California lawmakers pass bill to expand manufacturing decarbonization projects

Dive Transient:

• The California Legislature on Sept. 10 overwhelmingly handed a invoice that would supply financing for producers trying to undertake thermal power storage techniques and warmth pumps for his or her operations.
• AB 1280, launched by Democratic Meeting member Robert Garcia, would develop the varieties of decarbonization initiatives thought-about eligible for monetary incentives beneath applications just like the California Power Fee’s Industrial Decarbonization and Enchancment of Grid Operations program.
• The state invoice would additionally set labor and neighborhood profit necessities earlier than initiatives are permitted for financing. Gov. Gavin Newsom has till mid-October to signal it into legislation.

Dive Perception:

California’s INDIGO program, created in 2022, gives incentives for industrial initiatives that profit {the electrical} grid, cut back emissions and enhance air high quality, based on its web site. Earlier this 12 months, Sierra Nevada Cheese acquired a $5.5 million loan from this system to put in an anaerobic digester, linear generator and different tools to decrease emissions from its cheese plant. 

The invoice, which handed the Senate unanimously on Sept. 9, would make thermal power storage expertise eligible for 3 state applications: the Local weather Catalyst Revolving Mortgage program run by the California Infrastructure and Financial Growth Financial institution, in addition to the CEC’s Lengthy Length Power Storage and INDIGO applications. It’s receiving sturdy political help after federal incentives focusing on carbon emissions had been reduce or repealed earlier this 12 months.

In California, producers lately misplaced greater than $500 million in federal funding earmarked for decarbonization initiatives, mentioned Teresa Cheng, California Director at Industrious Labs, a local weather advocacy group.

“California actually has a possibility to speculate on this sector,” Cheng mentioned. “To not solely reduce industrial air pollution [and] decrease power prices, however to verify we maintain manufacturing jobs right here within the state.”

The invoice additionally handed the Meeting ground 71-1 this week. The one dissenting vote got here from Republican Meeting member Carl DeMaio. Cheng and different supporters, together with Amy’s Kitchen, the Pure Sources Protection Council and Sierra Nevada Brewing, mentioned the initiatives will slash greenhouse gasoline emissions and enhance air high quality, whereas maintaining electrical energy prices inexpensive for companies and residents.

“It’s an instance of how we will use local weather coverage to not solely reduce well being harming air pollution that’s leading to costly hospital payments and bronchial asthma assaults, early deaths, but in addition creating good jobs and serving to to keep up and put money into our manufacturing base,” Cheng mentioned.

California has one of many largest manufacturing economies, employing 1.3 million people, or about 7% of the state’s workforce in 2023, based on the Governor’s Workplace of Enterprise and Financial Growth. Whereas it’s thought-about a local weather invoice, Cheng mentioned it’s additionally an financial funding invoice meant to offset mission prices and assist retain firms to allow them to do enterprise in a “sustainable, environment friendly and non-polluting method.”

The Western Electrical Contractors Affiliation opposed the invoice, urging Garcia to take away the mission labor Settlement provisions, arguing they’re discriminatory and improve the price of building.

The state’s enterprise and financial improvement company reported one-time, stand-up prices starting from roughly $1.5 million to $3 million related to the invoice, in addition to ongoing prices starting from $429,000 to $1.03 million.