Colorado’s next greenhouse gas cuts target big smokestacks. Will it be enough?

A series of Colorado’s largest greenhouse gas-emitting sectors have come under the regulatory knife for cuts in recent years: oil and gas producers, gasoline vehicles, large buildings, cement plants and coal-fired utilities. 

Now a secondary tier of big-name greenhouse gas polluters is facing new rules from an Air Quality Control Commission vote this month, with the goal of 20% emissions reductions from a 2015 benchmark at industrial companies like Suncor, Molson Coors, Cargill Meat Solutions and Leprino Foods. 

While the industries argue a 2030 timeline for those cuts is too quick and expensive, environmental and neighborhood groups say the state’s draft rules for the legislation-mandated cuts won’t actually reduce greenhouse gases for at least seven years. They also say a trading plan to allow the 18 sites on the list to buy carbon credits to meet the rules is a game where the same side always loses: low-income and high-minority neighborhoods disproportionately impacted by decades of harmful pollutants. 

The idea of a big company like Suncor buying carbon credits from a greener company instead of cutting pollution at their own facility, next to those beleaguered neighbors, is only one objection environmental groups are bringing to an Air Quality Control Commission vote at the Sept. 20-22 meetings.

The main topic for the commission’s meeting is the proposed rule fulfilling a mandate from the 2021 legislature requiring 20% cuts by 2030 in the greenhouse gas emissions of a third tier of Colorado’s largest polluters. The by-far largest polluters, utilities, were targeted in previous legislation and rules, while the second tier of only four industrial sources was regulated — controversially — by rules passed in 2021.

State health department staffers’ justification for regulating the next 18 industrial sources in September’s vote says disproportionately impacted, or DI, communities are well protected by the draft regulations, and will breathe easier from the carbon dioxide cuts and from drops in other pollutants that are a side benefit of attacking carbon. 

The momentum behind a series of state rule votes on air quality is spotlighted in this chart of where Colorado’s greenhouse gas emissions come from. The 2020 segments haven’t changed dramatically since this was released. (Source: Colorado Department of Public Health and Environment via Conservation Colorado)

The state’s rules say the next companies targeted will only be able to buy credits to fulfill their cuts if they’ve proven they’ve installed all possible cost-effective pollution control measures.

What’s “cost effective” when it comes to pollution is not exactly a settled question.

Groups that fight for DI communities say the whole point of environmental justice provisions embedded in climate laws is to cut pollution right where it has hurt people most. Nor does setting the “social cost” of carbon at $89 a ton account for heat exposure and high rates of asthma, heart problems and other ailments in Colorado’s industrial neighborhoods, according to rule comments by GreenLatinos, Environmental Defense Fund and others. 

The EDF points out another troubling aspect of the state’s proposed rule: Because of how and when the benchmarks were set, the 18 companies as a group will actually be allowed to increase their greenhouse gas emissions slightly before steeper cuts kick in for 2030.

“As a result of the inflated baseline and modest interim reduction targets, the proposed rule would allow half of the facilities to increase emissions or make no reductions, relative to current levels, for the next six years,” the EDF said. That flouts the urgency of the climate change problem and state laws demanding that reductions start now, the nonprofit says. 

Even the state’s draft, revised after expert comments, would let the group of 18 facilities “emit nearly 1.2 million tons more climate pollution over the decade than if pollution from these industries stayed flat where they are today,” said Katie Schneer, Colorado based senior climate analyst for EDF. “That equates to an increase of 9% above today’s pollution levels from these facilities in each year leading up to 2030, with only a 5% reduction in 2030.”

A group of state lawmakers who say they wrote and pushed through the 2021 industrial pollution legislation sent a letter to the AQCC warning the division’s draft rules would not achieve the required greenhouse gas cuts, and won’t shield the industries’ neighbors from the co-pollutants produce alongside carbon. 

“The current draft deviates significantly from the intent of the law we worked to pass,” said the letter, signed by Capitol leaders including Sen. Faith Winter, D-Westminster; Rep. Jennifer Bacon, D-Denver; and, Rep. Elizabeth Velasco, D-Glenwood Springs, and 13 others. 

The environmental groups’ red-lining of state draft rules all emphasize the need for speed. 

“Given the cumulative buildup of carbon pollution in the atmosphere, rapid reductions in greenhouse gases are crucial for limiting the overall amount of warming we will experience,” the EDF said. 

Colorado’s Air Pollution Control Division Director Michael Ogletree said state staff are continuing to revise the draft rules in regard to environmental and industry comments, and will continue revisions right up to the commission’s hearing date. 

The largest annual carbon emitters in the state are utilities burning coal, and their steep mandated cuts are on pace and handled in a separate series of regulations. 

So what big corporations are the industrial targets in these latest climate rules? Industrial manufacturing polluters were first targeted in a set of rules called Greenhouse Gas Emissions and Energy Management for Manufacturing or GEMM 1. 

That first industrial phase sought carbon cuts from only four major sources in the state: Three cement-making kilns, and Pueblo’s Evraz steel plant, each putting out more than 50,000 tons of carbon a year. Those industries got some special breaks along with the required emissions audits and cuts, because they are considered “energy intensive and trade exposed,” meaning they can claim it’s hard to clean up their fuel source without raising expenses to a point where foreign competition puts them out of business. 

This month’s vote is for GEMM 2, affecting 18 more corporations whose facilities put out 25,000 tons or more of carbon. It’s a list of familiar companies: JBS Swift, Western Sugar, Suncor, Molson Coors, Cargill, Anheuser-Busch, Leprino Foods. Together, the 18 put out about 2.4 million tons of carbon dioxide a year, while Colorado’s overall carbon output across all sources was about 126 million tons in 2020. 

“We oppose trading schemes and cost thresholds that allow corporations to avoid improvements that will improve the local environmental quality for the communities that surround them,” said Ean Tafoya, Colorado director for GreenLatinos. “We are especially concerned that the Colorado Energy Office is backing an industry proposal to pay to pollute in communities rather than protect communities like the Environmental Justice Act requires.”

Suncor’s pre-hearing statements to the commission, meanwhile, said the 2024 launch time for the earliest greenhouse gas cuts are too “aggressive,” and are not required by the 2021 legislation that set up the next tier of industrial rules. Suncor, which requested an hour at the hearings to present its objections, also said the draft rules don’t offer a “technically feasible and cost-effective alternative” for some industries, and do not create a stable or liquid trading market for the carbon credits.

“The commission needs to carefully consider the design of the proposed rule to ensure that it does not negatively impact Colorado’s fuel supply, Colorado’s asphalt supply, and consumer prices,” Suncor said. 

Colorado residents can follow the public comments and commission debate online during the AQCC’s meetings Sept. 20-22.