Passage of Voluntary Emissions Bank HB 2152 Creates Incentives for Arizona’s Business Economy and Improved Air Quality

PHOENIX – Arizona Department of Environmental Quality officials today thank Governor Ducey for signing House Bill 2152, Emissions credits; voluntary emissions bank, into law, which provides both new and expanding Arizona businesses added opportunity in meeting mandatory federal Clean Air Act requirements to improve air quality, and may serve as a draw for new industries to locate to our state.

Prior to the passing of HB 2152, surplus emissions reductions deposits to Arizona’s emissions bank, which can be purchased by new or expanding businesses to meet Clean Air Act permitting requirements, were accepted only from permitted industrial facilities (traditional sources). Surplus emissions reductions are generated when a company reduces its air emissions below legal limits.

Representative Russell Bowers, R-25, sponsor of the bill, said, “With the demands of the EPA pressing upon our unique desert environment and its ambient production of ozone constituents, we have not been able to find permit space for new industry needs for air permits. While I have concerns about intruding into mobile sources, this voluntary approach could prove a great benefit to industry growth in Arizona.”

Enactment of this legislation expands the emissions bank to accept deposits from “non-traditional sources,” such as reductions generated through electrification of vehicle fleets. Allowing deposits from non-traditional sources will significantly increase the number of credits that could be deposited. For example, Maricopa County reports that 86 percent of contaminants that contribute to ozone generation come from non-traditional sources, mostly vehicles. This bill provides both an economic and environmental opportunity because it supports business growth in Arizona and incentivizes further air emissions reductions through a voluntary free-market sale process.

ADEQ Air Quality Division Director, Timothy S. Franquist, said, “The enactment of HB 2152 is consistent with Governor Ducey’s vision for agencies to be actively looking for ways to increase economic growth in Arizona. The enhanced voluntary Arizona emissions bank achieves both economic and environmental benefits by allowing new types of emissions offset credits to be used.” Franquist further explained that, “Arizona’s model is not a ‘cap and trade’ regulatory structure used elsewhere in the country.”

“These changes are a win-win for business and air quality,” Maricopa County Board of Supervisors Chairman, Denny Barney, District 1, said. “The emissions bank allows the County to keep and attract desirable high-tech companies while working toward achieving air quality standards.”

ADEQ and Maricopa County officials worked cooperatively with stakeholders throughout the legislative session to develop and refine key provisions of the bill as follows:

  • Clarifies that the State does not receive any new authority to establish emissions limits for stationary or mobile sources, participation in the emissions bank is voluntary and credits do not expire
  • Prohibits banked credit sweeps by ADEQ or any other entity
  • Allows non-traditional credits to be banked