SB 1075: Hydrogen: green hydrogen: emissions of greenhouse gases.
- Session Year: 2021-2022
- House: Senate
- Latest Version Date: 2022-09-16
(1)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(2)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(3)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(1)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(2)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(3)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(1)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)(2)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)(3)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury under the administration of the I-Bank. The bill would authorize the moneys in the fund, upon appropriation by the Legislature, to be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale. The bill would require the I-Bank to prepare, and the I-Bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the I-Bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, which is defined as an electrical generating facility that meets the definition of renewable electrical generation facility subject to certain conditions, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules. The bill would include a facility that uses renewable hydrogen, as defined, meeting certain requirements, including a requirement that sellers and purchasers of renewable hydrogen comply with a system for tracking and verifying the use of renewable hydrogen, as a renewable electrical generation facility for purposes of the California Renewables Portfolio Standard Program.This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.Under existing law, a violation of the Public Utilities Act is a crime.Because the requirement that sellers and purchasers of renewable hydrogen comply with a system for tracking and verifying the use of renewable hydrogen would be codified in the Public Utilities Act, a violation of which would be a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury under the administration of the I-Bank. The bill would authorize the moneys in the fund, upon appropriation by the Legislature, to be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale. The bill would require the I-Bank to prepare, and the I-Bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the I-Bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, which is defined as an electrical generating facility that meets the definition of renewable electrical generation facility subject to certain conditions, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.
This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules. The bill would include a facility that uses renewable hydrogen, as defined under these recommendations, defined, meeting certain requirements, including a requirement that sellers and purchasers of renewable hydrogen comply with a system for tracking and verifying the use of renewable hydrogen, as a renewable electrical generation facility for purposes of the California Renewables Portfolio Standard Program.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
Under existing law, a violation of the Public Utilities Act is a crime.
Because the requirement that sellers and purchasers of renewable hydrogen comply with a system for tracking and verifying the use of renewable hydrogen would be codified in the Public Utilities Act, a violation of which would be a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury under the administration of the I-Bank. The bill would authorize the moneys in the fund, upon appropriation by the Legislature, to be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale. The bill would require the I-Bank to prepare, and the I-Bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the I-Bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, which is defined as an electrical generating facility that meets the definition of renewable electrical generation facility subject to certain conditions, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.
This bill would require the Energy Commission to consult with the Public Utilities Commission and the state board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a renewable electrical generation facility.This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules. The bill would include a facility that uses renewable hydrogen, as defined under these recommendations, as a renewable electrical generation facility for purposes of the California Renewables Portfolio Standard Program.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury, and make Treasury under the administration of the I-Bank. The bill would authorize the moneys in the fund available for expenditure, fund, upon appropriation by the Legislature. The bill would require the I-Bank to administer the fund and would authorize the I-Bank to provide grants to public, private, and nonprofit businesses and entities for the support of projects in California that demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen, as specified. Legislature, to be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale. The bill would require the I-Bank to prepare, and the I-Bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the I-Bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, which is defined as an electrical generating facility that meets the definition of renewable electrical generation facility subject to certain conditions, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.
This bill would require the Energy Commission to consult with the Public Utilities Commission and the state board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a renewable electrical generation facility.
This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury, and make the moneys in the fund available for expenditure, upon appropriation by the Legislature. The bill would require the bank I-Bank to administer the fund and would authorize the bank I-Bank to provide grants to public, private, and nonprofit businesses and entities for the support of projects in California that demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen, as specified. The bill would require the bank I-Bank to prepare, and the bank I-Bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the bank, I-Bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. The act requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years.
This bill would require the state board, by December 31, 2023, as a part of the scoping plan and the states goal for carbon neutrality, to identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals of the act and the states other climate goals. The bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making these evaluations, this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, as defined, which is defined as an electrical generating facility that meets the definition of renewable electrical generation facility subject to certain conditions, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.
This bill would require the Energy Commission to consult with the Public Utilities Commission and the state board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a renewable electrical generation facility.
This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules. The bill would revise the definition of an eligible renewable energy resource for the purposes of the California Renewables Portfolio Standard Program to include an electrical generation facility that uses hydrogen that would qualify as renewable hydrogen under these recommendations.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury, and make the moneys in the fund available for expenditure, upon appropriation by the Legislature. The bill would require the bank to administer the fund and would authorize the bank to provide grants to public, private, and nonprofit businesses and entities for the support of projects in California that demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen, as specified. The bill would require the bank to prepare, and the bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. The act requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years.
This bill would require the state board, by December 31, 2023, as a part of the scoping plan and the states goal for carbon neutrality, to identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals of the act and the states other climate goals. The bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making these evaluations, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, as defined, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.
This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules. The bill would revise the definition of an eligible renewable energy resource for the purposes of the California Renewables Portfolio Standard Program to include an electrical generation facility that uses hydrogen that would qualify as renewable hydrogen under these recommendations.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
(1)The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governors Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury, and make the moneys in the fund available for expenditure, upon appropriation by the Legislature. The bill would require the bank to administer the fund and would authorize the bank to provide grants to public, private, and nonprofit businesses and entities for the support of projects in California that demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen, as specified. The bill would require the bank to prepare, and the bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2)The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. The act requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years.
This bill would require the state board, by December 31, 2023, as a part of the scoping plan and the states goal for carbon neutrality, to identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals of the act and the states other climate goals. The bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state boards internet website by June 1, 2024, that includes specified information relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making these evaluations, to consult with the California Workforce Development Board and labor and workforce organizations.
(3)Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4)Existing law requires the PUC, state board, and Energy Commission to consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, as defined, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the program.
This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules. The bill would revise the definition of an eligible renewable energy resource for the purposes of the California Renewables Portfolio Standard Program to include an electrical generation facility that uses hydrogen that would qualify as renewable hydrogen under these recommendations.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to (A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entitys jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale may help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
SEC. 2.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations regarding the use of hydrogen, and specifically regarding the use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations may include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies, consistent with the states climate, clean energy, and clean air requirements, supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases and short-lived climate pollutants through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(6)An analysis of the potential for opportunities to integrate hydrogen, including green hydrogen, production and application with drinking water supply treatment needs, particularly for advanced treatment water supplies such as desalination, potable reuse, and salt and contaminant removal projects.
(7)Policy recommendations for regulatory and permitting processes associated with transmission and distribution of hydrogen, including green hydrogen, from production sites to end uses.
(8)An analysis of the life-cycle greenhouse gas emissions from various forms of hydrogen, including green hydrogen, production.
(9)An analysis of air pollution and other environmental impacts from hydrogen, including green hydrogen, distribution and end uses.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 3.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 4.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale may help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
SEC. 2.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations regarding the use of hydrogen, and specifically regarding the use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations may include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies, consistent with the states climate, clean energy, and clean air requirements, supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases and short-lived climate pollutants through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(6)An analysis of the potential for opportunities to integrate hydrogen, including green hydrogen, production and application with drinking water supply treatment needs, particularly for advanced treatment water supplies such as desalination, potable reuse, and salt and contaminant removal projects.
(7)Policy recommendations for regulatory and permitting processes associated with transmission and distribution of hydrogen, including green hydrogen, from production sites to end uses.
(8)An analysis of the life-cycle greenhouse gas emissions from various forms of hydrogen, including green hydrogen, production.
