Environmental Developments To Watch In Washington State

Budget issues dominated much of Washington’s 2026 legislative session, but also reflected the continuation of the state’s environmental policy agenda, particularly Washington’s climate, clean energy, and environmental protection goals. Regulated entities could feel the impact as the state moves into a more detailed implementation of its broader clean energy strategy. Other legislation addresses data center tax implications, lead in cookware, marine safety, changes to the permit appeal process, and state-tribal relations.

With an office in Seattle, Beveridge & Diamond (B&D) closely tracks developments, upcoming deadlines, and business implications for companies with operations in Washington State. This article summarizes key areas of state legislative activity and what companies should expect in the year ahead. 

• Climate
• Energy
• Data Centers
• Human Health & Consumer Products
• Permitting Appeals Reforms
• Tribal Treaty Rights
• Maritime Safety

Climate 

While the statutory architecture for Washington’s efforts to address climate change is already in place, the legislature adopted measures to refine the existing legislation.

Clean Energy Transformation Act mandates that utilities generate 100% of the electricity they sell from renewable resources by 2045. SB 5982 extends CETA’s coverage to port districts that distribute electricity to retail customers. Large port districts in Washington commonly distribute and sell electricity to industries operating within those districts, and this bill is therefore of great importance to those districts.

Climate Commitment Act (CCA) establishes a “cap-and-invest” program for entities in Washington that emit 25,000 metric tons of Greenhouse Gases (GHGs) per year. Covered entities must purchase allowances or offsets to cover all of their GHG emissions in the state. The cap on GHG emissions declines over time, with the goal of reducing the state’s GHG emissions to 95% below 1990 levels by 2050. Allowances are sold at quarterly auctions, with revenues earmarked for various initiatives aimed at reducing Washington’s GHG emissions and improving its climate resilience. Several bills amending the CCA were adopted in this year’s session:

• HB 2416 allocates no-cost allowances to waste-to-energy (WTE) facilities built before 1992, through 2030. The only such facility in the state fitting this description is in Spokane. The bill requires a WTE facility to develop a plan to reduce GHG emissions and waste, and recover valuable materials. WTE facilities must submit their plan to the Department of Ecology (Ecology) and the Department of Commerce by December 2030.
• HB 2215 reduces the CCA’s threshold to cover certain fuel suppliers emitting 500 metric tons per year beginning in 2027. The legislation aims to plug a perceived loophole that allowed fuel suppliers to artificially reduce their emissions below the 25,000 metric ton threshold by dividing up fuel imports among different companies.
• HB 2251 replaces the existing system for holding CCA auction revenues with three new accounts. It expands the permissible uses of these funds to include environmental justice initiatives, carbon dioxide sequestration, and spending on electric and alternative fuel vehicle charging and related infrastructure. The legislation also outlines how the state will distribute CCA auction funds among the new accounts.
• SB 6246 requires Ecology to deliver a report to the legislature by December 2026, with recommendations on improvements to the CCA’s provisions concerning Energy Intensive Trade Exposed industries (EITEs, that is, energy-intensive industries subject to international competition that might move overseas if forced to bear the costs of acquiring emissions allowances) and to address “leakage” of emissions to locations outside Washington. Gov. Ferguson vetoed a section of the bill that would have required Ecology to provide a study to the legislature by 2028 discussing the extent to which “leakage” of jobs in EITEs has occurred as a result of the CAA because the legislature failed to provide funding for the study.

Centralia Coal Plant:Under legislation adopted in 2011, the Centralia Steam Plant, Washington’s only coal-fired generator, was scheduled to permanently close in December 2025 and be replaced with natural gas-fired generation. Because the Centralia Plant was already scheduled to close, it was exempt from the CCA. In addition, the 2011 legislation exempted coal used in the Centralia Plant from the state’s sales and use taxes. On December 16, 2025, the Trump Administration’s Department of Energy issued an emergency order under Section 202(c) of the Federal Power Act directing that the Centralia Plant continue to operate using coal, and extended that order on March 13, 2026. HB 2367 is the legislature’s response to the Trump Administration’s orders. It repeals the Centralia Plant’s exemptions from the CCA and sales and use taxes. The bill aims to make the operation of the Centralia Plant economically infeasible despite the Department of Energy’s emergency orders.

