A Colorado law that cuts greenhouse gases from the state’s dirtiest industrial smokestacks has surpassed its goals six years ahead of schedule, delivering a rare clean air success to regulators and environmental groups amid stubborn ozone problems and a flurry of federal policy reversals.
Three cement manufacturers and Pueblo’s steelmaking plant were targets in 2019 of the first law cutting emissions, Greenhouse gas emissions and Energy Management for Manufacturers, or GEMM 1. Because those four are in so-called energy-intensive, trade-exposed industries with highly competitive international pricing, they were asked to improve energy efficiency 5% more than the best available technology rather than make hard and fast greenhouse cuts.
The GEMM 1 group has cut emissions by 26.6%, according to the latest state data, far more than expected.
The group of 18 heavy manufacturing sites including Molson Coors, Leprino Foods, JBS Swift and Suncor, grouped into GEMM 2 laws in 2021, have cut greenhouse gas emissions by 23.4% from a baseline set in 2015. That’s well ahead of the minimum cuts of 20% by 2030. Backers of the legislation and subsequent enforcement rules also argue the greenhouse gas cuts result in simultaneous trims to local pollutants such as nitrogen oxide and sulfur dioxide.
“Emissions have fallen faster than anticipated, and that’s great,” said Katie Schneer, an air pollution expert with the nonprofit Environmental Defense Fund, which has criticized various Colorado regulations for not going far enough. “Reducing pollution from these facilities provides meaningful public health and climate benefits.”
Air Pollution Control Division regulators are happy with the speed of the greenhouse cuts, and say Colorado’s first-in-the-nation law calling out specific company smokestacks for trims launched a steep learning curve for business and government around the United States. Each industrial sector had to analyze their energy use and emissions with a third-party auditor and plan for technology or process changes.
“That’s a huge learning, because that helps both them and policymakers understand not only how they’re going to apply this rule, but what the potential might be going forward after 2030,” said Patrick Cummins, director of environmental health and protection for the Colorado Department of Public Health and Environment, which oversees air pollution regulations.
The GEMM 1 group of the four heaviest industries, cement and steel that use tremendous amounts of heat for kilns and furnaces, appears to have made cuts with energy efficiency, Cummins said.
The group of 18 GEMM 2 companies in a variety of industries saw significant cuts from two microchip manufacturers, he added.
When the rules to carry out the legislature’s laws were under discussion in 2023, “many industries warned that requiring a 20% reduction by 2030 would have catastrophic impacts on costs and job losses and force manufacturers out of state,” Schneer noted. “The very next year, these facilities more than achieved that 20% reduction, and the sky hasn’t fallen yet. The fact that these facilities have reduced their emissions faster than they were required to underscores just how overblown the rhetoric around massive costs and job loss was.”
Colorado officials say it’s too early to rate the success of a third leg of the industrial emissions laws, which created a credit trading system among companies that made more cuts than they needed and those that were not able to make deep cuts. The companies that see they will not make the 20% mark by 2030 can buy credits from those already making them.
“There were a number of credits generated and offered at auction last year,” Cummins said — primarily from the chip manufacturers — but “very few of them sold, and that’s because most sources are getting the reductions on their own so far.”
“If anything is surprising to me, it’s the fact that the vast majority of the facilities are making the reductions on site and have not so far indicated that they’re going to be heavily relying on credits to achieve compliance,” Cummins said.
That the credit trading concept hasn’t been used much is a signal Colorado can and should go much bigger in its greenhouse gas reduction goals, Schneer said. The Environmental Defense Fund is a major supporter of what is known as a “cap and invest” program other states and Canadian provinces are employing. It would cover far more industries and smokestacks than Colorado’s limited GEMM programs.
Not only have Washington, California and the province of Quebec launched cap and invest, they’ve now agreed to link their programs to “unlock greater pollution cuts,” Schneer said.
Under cap and invest, a state sets an overall carbon emissions limit that declines each year, and auctions “allowances” to companies to emit a portion of the cap. Companies can buy the allowances from the state or from other companies that have earned credits by cutting pollution. The state’s auction proceeds go to carbon-cutting investments such as expanded EV buying rebates, utility bill rebates, swapping natural gas furnaces for electric heat pumps and other carbon-reduction tools.
Colorado’s current credit system only covers companies emitting about 8 million tons of greenhouse gases, out of a state economy encompassing about 115 million tons of total emissions a year, Schneer said. Washington’s program, by comparison, covers nearly 100 companies with 63 million tons of climate pollution.
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