(9)An analysis of air pollution and other environmental impacts from hydrogen, including green hydrogen, distribution and end uses.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 3.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 4.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale may help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.(19)The United States Department of Energy has also called for clean hydrogen hubs to include historically marginalized and disadvantaged communities in the hub decisionmaking process and benefits. California is a national leader in enacting energy policies that enable energy and environmental justice.(20)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for regional and statewide investments in renewable energy focused clean hydrogen through a California-based clean hydrogen hub. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:(a)Clean hydrogen means hydrogen produced from eligible renewable energy resources, as defined in Section 399.12 of the Public Utilities Code, and otherwise consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code, or as that standard is revised or supplemented by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.63048.301.(a)(1)The California Clean Hydrogen Hub Fund is hereby created in the State Treasury for the purpose of implementing the objectives and provisions of this article. The fund shall be administered by the bank.(2)The fund shall be separate from any other fund or account created under this division.(3)Moneys in the fund, including any moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature, and may be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub pursuant to Section 16161a of Title 42 of the United States Code, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale.(b)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.(c)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 40311) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.(d)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.(e)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.(2)The report shall be posted on the banks internet website.(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do any of the following:(A)Maximize the use in this state of renewable feedstocks or eligible renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.(B)Help achieve economies of scale and reduce the cost of clean hydrogen production in this state from renewable feedstocks or eligible renewable energy resources and zero-carbon resources.(C)Advance state greenhouse gas emission reduction goals.(D)Maximize socioeconomic, workforce, equity, air quality, and health benefits.(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, national laboratories, and nonprofit organizations.(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, the University of California, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.SEC. 3.SEC. 2.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations regarding the use of hydrogen, and specifically regarding the use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations may include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies, consistent with the states climate, clean energy, and clean air requirements, supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases and short-lived climate pollutants through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(6)An analysis of the potential for opportunities to integrate hydrogen, including green hydrogen, production and application with drinking water supply treatment needs, particularly for advanced treatment water supplies such as desalination, potable reuse, and salt and contaminant removal projects.
(7)Policy recommendations for regulatory and permitting processes associated with transmission and distribution of hydrogen, including green hydrogen, from production sites to end uses.
(8)An analysis of the life-cycle greenhouse gas emissions from various forms of hydrogen, including green hydrogen, production.
(9)An analysis of air pollution and other environmental impacts from hydrogen, including green hydrogen, distribution and end uses.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 4.SEC. 3.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 5.SEC. 4.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale would may help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)The United States Department of Energy has also called for clean hydrogen hubs to include historically marginalized and disadvantaged communities in the hub decisionmaking process and benefits. California is a national leader in enacting energy policies that enable energy and environmental justice.
(20)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for regional and statewide investments in renewable energy focused clean hydrogen through a California-based clean hydrogen hub. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from eligible renewable energy resources, as defined in Section 399.12 of the Public Utilities Code, and otherwise consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code, or as that standard is revised or supplemented by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)The California Clean Hydrogen Hub Fund is hereby created in the State Treasury for the purpose of implementing the objectives and provisions of this article. The fund shall be administered by the bank.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including any moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature, and may be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub pursuant to Section 16161a of Title 42 of the United States Code, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale.
(b)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(c)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 40311) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(d)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(e)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do any of the following:
(A)Maximize the use in this state of renewable feedstocks or eligible renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production in this state from renewable feedstocks or eligible renewable energy resources and zero-carbon resources.
(C)Advance state greenhouse gas emission reduction goals.
(D)Maximize socioeconomic, workforce, equity, air quality, and health benefits.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, national laboratories, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, the University of California, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and regarding the use of hydrogen, and specifically to accelerate the production and regarding the use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall may include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies strategies, consistent with the states climate, clean energy, and clean air requirements, supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases and short-lived climate pollutants through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 4.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.SEC. 5.SEC. 4.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 6.Section 25741 of the Public Resources Code is amended to read:25741.As used in this chapter, the following terms have the following meaning:(a)Renewable electrical generation facility means a facility that meets all of the following criteria:(1)(A)The facility uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, tidal current, or renewable hydrogen, and any additions or enhancements to the facility using that technology.(B)A facility using renewable hydrogen is renewable electrical generation facility if all of the following apply:(i)If the facility uses a combustion process to generate electricity, the combustion process are appropriately controlled and regulated to avoid increased emission of oxides of nitrogen or other air pollutants as compared to emissions resulting from the combustion of methane.(ii)The procurement of the renewable hydrogen produced by electrolysis does not increase the emissions of greenhouse gases in the transmission grid under the control of the Western Electricity Coordinating Council of the North American Electric Reliability Corporation (WECC) or result in resource shuffling.(iii)All environmental attributes associated with the feedstock and energy input used to produce the renewable hydrogen, including any renewable energy credits associated with the electricity, if any, are retired.(2)The facility satisfies one of the following requirements:(A)The facility is located in the state or near the border of the state with the first point of connection to the transmission network of a balancing authority area primarily located within the state. For purposes of this subparagraph, balancing authority area has the same meaning as defined in Section 399.12 of the Public Utilities Code.(B)The facility has its first point of interconnection to the transmission network outside the state, within the WECC service area, and satisfies all of the following requirements:(i)It commences initial commercial operation after January 1, 2005.(ii)It will not cause or contribute to any violation of a California environmental quality standard or requirement.(iii)It participates in the accounting system to verify compliance with the renewables portfolio standard once established by the commission pursuant to subdivision (b) of Section 399.25 of the Public Utilities Code.(C)The facility meets the requirements of clauses (ii) and (iii) in subparagraph (B), but does not meet the requirements of clause (i) of subparagraph (B) because it commenced initial operation prior to January 1, 2005, if the facility satisfies either of the following requirements:(i)The electricity is from incremental generation resulting from expansion or repowering of the facility.(ii)Electricity generated by the facility was procured by a retail seller or local publicly owned electric utility as of January 1, 2010.(3)If the facility is outside the United States, it is developed and operated in a manner that is as protective of the environment as a similar facility located in the state.(4)If eligibility of the facility is based on the use of landfill gas, digester gas, or another renewable fuel, including renewable hydrogen, delivered to the facility through a common carrier pipeline, the transaction for the procurement of that fuel, including the source of the fuel and delivery method, satisfies the requirements of Section 399.12.6 of the Public Utilities Code and is verified pursuant to the accounting system established by the commission pursuant to 399.25 of the Public Utilities Code, or a comparable system, as determined by the commission.(b)Municipal solid waste conversion, as used in subdivision (a), means a technology that uses a noncombustion thermal process to convert solid waste to a clean-burning fuel for the purpose of generating electricity, and that meets all of the following criteria:(1)The technology does not use air or oxygen in the conversion process, except ambient air to maintain temperature control.(2)The technology produces no discharges of air contaminants or emissions, including greenhouse gases as defined in Section 38505 of the Health and Safety Code.(3)The technology produces no discharges to surface or groundwaters of the state.(4)The technology produces no hazardous wastes.(5)To the maximum extent feasible, the technology removes all recyclable materials and marketable green waste compostable materials from the solid waste stream prior to the conversion process and the owner or operator of the facility certifies that those materials will be recycled or composted.(6)The facility at which the technology is used is in compliance with all applicable laws, regulations, and ordinances.(7)The technology meets any other conditions established by the commission.(8)The facility certifies that any local agency sending solid waste to the facility diverted at least 30 percent of all solid waste it collects through solid waste reduction, recycling, and composting. For purposes of this paragraph, local agency means any city, county, or special district, or subdivision thereof, which is authorized to provide solid waste handling services.