House Bill 2367 amends RCW 70A.65.080, amends RCW 80.80.110, and repeals RCW 82.08.811 and RCW 82.12.811. It creates detailed criteria for when a person or facility is a "covered entity" for program compliance based on reported or provided emissions and a 25,000 metric ton CO2e threshold, lists multiple statutory exemptions (including aviation fuel, watercraft fuel combusted outside Washington, certain coal-fired generation emissions before January 1, 2026, CO2 from biomass or biofuels, certain agricultural fuel uses, emissions under NAICS 92811, and municipal solid waste landfills subject to chapter 70A.540 RCW), and sets time-limited rules for agricultural fuel exemptions (the broader exemption applies through December 31, 2029; beginning January 1, 2030 the exemption applies only to fuel used to propel motor vehicles). The bill requires the department (not specified in the extracted text), in consultation with linked jurisdictions, the Department of Commerce, and the Utilities and Transportation Commission, to adopt by rule a methodology for accounting for imported electricity associated with a centralized electricity market by October 1, 2026. It also authorizes the department to approve agreements among refineries, fuel suppliers, facilities using natural gas, and natural gas utilities to assume compliance obligations, subject to at least 12 months’ advance notice, and requires notice to legislative policy and fiscal committees when an entity ceases to be a covered entity. The bill changes permitting and environmental review procedures under chapter 43.21C RCW by requiring lead agencies to include a life-cycle analysis that attributes any potential net cumulative greenhouse gas emissions from a proposed new or expanded facility compared to existing or best-available technology, and by prohibiting covered emissions from being the sole basis for denying a permit while still requiring their inclusion in the life-cycle analysis. It allows a new or expanded facility that is a covered or opt-in entity to satisfy mitigation requirements for its covered emissions by submitting to the department compliance instruments equivalent to those emissions, and authorizes the department to adopt rules to set thresholds for when the life-cycle analysis applies. The amendment to RCW 80.80.110 prohibits state agencies or political subdivisions from imposing greenhouse gas performance standards or other operating or financial requirements on coal-fired electric generation facilities that were in operation on or before July 22, 2011, or on an electric utility’s long-term purchase of coal transition power, where such standards would be inconsistent with or additional to RCW 80.80.040 or the memorandum of agreement under RCW 80.80.100; that prohibition ceases to apply after December 31, 2025 for a coal-fired facility subject to the memorandum of agreement that remains in operation. The act repeals the two cited RCW sections and takes effect immediately. Important details are missing or unclear in the extracted text: the specific identity of “the department,” full definitions for terms like “covered entity,” “first jurisdictional deliverer,” “specified/unspecified sources,” the mechanics and schedules for compliance periods, allowance transfers, and the complete text of the amendments and repealed sections.

If enacted, the bill makes clear which businesses become regulated based on a 25,000 metric tons CO2e threshold and carves out specific exemptions (including certain agricultural fuel uses through 2029 and narrower farm fuel exemptions after 2030, some biomass/biofuel emissions, aviation and certain out-of-state watercraft fuel, national security sources, and certain landfills). Large emitters that cross the threshold will need to participate in the allowance/transfer system and meet transfer deadlines in the year after their emissions trigger coverage; refineries, fuel suppliers, and natural gas utilities can sign agreements to take on compliance obligations for others but must notify the state at least 12 months before the compliance period. The state must adopt a rule by October 1, 2026 to allocate imported electricity emissions from the regional market, lead agencies must do life-cycle greenhouse gas analyses for major project reviews and may accept compliance instruments to meet mitigation requirements, and certain coal-fired plants in operation by July 22, 2011 are protected from additional state greenhouse gas performance requirements until the end of 2025; the act also repeals two statutory sections tied to coal-related exemptions. Those most affected are facilities and fuel suppliers around the 25,000 tCO2e threshold, refineries and fuel or gas companies that may assume obligations, permitting agencies conducting SEPA reviews, and older coal plants and their utilities. Likely practical changes include new compliance costs and administrative duties for covered entities, an option for fuel/refinery companies to absorb or shift those costs through formal agreements (with a one-year notice requirement), broader review obligations for permitting agencies through life-cycle analysis, and a temporary reduction in regulatory risk for certain coal plants until 2026. Important program details—such as exact definitions of “covered entity,” the identity of the administering department, the allowance schedules, and specific procedures for compliance periods and transfers—are not contained in the provided facts, so some implementation outcomes remain uncertain.