Drafter
Clerk 11/05/2025
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AN ORDINANCE relating to the sale of environmental attributes held by the county; authorizing the county to enter into an agreement for the sale of environmental attributes related to biomethane produced at the Cedar Hills regional landfill to Karbone Inc.
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STATEMENT OF FACTS:
1. The solid waste division of the department of natural resources and parks operates the Cedar Hills regional landfill, located in Maple Valley, Washington, which receives over 800 thousand tons of municipal solid waste each year.
2. The breakdown of organic matter at the landfill generates landfill biogas as part of the natural decomposition of waste over time when buried underground. Landfill biogas generally is composed of 45% to 60% methane.
3. Landfill biogas can be processed to generate a high concentration methane gas that meets natural gas pipeline standards. Purified methane gas is also known as renewable natural gas, which is a direct substitute for geologic natural gas. The renewable natural gas includes biomethane gas molecules.
4. In addition to the biomethane energy content of the renewable natural gas, the beneficial use of the landfill biogas as a byproduct of the landfill decomposition process provides significant greenhouse-gas reduction and other environmental benefits when compared to the consumption of fossil fuel-derived natural gas. Those environmental benefits, as an extension of the energy content, are recognized as environmental attributes.
5. Environmental attributes related to renewable energy or other characteristics of a resource that are distinguished from the biomethane commodity can have financial value related to both mandatory environmental requirements and voluntary markets.
6. Bio Energy (Washington), LLC, ("Bio Energy") constructed a facility at the Cedar Hills regional landfill that can purify landfill biogas into biomethane. In 2011, Bio Energy began to purify landfill biogas from the Cedar Hills regional landfill into pipeline-quality biomethane and inject the gas into the natural gas pipeline adjacent to the landfill.
7. Ordinance 19959 authorized the purchase of the landfill gas processing facility by King County from Bio Energy, and resolved all legal disputes between Bio Energy and King County.
8. The local natural gas utility, Puget Sound Energy ("PSE"), through Ordinance 19967 authorized the purchase of all biomethane gas produced at the Cedar Hills gas processing facility.
9. Ordinance 19967 between King County and PSE also includes specified annual purchases by PSE of environmental attributes associated with biomethane gas produced by the Cedar Hills gas processing facility, at volumes below the total estimated available environmental attributes associated with the Cedar Hills pipeline quality biomethane production.
10. Karbone Inc. ("Karbone") has been a service provider for energy transition and environmental commodity markets since 2008. Karbone acts as a marketer that buys and sells commodities across energy markets to meet client financial and risk management needs. Through energy markets, Karbone transacts on average over 2 billion US dollars per year, including over 250 million gallons of renewable fuels and associated environmental attributes through both regulatory compliance and voluntary markets.
BE IT ORDAINED BY THE COUNCIL OF KING COUNTY:
SECTION 1, Findings:
A. Under K.C.C. 4.56.250, the provisions of K.C.C. chapter 4.56 are waived for sales or transfers of ownership, rights, title, or interests in emissions credits, offsets or allowances or renewable energy certificates, credits, or benefits, environmental air quality credits and any similar rights, title or interests held by the county when such sales are in the best interests of the public and are authorized by the King County council.
B. A sale to Karbone Inc. ("Karbone") of a portion of the environmental attributes associated with the Cedar Hills biogas processing facility is in the best interests of the public because the market for the sale of environmental attributes associated with biomethane is highly specialized and is subject to market variability. The agreement with Karbone will facilitate the sales of these environmental attributes into different markets based on market conditions. The agreement with Karbone will generate revenue that can be used to offset debt and other costs associated with operating the Cedar Hills biogas processing facility, and the agreement will support the decarbonization of the natural gas supply system in King County and in other geographic areas that purchase environmental attributes from King County.
SECTION 2. The King County executive is hereby authorized to execute a base contract and all related documents for the sale and purchase of environmental attributes with Karbone Inc. substantially in the form of Attachment A to this ordinance.
SECTION 3. Moneys from the sale of environmental attributes under section 2 of this ordinance shall be allocated to the solid waste division. The revenue from the environmental attributes shall be used to offset debt and operating costs associated with the acquisition of the Cedar Hills biogas processing facility. Revenue beyond that needed
for the debt service and operating costs may be spent on other solid waste division purposes.