(c)Renewable energy public goods charge means that portion of the nonbypassable system benefits charge required to be collected to fund renewable energy pursuant to the Reliable Electric Service Investments Act (Article 15 (commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).(d)Renewable hydrogen means hydrogen that is produced by a process that meets all of the following:(1)The process uses either of the following energy input:(A)Electricity that is eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).(B)Energy, other than electricity, that is produced from sources described in paragraph (1) of subdivision (a).(2)The process uses material feedstock that is either water or a material described in paragraph (1) of subdivision (a).(3)(A)For a process that uses landfill gas or digester gas to generate energy input described in subparagraph (B) of paragraph (1) or to provide feedstock, the procurement of that gas is consistent with Section 399.12.6 of the Public Utilities Code.(B)For a process that uses biomass to generate energy input described in subparagraph (B) of paragraph (1) or to provide feedstock, the production of the energy or feedstock is by biomass conversion, as defined in Section 40106, and is procured consistent with Section 399.20.3 of the Public Utilities Code.(e)Report means the report entitled Investing in Renewable Electricity Generation in California (June 2001, Publication Number P500-00-022) submitted to the Governor and the Legislature by the commission.(f)Retail seller means a retail seller as defined in Section 399.12 of the Public Utilities Code.SEC. 7.Section 399.12.6 of the Public Utilities Code is amended to read:399.12.6.(a)(1)Any procurement of biomethane delivered through a common carrier pipeline under a contract executed by a retail seller or local publicly owned electric utility and reported to the Energy Commission prior to March 29, 2012, and otherwise eligible under the rules in place as of the date of contract execution shall count toward the procurement requirements established in this article, under the rules in place at the time the contract was executed, including the Fourth Edition of the Energy Commissions Renewables Portfolio Standard Eligibility Guidebook, provided that those rules shall apply only to sources that are producing biomethane and injecting it into a common carrier pipeline on or before April 1, 2014.(2)The eligibility requirements of subdivision (b) shall apply beginning March 29, 2012, to any quantities of biomethane associated with any of the following:(A)An extension of the term of the original contract.(B)Any quantity of biomethane that exceeds the quantities of biomethane specified in the original contract.(C)Any optional quantities of biomethane that can be exercised at the discretion of the buyer.(D)Any change in the source or sources of biomethane identified in the original contract or the original application for certification submitted to the Energy Commission.(E)Any quantity of biomethane from a source not producing and capturing biomethane and injecting it into a common carrier pipeline on or before April 1, 2014.(F)The conditions of this paragraph shall apply beginning March 29, 2012.(b)For contracts initially executed on or after March 29, 2012, or for quantities of biomethane or renewable hydrogen associated with contract amendments executed on or after March 29, 2012, the use of biomethane or renewable hydrogen by a generating facility shall not qualify as an eligible renewable energy resource unless it satisfies all applicable requirements established by the Energy Commission and meets any of the following requirements:(1)The biomethane or renewable hydrogen is used by an onsite generating facility.(2)The biomethane or renewable hydrogen is used by an offsite generating facility and delivered to the generating facility through a dedicated pipeline.(3)The biomethane or renewable hydrogen is delivered to a generating facility through a common carrier pipeline and meets all of the following requirements:(A)The source of biomethane or renewable hydrogen injects the biomethane or renewable hydrogen into a common carrier pipeline that physically flows within California or toward the generating facility for which the biomethane or renewable hydrogen was procured under the original contract.(B)The source of biomethane or renewable hydrogen did not inject biomethane or renewable hydrogen into a common carrier pipeline prior to March 29, 2012, or the source commenced injection of sufficient incremental quantities of biomethane after March 29, 2012, to satisfy the contract requirements.(C)The seller or purchaser of the biomethane or renewable hydrogen demonstrates that the capture and injection of biomethane or renewable hydrogen into a common carrier pipeline directly results in at least one of the following environmental benefits to California:(i)The reduction or avoidance of the emission of any criteria air pollutant in California.(ii)The reduction or avoidance of pollutants that could have an adverse impact on waters of the state.(iii)The alleviation of a local nuisance within California that is associated with the emission of odors.(c)For all electricity products generated using biomethane or renewable hydrogen that are credited toward the renewables portfolio standard procurement obligations established pursuant to this article, sufficient renewable and environmental attributes of biomethane or renewable hydrogen production and capture shall be transferred to the retail seller or local publicly owned electric utility that uses that biomethane or renewable hydrogen to ensure that there are zero net emissions associated with the production of electricity from the generating facility using the biomethane or renewable hydrogen. The provisions of this subdivision shall be applied in a manner consistent with the definition of green attributes as specified by the commission in Decision 08-08-028, Decision on Definition and Attributes of Renewable Energy Credits for Compliance with the California Renewables Portfolio Standard (August 21, 2008), as may be modified by subsequent decision of the commission.(d)All sellers and purchasers of biomethane or renewable hydrogen shall comply with a system for tracking and verifying the use of biomethane or renewable hydrogen, as established by the Energy Commission, that is equivalent to the system required by subdivision (c) of Section 399.25.(e)For contracts initially executed on or after March 29, 2012, or for quantities of biomethane or renewable hydrogen associated with contract amendments executed after March 29, 2012, the use of biomethane or renewable hydrogen shall be assigned to the appropriate portfolio content category based on the application of the criteria in subdivision (b) of Section 399.16 to the procurement of electricity by the retail seller or local publicly owned electric utility from the generating facility consuming the biomethane or renewable hydrogen.(f)A retail seller, local publicly owned electric utility, or an intermediary party to a biomethane procurement contract shall not make a marketing, regulatory, or retail claim that asserts that a biomethane procurement contract to which that entity was a party resulted, or will result, in greenhouse gas reductions related to the destruction of methane if the capture and destruction is required by law. If the capture and destruction of the biomethane is not required by law, a retail seller, local publicly owned electric utility, or an intermediary party to a biomethane procurement contract shall not make a marketing, regulatory, or retail claim that asserts that a biomethane procurement contract to which that entity was a party resulted, or will result, in greenhouse gas reductions related to the destruction of methane, unless the environmental attributes associated with the capture and destruction of the biomethane pursuant to that contract are transferred to the retail seller or publicly owned electric utility that purchased that biomethane and retired on behalf of the retail customers consuming the electricity associated with the use of that biomethane, or unless the biomethane procurement contract prohibits the source of biomethane from separately marketing the environmental attributes associated with the capture and destruction of the biomethane sold pursuant to that contract. These attributes shall be retired and may not be resold.(g)For the purposes of this section, the following definitions apply:(1)Biomethane means landfill gas or digester gas, consistent with Section 25741 of the Public Resources Code.(2)Renewable hydrogen has the same meaning as set forth in Section 25741 of the Public Resources Code.(h)If any provision of this section or the application of any provision of this section is held invalid, biomethane or renewable hydrogen delivered through a common carrier pipeline pursuant to a contract executed within 180 days of, or at any time subsequent to, the invalidation of that provision shall not qualify as an eligible renewable energy resource.SEC. 8.SEC. 5.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)The United States Department of Energy has also called for clean hydrogen hubs to include historically marginalized and disadvantaged communities in the hub decisionmaking process and benefits. California is a national leader in enacting energy policies that enable energy and environmental justice.
(20)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for regional and statewide investments in renewable energy focused clean hydrogen through a California-based clean hydrogen hub. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from eligible renewable energy resources resources, as defined in Section 399.12 of the Public Utilities Code, and otherwise consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code, or as that standard is revised or supplemented by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)The California Clean Hydrogen Hub Fund is hereby created in the State Treasury for the purpose of implementing the objectives and provisions of this article. The fund shall be administered by the bank.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including any moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature, and may be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub pursuant to Section 16161a of Title 42 of the United States Code, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale.
(b)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(c)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 40311) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(d)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(e)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do any of the following:
(A)Maximize the use in this state of renewable feedstocks or eligible renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production in this state from renewable feedstocks or eligible renewable energy resources and zero-carbon resources.
(C)Advance state greenhouse gas emission reduction goals.
(D)Maximize socioeconomic, workforce, equity, air quality, and health benefits.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, national laboratories, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, the University of California, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 4.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 5.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 6.Section 25741 of the Public Resources Code is amended to read:25741.As used in this chapter, the following terms have the following meaning:
(a)Renewable electrical generation facility means a facility that meets all of the following criteria:
(1)(A)The facility uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, tidal current, or renewable hydrogen, as defined pursuant to Section 39619.9 of the Health and Safety Code, and any additions or enhancements to the facility using that technology.
(B)A facility using renewable hydrogen is renewable electrical generation facility if all of the following apply:
(i)If the facility uses a combustion process to generate electricity, the combustion process are appropriately controlled and regulated to avoid increased emission of oxides of nitrogen or other air pollutants as compared to emissions resulting from the combustion of methane.