Energy 

Washington Electric Transmission Authority:Fearing that Washington’s slow and unpredictable permitting process will prevent construction of renewable energy and transmission infrastructure necessary to meet the state’s ambitious GHG reduction goals, a number of permitting reform bills were considered and advanced in the legislative process, but ultimately failed. One major bill, SSB 6355, establishing the Washington Electric Transmission Authority, was enacted. That legislation aims to expedite the construction of electric transmission in the state, to accommodate renewable energy development needed to meet the state’s climate goals and the growing demand, especially from data centers. A transmission authority, based on models from several other Western states, was one of the recommendations made in B&D’s report to the Washington legislature on permitting reform for renewable energy and other green infrastructure.

The Transmission Authority, which a 10-member board of directors will govern and which the state must establish by 2027, will have several substantive functions, including:

• Periodically update a list of high-priority transmission corridors based on transmission studies conducted by planning bodies, utilities, and studies of the transmission system. The Washington Department of Commerce is required to develop an initial list of high-priority transmission corridors by October 30, 2027, based on the Western Transmission Expansion Coalition’s transmission needs studies.
• Establish partnerships with utilities, the Bonneville Power Administration (BPA), and other entities to develop transmission in high-priority transmission corridors.
• Construct and own transmission facilities as the initial developer, with the aim of selling those facilities for long-term operation to Washington utilities, joint operating agencies, BPA, an independent transmission developer, or an independent system operator. The legislation establishes a revolving fund to facilitate such construct-and-sell projects.
• Where a qualified transmission contractor is unavailable, as a “last resort,” plan, finance, build, and maintain electric transmission infrastructure.
• Act as a conduit for financing of transmission projects through the Washington Economic Development Finance Authority.
• Develop a consultation framework for Indian Tribes with traditional territories within Washington.
• Pursue non-wire alternatives to transmission construction.
• Support the development of community micro-grids.

Other Notable Energy Legislation:

• HB 1960 encourages renewable energy development through tax incentives, including a property tax exemption for renewable energy systems and battery storage systems that become operational after January 1, 2028, an excise tax on renewable energy facilities that become operational after that date, and new programs for the distribution of grants for renewable energy development in local communities and on Tribal lands.

• HB 1302 permits municipal utilities to waive interconnection charges for industrial symbiosis projects, in which waste energy or resources from one industrial process are used in a second process to reduce energy consumption and GHG emissions.
• HB 2296 directs the Washington Utilities & Transportation Commission to allow investor-owned utilities to invest in energy efficiency measures in single and multi-family rental housing, especially low-income housing, and to earn a return on those investments. The bill addresses a long-standing problem in utility rates: utilities earn a return on investments in generation and other physical infrastructure but do not earn any return on energy efficiency investments, which also tend to reduce utility revenues. Allowing utilities to earn a return on energy-efficiency investments may help reduce the disincentives to invest in efficiency.
• HB 2338 expands Washington’s low-income weatherization program, which provides energy efficiency measures for low-income housing to reduce energy burdens faced by low-income residents, to include “community scaled projects,” which the legislation defines as “a weatherization project that includes multiple dwelling units that are located in the same neighborhood or area where overlapping factors such as environmental, social, or economic conditions may adversely impact residents.”
• SB 6076 amends the competitive bidding statutes applicable to Washington’s Public Utility Districts and municipally-owned utilities to make it easier for these utilities to acquire renewable energy generation and related equipment and services.
• HB 2496 amends the statute governing Washington Energy Facility Site Evaluation Council (EFSEC) reviews of energy projects to set forth a specific process for Tribal consultations, which must occur within 90 days of EFSEC’s receipt of an application to approve a project and after the Tribe has been provided with full information about the proposed project.
• SB 5995 expands the authority of Washington ports by expressly allowing the purchase of zero and near-zero-emission equipment and infrastructure. The bill also prohibits ports from purchasing fully automated marine cargo handling equipment, aiming to protect port jobs. The bill represents efforts to shield the state’s workforce from potential economic repercussions of the pursuit of environmental goals.

Data Centers 

SB 6231 repeals the existing retail sales and use tax exemptions for refurbished data centers, effective July 1, 2026. This eliminates tax incentives for data centers to update, modernize, or replace server equipment or power infrastructure at their facilities. Exemptions for the purchase and installation of original server equipment or power infrastructure for new or expanded data centers will remain in effect, subject to certain requirements and limitations. Owners and operators of existing data centers will need to account for increased maintenance and improvement costs associated with the change in law.

