310 CMR 7.75) and other GHG emissions reduction measures including a credit trading program (310 CMR 7.74).

Citing the fact that the global warming potential of sulfur hexafluoride is 23,900 times that of CO2, MassDEP is proposing to create a declining annual, aggregate limit for the permissible sulfur hexafluoride emissions from gas-insulated switchgear used by large utilities (specifically, Eversource and National Grid). This limit is stated as a proposed leak rate, which the draft regulations (310 CMR 7.72) would decrease from 3.5 percent in 2015 to 1.0 percent by 2020.

Finally, the draft regulations (310 CMR 7.73) propose to reduce methane emissions (which have 25 times the global warming potential of CO2) from natural gas distribution systems in Massachusetts. The proposed regulations piggyback on an existing natural gas leak detection and elimination program and set declining annual methane emission limits from main and service lines owned by gas companies that have previously approved plans to replace leak-prone gas infrastructure.

Additional Interim Reduction Limits?

During the last legislative session, the Massachusetts Senate unanimously passed S. 2092, which would have added interim GHG emission reduction limits for 2030 and 2040 (respectively, 35-45 percent and 55-65 percent from the 1990 baseline). The House did not take up the Senate bill, allowing it to expire at the end of the legislative session. Comments made during a recent legislative hearing on MassDEP’s draft GHG emissions reduction regulations indicate that the Senate bill may be re-filed in the next legislative session with the intention of forcing the House (and Governor Baker) to respond to the Senate’s proposal for additional interim GHG emission reduction standards.

Conclusion

Given the relatively narrow focus of MassDEP’s proposed regulations, their near-term impact will be limited primarily to the transportation, gas distribution, and electricity generation sectors. Beyond 2020, however, substantially larger statewide GHG emissions reductions may be achieved and there is legislative interest in setting interim reduction targets that could mandate that most of the remaining GHG emissions reductions are achieved in the next two decades. From that perspective, these regulations represent the opening salvo of what will likely be a significant regulatory effort to further reduce statewide GHG emissions in the next several decades – an effort that will likely proceed regardless of how federal climate policy evolves in the next few years.