(ii)The procurement of the renewable hydrogen produced by electrolysis does not increase the emissions of greenhouse gases in the transmission grid under the control of the Western Electricity Coordinating Council of the North American Electric Reliability Corporation (WECC) or result in resource shuffling.
(iii)All environmental attributes associated with the feedstock and energy input used to produce the renewable hydrogen, including any renewable energy credits associated with the electricity, if any, are retired.
(2)The facility satisfies one of the following requirements:
(A)The facility is located in the state or near the border of the state with the first point of connection to the transmission network of a balancing authority area primarily located within the state. For purposes of this subparagraph, balancing authority area has the same meaning as defined in Section 399.12 of the Public Utilities Code.
(B)The facility has its first point of interconnection to the transmission network outside the state, within the Western Electricity Coordinating Council (WECC) WECC service area, and satisfies all of the following requirements:
(i)It commences initial commercial operation after January 1, 2005.
(ii)It will not cause or contribute to any violation of a California environmental quality standard or requirement.
(iii)It participates in the accounting system to verify compliance with the renewables portfolio standard once established by the commission pursuant to subdivision (b) of Section 399.25 of the Public Utilities Code.
(C)The facility meets the requirements of clauses (ii) and (iii) in subparagraph (B), but does not meet the requirements of clause (i) of subparagraph (B) because it commenced initial operation prior to January 1, 2005, if the facility satisfies either of the following requirements:
(i)The electricity is from incremental generation resulting from expansion or repowering of the facility.
(ii)Electricity generated by the facility was procured by a retail seller or local publicly owned electric utility as of January 1, 2010.
(3)If the facility is outside the United States, it is developed and operated in a manner that is as protective of the environment as a similar facility located in the state.
(4)If eligibility of the facility is based on the use of landfill gas, digester gas, or another renewable fuel fuel, including renewable hydrogen, delivered to the facility through a common carrier pipeline, the transaction for the procurement of that fuel, including the source of the fuel and delivery method, satisfies the requirements of Section 399.12.6 of the Public Utilities Code and is verified pursuant to the accounting system established by the commission pursuant to 399.25 of the Public Utilities Code, or a comparable system, as determined by the commission.
(b)Municipal solid waste conversion, as used in subdivision (a), means a technology that uses a noncombustion thermal process to convert solid waste to a clean-burning fuel for the purpose of generating electricity, and that meets all of the following criteria:
(1)The technology does not use air or oxygen in the conversion process, except ambient air to maintain temperature control.
(2)The technology produces no discharges of air contaminants or emissions, including greenhouse gases as defined in Section 38505 of the Health and Safety Code.
(3)The technology produces no discharges to surface or groundwaters of the state.
(4)The technology produces no hazardous wastes.
(5)To the maximum extent feasible, the technology removes all recyclable materials and marketable green waste compostable materials from the solid waste stream prior to the conversion process and the owner or operator of the facility certifies that those materials will be recycled or composted.
(6)The facility at which the technology is used is in compliance with all applicable laws, regulations, and ordinances.
(7)The technology meets any other conditions established by the commission.
(8)The facility certifies that any local agency sending solid waste to the facility diverted at least 30 percent of all solid waste it collects through solid waste reduction, recycling, and composting. For purposes of this paragraph, local agency means any city, county, or special district, or subdivision thereof, which is authorized to provide solid waste handling services.
(c)Renewable energy public goods charge means that portion of the nonbypassable system benefits charge required to be collected to fund renewable energy pursuant to the Reliable Electric Service Investments Act (Article 15 (commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(d)Renewable hydrogen means hydrogen that is produced by a process that meets all of the following:
(1)The process uses either of the following energy input:
(A)Electricity that is eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(B)Energy, other than electricity, that is produced from sources described in paragraph (1) of subdivision (a).
(2)The process uses material feedstock that is either water or a material described in paragraph (1) of subdivision (a).
(3)(A)For a process that uses landfill gas or digester gas to generate energy input described in subparagraph (B) of paragraph (1) or to provide feedstock, the procurement of that gas is consistent with Section 399.12.6 of the Public Utilities Code.
(B)For a process that uses biomass to generate energy input described in subparagraph (B) of paragraph (1) or to provide feedstock, the production of the energy or feedstock is by biomass conversion, as defined in Section 40106, and is procured consistent with Section 399.20.3 of the Public Utilities Code.
(d)(e)Report means the report entitled Investing in Renewable Electricity Generation in California (June 2001, Publication Number P500-00-022) submitted to the Governor and the Legislature by the commission.
(e)(f)Retail seller means a retail seller as defined in Section 399.12 of the Public Utilities Code.
SEC. 7.Section 399.12.6 of the Public Utilities Code is amended to read:399.12.6.(a)(1)Any procurement of biomethane delivered through a common carrier pipeline under a contract executed by a retail seller or local publicly owned electric utility and reported to the Energy Commission prior to March 29, 2012, and otherwise eligible under the rules in place as of the date of contract execution shall count toward the procurement requirements established in this article, under the rules in place at the time the contract was executed, including the Fourth Edition of the Energy Commissions Renewables Portfolio Standard Eligibility Guidebook, provided that those rules shall apply only to sources that are producing biomethane and injecting it into a common carrier pipeline on or before April 1, 2014.
(2)The eligibility requirements of subdivision (b) shall apply beginning March 29, 2012, to any quantities of biomethane associated with any of the following:
(A)An extension of the term of the original contract.
(B)Any quantity of biomethane that exceeds the quantities of biomethane specified in the original contract.
(C)Any optional quantities of biomethane that can be exercised at the discretion of the buyer.
(D)Any change in the source or sources of biomethane identified in the original contract or the original application for certification submitted to the Energy Commission.
(E)Any quantity of biomethane from a source not producing and capturing biomethane and injecting it into a common carrier pipeline on or before April 1, 2014.
(F)The conditions of this paragraph shall apply beginning March 29, 2012.
(b)For contracts initially executed on or after March 29, 2012, or for quantities of biomethane or renewable hydrogen associated with contract amendments executed on or after March 29, 2012, the use of biomethane or renewable hydrogen by a generating facility shall not qualify as an eligible renewable energy resource unless it satisfies all applicable requirements established by the Energy Commission and meets any of the following requirements:
(1)The biomethane or renewable hydrogen is used by an onsite generating facility.
(2)The biomethane or renewable hydrogen is used by an offsite generating facility and delivered to the generating facility through a dedicated pipeline.
(3)The biomethane or renewable hydrogen is delivered to a generating facility through a common carrier pipeline and meets all of the following requirements:
(A)The source of biomethane or renewable hydrogen injects the biomethane or renewable hydrogen into a common carrier pipeline that physically flows within California or toward the generating facility for which the biomethane or renewable hydrogen was procured under the original contract.
(B)The source of biomethane or renewable hydrogen did not inject biomethane or renewable hydrogen into a common carrier pipeline prior to March 29, 2012, or the source commenced injection of sufficient incremental quantities of biomethane after March 29, 2012, to satisfy the contract requirements.
(C)The seller or purchaser of the biomethane or renewable hydrogen demonstrates that the capture and injection of biomethane or renewable hydrogen into a common carrier pipeline directly results in at least one of the following environmental benefits to California:
(i)The reduction or avoidance of the emission of any criteria air pollutant in California.
(ii)The reduction or avoidance of pollutants that could have an adverse impact on waters of the state.
(iii)The alleviation of a local nuisance within California that is associated with the emission of odors.
(c)For all electricity products generated using biomethane or renewable hydrogen that are credited toward the renewables portfolio standard procurement obligations established pursuant to this article, sufficient renewable and environmental attributes of biomethane or renewable hydrogen production and capture shall be transferred to the retail seller or local publicly owned electric utility that uses that biomethane or renewable hydrogen to ensure that there are zero net emissions associated with the production of electricity from the generating facility using the biomethane. biomethane or renewable hydrogen. The provisions of this subdivision shall be applied in a manner consistent with the definition of green attributes as specified by the commission in Decision 08-08-028, Decision on Definition and Attributes of Renewable Energy Credits for Compliance with the California Renewables Portfolio Standard (August 21, 2008), as may be modified by subsequent decision of the commission.