Human Health & Consumer Products 

Washington’s enactment of SB 5975 revises the state’s lead-in-cookware framework for covered aluminum and brass cookware, utensils, and cookware components by clarifying key definitions and reworking compliance obligations and deadlines. The law maintains the 90 ppm lead limit for covered cookware manufactured on or after January 1, 2026, eliminates the 10 ppm limit that was scheduled to take effect in 2028, and creates a January 1, 2027 prohibition on the manufacture, sale, or distribution of covered products containing intentionally added lead. The law also establishes that no manufacturer may manufacture, sell, offer for sale, distribute for sale, or distribute for use in Washington aluminum or brass pots or pans, or aluminum or brass pot or pan components, containing lead or lead compounds above 50 ppm for items manufactured on or after January 1, 2030, or above 20 ppm for items manufactured on or after January 1, 2034.

Although the law gives cookware manufacturers, importers, distributors, retailers, and wholesalers a more workable compliance runway, companies should not treat it as a pause on compliance planning. Companies selling covered cookware in Washington should use the coming year to confirm product scope, manufacturing dates, material composition, and recycled-content issues. Companies should also track Ecology’s implementation of the law. SB 5975 designates cookware containing lead as a priority consumer product and requires Ecology to determine regulatory actions by June 1, 2032, and adopt implementing rules by June 1, 2033. For broader context on Washington’s chemical-in-product restrictions, see B&D’s news alert.

Electric Vehicles 

SB 6354 expands access to electric vehicles (EV) in Washington markets by allowing EV dealerships to sell directly in the state. Previously, only Tesla could hold vehicle dealer licenses in Washington. Now, other EV manufacturers can acquire these licenses and sell directly to customers. The bill creates a specific exception for manufacturers that: (i) are incorporated in the U.S.; (ii) have never entered into a franchise agreement with a motor vehicle dealer; (iii) had at least one Washington service facility by January 1, 2026; (iv) exclusively make battery EVs; and (v) had at least 300 of those vehicles registered in the state before January 1, 2026. If a manufacturer meets those criteria, they may own or operate a dealership selling those EV vehicles. Rivian and Lucid are the two EV manufacturers that currently meet these criteria.

Permitting Appeals Reforms 

HB 2426 intends to improve efficiency in permit appeals before the Washington Pollution Control Hearings Board (PCHB) by allowing alternative hearing compositions when all parties consent and the Board unanimously approves. Under the new law, (1) a qualified administrative appeals judge, (2) a panel that includes a qualified member of the Land Use Board or Shorelines Hearings Board, or (3) a single qualified member of the PCHB or the Land Use or Shorelines Hearings Boards can hear a permit appeal. The legislation preserves the PCHB’s general quorum rule but creates a specific exception for these alternative compositions, with an express directive to prioritize efficient use of administrative resources. The Governor has signed HB 2426, and it takes effect June 11, 2026.

Tribal Treaty Rights

HB 2554 repeals chapter 77.110 of the Revised Code of Washington (RCW), which made steelhead trout a national game fish protected under the Black Bass Act in 1984. The repeal comes after years of turmoil stemming from RCW 77.110’s confusing language and its negative impact on tribal-reserved fishing rights. This repeal provides Washington with the opportunity to promote state-tribal cooperative agreements in the management of marine life resources such as salmon, trout, and steelhead.

Maritime Safety

HB 2436 clarifies the requirements for oil tankers and escort tugs to prevent accidents. The bill generally prohibits oil tankers over 125,000 deadweight tons from proceeding east of the Discovery Island and New Dungeness line, unless authorized by the U.S. Coast Guard. If an oil tanker between 40,000 and 125,000 deadweight tons operates east of the same line, one or more tugs must escort it with aggregate shaft horsepower equal to at least 3,000, or 5% of the tanker’s total deadweight tons, whichever is greater. The bill does not impact the separate Rosario Strait rule, the existing exceptions and limitations for vessels providing bunkering or refueling services, or towed general cargo deck barges.

Conclusion

Companies operating in Washington should continue to monitor agency implementation, rulemaking, and legislative activity leading into the 2027 session. In particular, businesses should evaluate whether newly enacted legislation affects permitting strategies, energy procurement and infrastructure planning, product compliance obligations, facility operations, or participation in state climate programs. B&D will continue to track these developments and provide updates as Washington agencies implement the 2026 legislation and lawmakers revisit unresolved issues in the next session.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.