Comments on Climate Protection Program Emissions-Intensive, Trade-Exposed Entities Rulemaking

August 13, 2026

Department of Environmental Quality

State of Oregon

700 NE Multnomah Street, Suite 600

Portland, Oregon 97232-4100

RE: Comments on Climate Protection Program Emissions-Intensive, Trade-

Exposed Entities Rulemaking

Dear Department of Environmental Quality Staff,

Thank you for the opportunity to provide comments following the second

Rulemaking Advisory Committee meeting regarding emissions-intensive, tradeexposed

(EITE) entities and direct natural gas (DNG) sources. We appreciate the

opportunity to participate in this process and to share our perspective on

regulations that will materially affect Oregon employers, energy providers, and

customers.

As stated in our previous comments, NWGA supports reducing greenhouse gas

emissions while preserving reliability, affordability, and Oregon’s economic

strength. Our feedback is guided by three principles: utilities must maintain

sufficient year-round resources to serve customers; a one-size-fits-all approach

will not adequately reflect facility-specific circumstances; and the cost of this

transition must remain affordable for consumers while allowing businesses to grow

in Oregon.

Based on these principles, NWGA offers the following policy recommendations

for this rulemaking.

Protect Non-EITE and Non-DNG Consumers from Cost Shifting

This rulemaking should ensure that compliance obligations are allocated fairly

and do not shift costs from EITE facilities or DNG sources to local distribution

companies, fuel suppliers, small businesses, or residential customers. If certain

emissions reductions are technically or economically infeasible within the

required timeframe, other customers should not bear those costs through higher

energy prices. Protecting non-EITE and non-DNG customers from unintended cost

impacts should be a central program design principle.

Prevent Emissions Leakage and Economic Leakage

The Climate Protection Program should achieve real emissions reductions, not

simply move emissions or economic activity outside Oregon. If compliance

obligations exceed what is technically or economically achievable, facilities may

reduce production, delay investment, or relocate to jurisdictions with less

stringent requirements. That outcome could reduce Oregon jobs, investment,

and tax base while leaving global emissions unchanged or higher. Rules should

preserve Oregon’s industrial competitiveness while encouraging achievable

reductions based on technical feasibility, market conditions, and competitive

impacts.

Promote Regional Consistency with Washington's Climate Commitment Act

Where practical, Oregon should align key elements of its Climate Protection

Program with Washington’s Climate Commitment Act. Many regulated entities

operate facilities, supply chains, and energy infrastructure across state lines, and

major differences in compliance requirements can increase complexity, costs,

and investment uncertainty. Regional consistency would improve predictability,

reduce competitive disparities, and lessen incentives to relocate production or

investment based on differences in climate policy. Oregon’s program should still

reflect state-specific requirements while harmonizing major elements such as

compliance schedules, benchmarking approaches, and treatment of

confidential business information.

We appreciate DEQ’s transparency and its willingness to incorporate stakeholder

feedback as it develops these regulations. However, NWGA members remain

concerned that the current starting point for this rulemaking is a fixed overall

emissions cap that could create systemic inequities if EITE and DNG emissions are

not treated with sufficient precision. A fixed cap, without a clear analysis of what

emissions can actually be reduced within a reasonable timeframe, may shift

compliance burdens to other program participants, including fuel suppliers, local

distribution companies, small businesses, industrial customers, and residential

customers. In practice, if certain EITE emissions are technically or economically

infeasible to abate, the reductions required to preserve the integrity of the cap

may fall on sectors and customers with fewer options and less ability to absorb

increased costs.

This concern is heightened by the diversity of the facilities expected to be subject

to this program. DEQ has identified EITE sectors that include pulp and paper, iron

and steel, semiconductor, chemical, concrete, and other manufacturing

facilities, each with very different operations, product markets, emissions profiles,

abatement opportunities, capital-planning cycles, permitting requirements, and

competitive pressures. A uniform compliance structure risks treating

fundamentally different facilities as though they have the same reduction

pathways. A more durable rule should recognize these differences and provide a transparent, facility-sensitive framework that distinguishes between reducible

emissions and non-abatable emissions tied to required pollution-control or safety

equipment, process emissions with limited near-term alternatives, and emissions

that may be reduced only after major capital investment, permitting, or supplychain

availability.

We recommend the following:

1. Separate EITE and DNG emissions from the total cap or otherwise establish a

clear mechanism to prevent unavoidable EITE and DNG emissions from

shifting compliance burdens across sectors. If certain emissions cannot be

abated within the compliance period, other sectors should not be required to

make up the difference under the overall cap.