(d)All sellers and purchasers of biomethane or renewable hydrogen shall comply with a system for tracking and verifying the use of biomethane, biomethane or renewable hydrogen, as established by the Energy Commission, that is equivalent to the system required by subdivision (c) of Section 399.25.
(e)For contracts initially executed on or after March 29, 2012, or for quantities of biomethane or renewable hydrogen associated with contract amendments executed after March 29, 2012, the use of biomethane or renewable hydrogen shall be assigned to the appropriate portfolio content category based on the application of the criteria in subdivision (b) of Section 399.16 to the procurement of electricity by the retail seller or local publicly owned electric utility from the generating facility consuming the biomethane. biomethane or renewable hydrogen.
(f)A retail seller, local publicly owned electric utility, or an intermediary party to a biomethane procurement contract shall not make a marketing, regulatory, or retail claim that asserts that a biomethane procurement contract to which that entity was a party resulted, or will result, in greenhouse gas reductions related to the destruction of methane if the capture and destruction is required by law. If the capture and destruction of the biomethane is not required by law, a retail seller, local publicly owned electric utility, or an intermediary party to a biomethane procurement contract shall not make a marketing, regulatory, or retail claim that asserts that a biomethane procurement contract to which that entity was a party resulted, or will result, in greenhouse gas reductions related to the destruction of methane, unless the environmental attributes associated with the capture and destruction of the biomethane pursuant to that contract are transferred to the retail seller or publicly owned electric utility that purchased that biomethane and retired on behalf of the retail customers consuming the electricity associated with the use of that biomethane, or unless the biomethane procurement contract prohibits the source of biomethane from separately marketing the environmental attributes associated with the capture and destruction of the biomethane sold pursuant to that contract. These attributes shall be retired and may not be resold.
(g)For the purposes of this section, biomethane the following definitions apply:
(1)Biomethane means landfill gas or digester gas, consistent with Section 25741 of the Public Resources Code.
(2)Renewable hydrogen has the same meaning as set forth in Section 25741 of the Public Resources Code.
(h)If any provision of this section or the application of any provision of this section is held invalid, biomethane or renewable hydrogen delivered through a common carrier pipeline pursuant to a contract executed within 180 days of, or at any time subsequent to, the invalidation of that provision shall not qualify as an eligible renewable energy resource.
SEC. 7.SEC. 8.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)The United States Department of Energy has also called for clean hydrogen hubs to include historically marginalized and disadvantaged communities in the hub decisionmaking process and benefits. California is a national leader in enacting energy policies that enable energy and environmental justice.
(20)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for regional and statewide investments in renewable energy focused clean hydrogen through a California-based clean hydrogen hub. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from renewable energy resources consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code, or as that standard is revised by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)The California Clean Hydrogen Hub Fund is hereby created in the State Treasury for the purpose of implementing the objectives and provisions of this article. The fund shall be administered by the bank.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including any moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature, and may be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub pursuant to Section 16161a of Title 42 of the United States Code, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale.
(b)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(c)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 40311) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(d)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(e)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do any of the following:
(A)Maximize the use of renewable feedstocks or renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production from renewable feedstocks or renewable energy resources and zero-carbon resources.
(C)Advance state greenhouse gas emission reduction goals.
(D)Maximize socioeconomic, workforce, equity, and health benefits.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, national laboratories, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, the University of California, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 4.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 5.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 6.Section 25742 is added to the Public Resources Code, to read:25742.The commission shall consult with the Public Utilities Commission and the State Air Resources Board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a renewable electrical generation facility set forth in Section 25741.SEC. 7.Section 399.12 of the Public Utilities Code is amended to read:399.12.For purposes of this article, the following terms have the following meanings:(a)Conduit hydroelectric facility means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.(b)Balancing authority means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.(c)Balancing authority area means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.(d)California balancing authority is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.(e)Eligible renewable energy resource means an electrical generating facility that meets the definition of a renewable electrical generation facility in Section 25741 of the Public Resources Code, or an electrical generating facility using renewable hydrogen, as determined by the Energy Commission pursuant to Section 25742 of the Public Resources Code, subject to the following:(1)(A)An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.(B)Notwithstanding subparagraph (A), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.(C)A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a renewable electrical generation facility as defined in Section 25741 of the Public Resources Code.(D)(i)A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this subparagraph if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.(ii)Notwithstanding clause (i), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under clause (i), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.(iii)The amendments made to this subdivision by the act adding this subparagraph are intended to clarify existing law and apply from December 10, 2011.(2)(A)A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.(B)Subparagraph (A) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.(f)Procure means to acquire through ownership or contract.(g)Procurement entity means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.(h)(1)Renewable energy credit means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.(2)Renewable energy credit includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.(3)(A)Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:(i)The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.(ii)The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.(iii)The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.(B)Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (A) or (D) of paragraph (1) of subdivision (e).(C)Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (B) of paragraph (1) of subdivision (e).(D)Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contracts entered into before January 1, 2017.(i)Renewables portfolio standard means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.(j)Retail seller means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:(1)An electrical corporation, as defined in Section 218.(2)A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical corporation.(3)An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.(4)Retail seller does not include any of the following:(A)A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.(B)The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.(C)A local publicly owned electric utility.(k)WECC means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.SEC. 6.Section 25741 of the Public Resources Code is amended to read:25741.As used in this chapter, the following terms have the following meaning:
(a)Renewable electrical generation facility means a facility that meets all of the following criteria:
(1)The facility uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, or renewable hydrogen, as defined pursuant to Section 39619.9 of the Health and Safety Code, and any additions or enhancements to the facility using that technology.
(2)The facility satisfies one of the following requirements:
(A)The facility is located in the state or near the border of the state with the first point of connection to the transmission network of a balancing authority area primarily located within the state. For purposes of this subparagraph, balancing authority area has the same meaning as defined in Section 399.12 of the Public Utilities Code.
(B)The facility has its first point of interconnection to the transmission network outside the state, within the Western Electricity Coordinating Council (WECC) service area, and satisfies all of the following requirements:
(i)It commences initial commercial operation after January 1, 2005.
(ii)It will not cause or contribute to any violation of a California environmental quality standard or requirement.
(iii)It participates in the accounting system to verify compliance with the renewables portfolio standard once established by the commission pursuant to subdivision (b) of Section 399.25 of the Public Utilities Code.
(C)The facility meets the requirements of clauses (ii) and (iii) in subparagraph (B), but does not meet the requirements of clause (i) of subparagraph (B) because it commenced initial operation prior to January 1, 2005, if the facility satisfies either of the following requirements:
(i)The electricity is from incremental generation resulting from expansion or repowering of the facility.
(ii)Electricity generated by the facility was procured by a retail seller or local publicly owned electric utility as of January 1, 2010.
(3)If the facility is outside the United States, it is developed and operated in a manner that is as protective of the environment as a similar facility located in the state.
(4)If eligibility of the facility is based on the use of landfill gas, digester gas, or another renewable fuel delivered to the facility through a common carrier pipeline, the transaction for the procurement of that fuel, including the source of the fuel and delivery method, satisfies the requirements of Section 399.12.6 of the Public Utilities Code and is verified pursuant to the accounting system established by the commission pursuant to 399.25 of the Public Utilities Code, or a comparable system, as determined by the commission.
(b)Municipal solid waste conversion, as used in subdivision (a), means a technology that uses a noncombustion thermal process to convert solid waste to a clean-burning fuel for the purpose of generating electricity, and that meets all of the following criteria:
(1)The technology does not use air or oxygen in the conversion process, except ambient air to maintain temperature control.
(2)The technology produces no discharges of air contaminants or emissions, including greenhouse gases as defined in Section 38505 of the Health and Safety Code.
(3)The technology produces no discharges to surface or groundwaters of the state.
(4)The technology produces no hazardous wastes.
(5)To the maximum extent feasible, the technology removes all recyclable materials and marketable green waste compostable materials from the solid waste stream prior to the conversion process and the owner or operator of the facility certifies that those materials will be recycled or composted.
(6)The facility at which the technology is used is in compliance with all applicable laws, regulations, and ordinances.
(7)The technology meets any other conditions established by the commission.
(8)The facility certifies that any local agency sending solid waste to the facility diverted at least 30 percent of all solid waste it collects through solid waste reduction, recycling, and composting. For purposes of this paragraph, local agency means any city, county, or special district, or subdivision thereof, which is authorized to provide solid waste handling services.
(c)Renewable energy public goods charge means that portion of the nonbypassable system benefits charge required to be collected to fund renewable energy pursuant to the Reliable Electric Service Investments Act (Article 15 (commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(d)Report means the report entitled Investing in Renewable Electricity Generation in California (June 2001, Publication Number P500-00-022) submitted to the Governor and the Legislature by the commission.
(e)Retail seller means a retail seller as defined in Section 399.12 of the Public Utilities Code.
SEC. 8.SEC. 7.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nations green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8)Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities to for developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)The United States Department of Energy has also called for clean hydrogen hubs to include historically marginalized and disadvantaged communities in the hub decisionmaking process and benefits. California is a national leader in enacting energy policies that enable energy and environmental justice.
(19)(20)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for a regional and statewide investments in renewable energy focused clean hydrogen hub in California. through a California-based clean hydrogen hub. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from renewable energy resources consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code, or as that standard is revised by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)There The California Clean Hydrogen Hub Fund is hereby created in the State Treasury the California Clean Hydrogen Hub Fund for the purpose of implementing the objectives and provisions of this article. The fund shall be administered by the bank.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including any moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature. Legislature, and may be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub pursuant to Section 16161a of Title 42 of the United States Code, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale.
(b)The bank shall administer the fund to provide grants for clean hydrogen projects developed in California consistent with Section 63048.302.(c)(b)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(d)(c)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 40311) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(e)(d)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(f)(e)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do either any of the following:
(A)Maximize the use of renewable feedstocks or renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production from renewable feedstocks or renewable energy resources and zero-carbon resources.
(C)Advance state greenhouse gas emission reduction goals.
(D)Maximize socioeconomic, workforce, equity, and health benefits.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, national laboratories, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, the University of California, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 4.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 5.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 6.Section 25742 is added to the Public Resources Code, to read:25742.The commission shall consult with the Public Utilities Commission and the State Air Resources Board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a renewable electrical generation facility set forth in Section 25741.
SEC. 7.Section 399.12 of the Public Utilities Code is amended to read:399.12.For purposes of this article, the following terms have the following meanings:
(a)Conduit hydroelectric facility means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.
(b)Balancing authority means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.
(c)Balancing authority area means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.
(d)California balancing authority is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.
(e)Eligible renewable energy resource means an electrical generating facility that meets the definition of a renewable electrical generation facility in Section 25741 of the Public Resources Code, or an electrical generating facility using renewable hydrogen, as determined by the Energy Commission pursuant to Section 25742 of the Public Resources Code, subject to the following:
(1)(A)An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(B)Notwithstanding subparagraph (A), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(C)A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a renewable electrical generation facility as defined in Section 25741 of the Public Resources Code.
(D)(i)A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this subparagraph if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.
(ii)Notwithstanding clause (i), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under clause (i), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.
(iii)The amendments made to this subdivision by the act adding this subparagraph are intended to clarify existing law and apply from December 10, 2011.
(2)(A)A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.
(B)Subparagraph (A) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.
(f)Procure means to acquire through ownership or contract.
(g)Procurement entity means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.
(h)(1)Renewable energy credit means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
(2)Renewable energy credit includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.
(3)(A)Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:
(i)The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.
(ii)The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.
(iii)The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.
(B)Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (A) or (D) of paragraph (1) of subdivision (e).
(C)Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (B) of paragraph (1) of subdivision (e).
(D)Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contracts entered into before January 1, 2017.
(i)Renewables portfolio standard means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.
(j)Retail seller means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:
(1)An electrical corporation, as defined in Section 218.
(2)A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical corporation.
(3)An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.
(4)Retail seller does not include any of the following:
(A)A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.
(B)The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(C)A local publicly owned electric utility.
(k)WECC means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.
SEC. 8.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade.
(8)Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities to developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for a regional renewable energy focused clean hydrogen hub in California. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from renewable energy resources consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code. Code, or as that standard is revised by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)There is hereby created in the State Treasury the California Clean Hydrogen Hub Fund for the purpose of implementing the objectives and provisions of this article.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature.
(b)The bank shall administer the fund to provide grants for clean hydrogen projects developed in California consistent with Section 63048.302.
(c)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(d)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 43011) 40311) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(e)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(f)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do either of the following:
(A)Maximize the use of renewable feedstocks or renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production from renewable feedstocks or renewable energy resources and zero-carbon resources.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.Section 38561.7 is added to the Health and Safety Code, to read:38561.7.(a)Not later than December 31, 2023, as part of the scoping plan prepared pursuant to Section 38561 and the states goal for carbon neutrality, the state board shall identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals set forth in this division and the states other climate goals. The evaluation to be included in the scoping plan shall include all of the following:(1)A description of potential efforts for promoting, scaling, and utilizing green hydrogen in the state to help achieve the states climate, clean energy, and clean air objectives.(2)A description of difficult-to-decarbonize sectors of the economy for which green hydrogen may be a more feasible and cost-effective decarbonization method than other alternatives. For purposes of this section, to decarbonize means to reduce or eliminate associated emissions of greenhouse gases. This assessment shall include an estimate of the amount of greenhouse gas emissions reduction and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.(3)A review of similar efforts to deploy hydrogen internationally, including opportunities to collaborate with other jurisdictions to accelerate market scale, cost reductions, and global climate benefits.(b)In developing the evaluation pursuant to subdivision (a), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.(c)This section shall remain in effect only until January 1, 2025, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2025, deletes or extends that date.SEC. 4.SEC. 3.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 5.SEC. 4.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 6.SEC. 5.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 percent Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 7.Section 399.12 of the Public Utilities Code is amended to read:399.12.For purposes of this article, the following terms have the following meanings:(a)Conduit hydroelectric facility means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.(b)Balancing authority means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.(c)Balancing authority area means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.(d)California balancing authority is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.(e)(1)Eligible renewable energy resource means an electrical generating facility that meets the definition of a renewable electrical generation facility in Section 25741 of the Public Resources Code, subject to the following:(A)(i)An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.(ii)Notwithstanding clause (i), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.(iii)A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a renewable electrical generation facility as defined in Section 25741 of the Public Resources Code.(iv)(I)A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this clause if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.(II)Notwithstanding subclause (I), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under subclause (I), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.(III)The amendments made to this paragraph by the act adding this clause are intended to clarify existing law and apply from December 10, 2011.(B)(i)A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.(ii)Clause (i) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.(2)Eligible renewable energy resource means an electrical generation facility that uses hydrogen that would qualify as renewable hydrogen under the recommendations developed pursuant to Section 39619.9 of the Health and Safety Code.(f)Procure means to acquire through ownership or contract.(g)Procurement entity means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.(h)(1)Renewable energy credit means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.(2)Renewable energy credit includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.(3)(A)Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:(i)The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.(ii)The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.(iii)The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.(B)Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of clause (i) or (iv) of subparagraph (A) of paragraph (1) of subdivision (e).(C)Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of clause (ii) of subparagraph (A) of paragraph (1) of subdivision (e).(D)Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contacts entered into before January 1, 2017.(i)Renewables portfolio standard means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.(j)Retail seller means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:(1)An electrical corporation, as defined in Section 218.(2)A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical corporation.(3)An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.(4)Retail seller does not include any of the following:(A)A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.(B)The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.(C)A local publicly owned electric utility.(k)WECC means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.SEC. 6.Section 25742 is added to the Public Resources Code, to read:25742.The commission shall consult with the Public Utilities Commission and the State Air Resources Board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a renewable electrical generation facility set forth in Section 25741.