2. Conduct a facility-specific analysis to determine which portions of EITE and

DNG emissions are not currently abatable and which reductions are

technically and economically feasible. This analysis should distinguish

between process emissions and combustion emissions, account for federally

mandated pollution-control equipment and other required operations and

identify realistic timeframes for reductions based on capital planning,

permitting, interconnection, equipment availability, workforce constraints,

and supply-chain timelines.

3. Include an adjustment mechanism that allows benchmarks and reduction

schedules to be revised when a facility experiences material changes in

production, feedstock, technology availability, regulatory requirements,

energy infrastructure, or market conditions. The mechanism should be clear,

timely, and administratively workable for both DEQ and regulated entities.

4. Evaluate and disclose customer cost impacts before finalizing reduction

schedules, including impacts to small businesses, industrial customers, public

institutions and residential customers who may have limited near-term

alternatives and bear the compliance costs through higher energy prices.

With this analysis, the RAC will be better positioned to provide targeted feedback

on program design, benchmarks, reduction schedules, community climate

investments, and program review. A shared understanding of what can

realistically be achieved from a technical and economic standpoint would also

reduce complexity and administrative burden while supporting program goals.

Absent that analysis, NWGA offers the following comments based on the

discussion at the July RAC meeting and the RAC 2 Policy Memo.

Benchmarking: We support expanding the benchmark period from the most

recent three years (2023–2025) to ten years (2015–2025). A longer period is more

likely to reflect normal business cycles, outages, changes in product mix, market

disruptions, and facility-specific operating conditions. It would also reduce the risk that an anomalous short period becomes the basis for long-term compliance

obligations and could lessen DEQ’s administrative burden by reducing

adjustment requests.

Reduction Schedules: We support delaying reductions until the 2030–2031

compliance period. Because these rules will not be finalized until 2027, entities will

need time for compliance planning, investment decisions, and necessary lead

times. We also support the recommendations for a reduction schedule of 0.75%

every two years, or 1.5% every four years. Aligning Oregon’s trajectory more

closely with Washington’s Climate Commitment Act would reduce regional

regulatory disparities, lessen competitive disadvantages for Oregon facilities, and

reduce incentives for emissions and investment leakage.

Adjustments to Reduction Schedules: We support a clear process to adjust

reduction schedules and benchmarks when necessary. Entities should be able to

submit information showing that reductions are not technically or economically

feasible, including evidence related to market demand, conflicting

environmental or energy policies, equipment failures, natural disasters, major

operational changes, or similar impacts.

Privacy of Production Data: We support an approach to data privacy that is

consistent with Washington’s Climate Commitment Act.

“Information contained in assessments submitted to the department by an

emissions-intensive, trade-exposed facility under this subsection (9) are records

containing financial, proprietary, and other market-sensitive information in

accordance with RCW 70A.65.100(9)(c), and such assessments are fully exempt

from public disclosure in their entirety. The department may make public

summarized information contained in assessments submitted under this

subsection (9) in an aggregated manner that does not allow for the

identification of any facility-specific financial, proprietary, or market-sensitive

information.”

Program Review and Evaluation: We support program review and evaluation, but

the proposed timeframe may not be responsive enough to address leakage risk,

compliance risk, or unintended economic impacts. A facility may suspend

operations, relocate production, or defer investment before a formal leakage

determination occurs. The rules should create a clear pathway for EITE and DNG

entities to notify DEQ when compliance obligations may affect production,

investment, or continued operations in Oregon, and to provide the information

needed to evaluate leakage risk, customer cost impacts, and potential lost

economic opportunities. Program review should serve as an early intervention

tool, not only a retrospective assessment after Oregon has lost an employer,

production line, or investment opportunity.

DEQ should evaluate this rulemaking as an integrated compliance framework,

not as isolated components. Regulated entities will assess whether the combined

requirements for benchmarks, reduction schedules, adjustment processes,

reporting, and compliance instruments allow lawful, reliable, and competitive

long-term operations. Those decisions will inform capital planning, production,

investment in Oregon facilities, and long-term viability. For that reason, the

program should begin with realistic assumptions about what reductions are

technically and economically achievable, a clear understanding of cumulative

compliance obligations, and safeguards against leakage or discouraged

investment.

A compliance framework that increases emissions reductions on paper while

shifting manufacturing, investment, or energy-intensive production to jurisdictions

with less stringent standards would not achieve the Climate Protection Program’s

environmental objectives. The rulemaking should prioritize actual net emissions

reductions while minimizing economic and emissions leakage.

NWGA appreciates DEQ’s continued engagement and encourages the

Department to refine the framework to protect customers, prevent leakage, and

reflect facility-specific feasibility. We look forward to continued dialogue and to

helping develop a practical pathway for emissions reductions that supports

reliability, affordability, and economic growth in Oregon.

Sincerely,

Kelly Fukai Chief Executive Officer

Northwest Gas Association (NWGA)

Download Letter