SEC. 7.Section 399.12 of the Public Utilities Code is amended to read:399.12.For purposes of this article, the following terms have the following meanings:
(a)Conduit hydroelectric facility means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.
(b)Balancing authority means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.
(c)Balancing authority area means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.
(d)California balancing authority is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.
(e)Eligible renewable energy resource means an electrical generating facility that meets the definition of a renewable electrical generation facility in Section 25741 of the Public Resources Code, or an electrical generating facility using renewable hydrogen, as determined by the Energy Commission pursuant to Section 25742 of the Public Resources Code, subject to the following:
(1)(A)An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(B)Notwithstanding subparagraph (A), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(C)A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a renewable electrical generation facility as defined in Section 25741 of the Public Resources Code.
(D)(i)A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this subparagraph if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.
(ii)Notwithstanding clause (i), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under clause (i), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.
(iii)The amendments made to this subdivision by the act adding this subparagraph are intended to clarify existing law and apply from December 10, 2011.
(2)(A)A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.
(B)Subparagraph (A) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.
(f)Procure means to acquire through ownership or contract.
(g)Procurement entity means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.
(h)(1)Renewable energy credit means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
(2)Renewable energy credit includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.
(3)(A)Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:
(i)The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.
(ii)The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.
(iii)The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.
(B)Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (A) or (D) of paragraph (1) of subdivision (e).
(C)Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (B) of paragraph (1) of subdivision (e).
(D)Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contacts contracts entered into before January 1, 2017.
(i)Renewables portfolio standard means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.
(j)Retail seller means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:
(1)An electrical corporation, as defined in Section 218.
(2)A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical corporation.
(3)An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.
(4)Retail seller does not include any of the following:
(A)A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.
(B)The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(C)A local publicly owned electric utility.
(k)WECC means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.
SEC. 8.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade.
(8)Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities to developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for a regional renewable energy focused clean hydrogen hub in California. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen, hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from renewable energy resources consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)There is hereby created in the State Treasury the California Clean Hydrogen Hub Fund for the purpose of implementing the objectives and provisions of this article.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature.
(b)The bank shall administer the fund to provide grants for clean hydrogen projects developed in California consistent with Section 63048.302.
(c)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(d)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 43011) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(e)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(f)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do either of the following:
(A)Maximize the use of renewable feedstocks or renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production from renewable feedstocks or renewable energy resources and zero-carbon resources.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article. article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.Section 38561.7 is added to the Health and Safety Code, to read:38561.7.(a)Not later than December 31, 2023, as part of the scoping plan prepared pursuant to Section 38561 and the states goal for carbon neutrality, the state board shall identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals set forth in this division and the states other climate goals. The evaluation to be included in the scoping plan shall include all of the following:
(1)A description of potential efforts for promoting, scaling, and utilizing green hydrogen in the state to help achieve the states climate, clean energy, and clean air objectives.
(2)A description of difficult-to-decarbonize sectors of the economy for which green hydrogen may be a more feasible and cost-effective decarbonization method than other alternatives. For purposes of this section, to decarbonize means to reduce or eliminate associated emissions of greenhouse gases. This assessment shall include an estimate of the amount of greenhouse gas emissions reduction and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(3)A review of similar efforts to deploy hydrogen internationally, including opportunities to collaborate with other jurisdictions to accelerate market scale, cost reductions, and global climate benefits.
(b)In developing the evaluation pursuant to subdivision (a), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
(c)This section shall remain in effect only until January 1, 2025, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2025, deletes or extends that date.
SEC. 4.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 5.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 6.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 7.Section 399.12 of the Public Utilities Code is amended to read:399.12.For purposes of this article, the following terms have the following meanings:
(a)Conduit hydroelectric facility means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.
(b)Balancing authority means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.
(c)Balancing authority area means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.
(d)California balancing authority is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.
(e)(1)Eligible renewable energy resource means an electrical generating facility that meets the definition of a renewable electrical generation facility in Section 25741 of the Public Resources Code, subject to the following:
(A)(i)An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(ii)Notwithstanding clause (i), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(iii)A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a renewable electrical generation facility as defined in Section 25741 of the Public Resources Code.
(iv)(I)A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this clause if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.
(II)Notwithstanding subclause (I), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under subclause (I), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.
(III)The amendments made to this paragraph by the act adding this clause are intended to clarify existing law and apply from December 10, 2011.
(B)(i)A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.
(ii)Clause (i) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.
(2)Eligible renewable energy resource means an electrical generation facility that uses hydrogen that would qualify as renewable hydrogen under the recommendations developed pursuant to Section 39619.9 of the Health and Safety Code.
(f)Procure means to acquire through ownership or contract.
(g)Procurement entity means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.
(h)(1)Renewable energy credit means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
(2)Renewable energy credit includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.
(3)(A)Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:
(i)The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.
(ii)The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.
(iii)The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.
(B)Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of clause (i) or (iv) of subparagraph (A) of paragraph (1) of subdivision (e).
(C)Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of clause (ii) of subparagraph (A) of paragraph (1) of subdivision (e).
(D)Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contacts entered into before January 1, 2017.
(i)Renewables portfolio standard means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.
(j)Retail seller means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:
(1)An electrical corporation, as defined in Section 218.
(2)A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical corporation.
(3)An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.
(4)Retail seller does not include any of the following:
(A)A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.
(B)The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(C)A local publicly owned electric utility.
(k)WECC means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.
SEC. 8.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage and shall consider other potential uses of green electrolytic hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
(a)The Legislature finds and declares all of the following:
(1)Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2)California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3)In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4)Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5)California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6)Californias leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost reductions for green hydrogen and its derivatives.
(7)Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade.
(8)Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the states climate, clean air, and clean energy goals.
(9)Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10)Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11)Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12)California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13)Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14)The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities to developing and employing Californias skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. Californias policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the availability of well-paid jobs with good benefits remains a top priority in California.
(15)Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16)The Lawrence Livermore National Laboratory report, Getting to Neutral, highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under Californias Cap-and-Trade program.
(17)The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18)The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19)California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b)It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c)It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for a regional renewable energy focused clean hydrogen hub in California. The policies will further solidify Californias decades of global leadership related to hydrogen and further demonstrate and scale production, processing, delivery, storage, and end use of clean hydrogen, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:6.8.California Clean Hydrogen Hub Fund63048.300.For purposes of this article, the following definitions apply:
(a)Clean hydrogen means hydrogen produced from renewable energy resources consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code.
(b)Director means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c)Fund means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.(a)(1)There is hereby created in the State Treasury the California Clean Hydrogen Hub Fund for the purpose of implementing the objectives and provisions of this article.
(2)The fund shall be separate from any other fund or account created under this division.
(3)Moneys in the fund, including moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature.
(b)The bank shall administer the fund to provide grants for clean hydrogen projects developed in California consistent with Section 63048.302.
(c)In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(d)The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 43011) of Title II of Division D of Public Law 117-58), as well as the states goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(e)The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(f)(1)On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analysts Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A)Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B)A description of the contribution of funded projects to the states climate policy objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2)The report shall be posted on the banks internet website.
(3)The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.(a)(1)The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:
(A)Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B)Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2)In selecting projects to receive grants under this article, the bank shall prioritize projects that do either of the following:
(A)Maximize the use of renewable feedstocks or renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B)Help achieve economies of scale and reduce the cost of clean hydrogen production from renewable feedstocks or renewable energy resources and zero-carbon resources.
(b)The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen.
(c)Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia, and nonprofit organizations.
(d)The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.(a)The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.
(b)The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governors Office of Business and Economic Development.
(c)The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article.
SEC. 3.Section 38561.7 is added to the Health and Safety Code, to read:38561.7.(a)Not later than December 31, 2023, as part of the scoping plan prepared pursuant to Section 38561 and the states goal for carbon neutrality, the state board shall identify the role of hydrogen, and particularly green hydrogen, in helping California achieve the goals set forth in this division and the states other climate goals. The evaluation to be included in the scoping plan shall include all of the following:
(1)A description of potential efforts for promoting, scaling, and utilizing green hydrogen in the state to help achieve the states climate, clean energy, and clean air objectives.
(2)A description of difficult-to-decarbonize sectors of the economy for which green hydrogen may be a more feasible and cost-effective decarbonization method than other alternatives. For purposes of this section, to decarbonize means to reduce or eliminate associated emissions of greenhouse gases. This assessment shall include an estimate of the amount of greenhouse gas emissions reduction and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(3)A review of similar efforts to deploy hydrogen internationally, including opportunities to collaborate with other jurisdictions to accelerate market scale, cost reductions, and global climate benefits.
(b)In developing the evaluation pursuant to subdivision (a), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
(c)This section shall remain in effect only until January 1, 2025, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2025, deletes or extends that date.
SEC. 4.Section 38561.8 is added to the Health and Safety Code, to read:38561.8.(a)For purposes of this section, decarbonize means to reduce or eliminate associated emissions of greenhouse gases.
(b)The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state boards internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1)Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the states climate, clean energy, and clean air objectives. The policy recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2)A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3)A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the states climate, clean energy, and clean air objectives.
(4)An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5)An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c)In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.
SEC. 5.Section 39619.9 is added to the Health and Safety Code, to read:39619.9.By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:
(a)Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities shall consider all of the following:
(1)The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2)Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3)Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to subdivision (a) of Section 454.53 of the Public Utilities Code.
(4)The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b)Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entitys jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting other state goals.
(c)Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d)Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 6.Section 25307 is added to the Public Resources Code, to read:25307.(a)For purposes of this section, decarbonizing means reducing or eliminating associated emissions of greenhouse gases.
(b)As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015).
(c)Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 7.Section 399.12 of the Public Utilities Code is amended to read:399.12.For purposes of this article, the following terms have the following meanings:
(a)Conduit hydroelectric facility means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.
(b)Balancing authority means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.
(c)Balancing authority area means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.
(d)California balancing authority is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.
(e)(1)Eligible renewable energy resource means an electrical generating facility that meets the definition of a renewable electrical generation facility in Section 25741 of the Public Resources Code, subject to the following:
(1)(A)(A)(i)An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(B)(ii)Notwithstanding subparagraph (A), clause (i), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(C)(iii)A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a renewable electrical generation facility as defined in Section 25741 of the Public Resources Code.
(D)(i)(iv)(I)A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this subparagraph clause if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.
(ii)(II)Notwithstanding clause (i), subclause (I), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under clause (i), subclause (I), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.
(iii)(III)The amendments made to this subdivision paragraph by the act adding this subparagraph clause are intended to clarify existing law and apply from December 10, 2011.
(2)(A)(B)(i)A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.
(B)Subparagraph (A)(ii)Clause (i) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.
(2)Eligible renewable energy resource means an electrical generation facility that uses hydrogen that would qualify as renewable hydrogen under the recommendations developed pursuant to Section 39619.9 of the Health and Safety Code.
(f)Procure means to acquire through ownership or contract.
(g)Procurement entity means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.
(h)(1)Renewable energy credit means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
(2)Renewable energy credit includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.
(3)(A)Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:
(i)The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.
(ii)The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.
(iii)The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.
(B)Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of clause (i) or (iv) of subparagraph (A) or (D) of paragraph (1) of subdivision (e).
(C)Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of clause (ii) of subparagraph (B) (A) of paragraph (1) of subdivision (e).
(D)Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contacts entered into before January 1, 2017.
(i)Renewables portfolio standard means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.
(j)Retail seller means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:
(1)An electrical corporation, as defined in Section 218.
(2)A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical corporation.
(3)An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.
(4)Retail seller does not include any of the following:
(A)A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.
(B)The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(C)A local publicly owned electric utility.
(k)WECC means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.
SEC. 8.Section 400.3 of the Public Utilities Code is amended to read:400.3.The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage, storage and shall consider other potential uses of green electrolytic hydrogen. hydrogen in their decarbonization strategies. For purposes of this section, decarbonization strategies means actions undertaken to reduce or eliminate emissions of greenhouse gases.
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Date
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Status
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|---|---|
| Sep 16, 2022 | Chaptered by Secretary of State. Chapter 363, Statutes of 2022. |
| Sep 16, 2022 | Approved by the Governor. |
| Sep 6, 2022 | Enrolled and presented to the Governor at 3:30 p.m. |
| Aug 30, 2022 | Assembly amendments concurred in. (Ayes 37. Noes 0. Page 5333.) Ordered to engrossing and enrolling. |
| Aug 30, 2022 | In Senate. Concurrence in Assembly amendments pending. |
| Aug 30, 2022 | Read third time. Passed. Ordered to the Senate. |
| Aug 23, 2022 | Read third time and amended. |
| Aug 16, 2022 | Read second time. Ordered to third reading. |
| Aug 15, 2022 | Read second time and amended. Ordered to second reading. |
| Aug 11, 2022 | From committee: Do pass as amended. (Ayes 12. Noes 0.) (August 11). |
| Aug 3, 2022 | August 3 set for first hearing. Placed on suspense file. |
| Jun 29, 2022 | Read second time and amended. Re-referred to Com. on APPR. |
| Jun 28, 2022 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (June 27). |
| Jun 23, 2022 | From committee: Do pass and re-refer to Com. on NAT. RES. (Ayes 14. Noes 0.) (June 22). Re-referred to Com. on NAT. RES. |
| Jun 9, 2022 | Referred to Coms. on U. & E. and NAT. RES. |
| May 27, 2022 | In Assembly. Read first time. Held at Desk. |
| May 26, 2022 | Read third time. Passed. (Ayes 38. Noes 0. Page 3985.) Ordered to the Assembly. |
| May 24, 2022 | Ordered to special consent calendar. |
| May 23, 2022 | Read second time. Ordered to third reading. |
| May 19, 2022 | From committee: Do pass as amended. (Ayes 7. Noes 0. Page 3782.) (May 19). |
| May 17, 2022 | Set for hearing May 19. |
| May 16, 2022 | May 16 hearing: Placed on APPR suspense file. |
| May 6, 2022 | Set for hearing May 16. |
| May 4, 2022 | Read second time and amended. Re-referred to Com. on APPR. |
| May 3, 2022 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 12. Noes 0. Page 3509.) (April 26). |
| Apr 14, 2022 | Set for hearing April 26. |
| Apr 13, 2022 | April 25 hearing postponed by committee. |
| Apr 8, 2022 | Set for hearing April 25. |
| Apr 7, 2022 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on E., U. & C. |
| Mar 21, 2022 | From committee: Do pass and re-refer to Com. on E., U. & C. (Ayes 12. Noes 0. Page 3167.) (March 21). Re-referred to Com. on E., U. & C. |
| Mar 16, 2022 | Set for hearing March 21. |
| Feb 24, 2022 | Referral to Com. on E.Q. rescinded because of the limitations placed on committee hearings due to ongoing health and safety risks of the COVID-19 virus. |
| Feb 23, 2022 | Referred to Coms. on B., P. & E.D., E., U. & C., and E.Q. |
| Feb 16, 2022 | From printer. |
| Feb 15, 2022 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
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Description
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Location
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Votes
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|
|---|---|---|---|---|
| Aug 30, 2022 | SB 1075 Skinner Senate Third Reading By Holden | Assembly Floor |
Passed |
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| Aug 30, 2022 | Unfinished Business SB1075 Skinner et al. Concurrence | Senate Floor |
Passed |
|
| May 26, 2022 | Special Consent SB1075 | Senate Floor |
Passed |
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