Summary/Abstract
This bill establishes a state-funded reverse auction to purchase carbon dioxide removal projects to help achieve greenhouse gas reduction goals, with auction funds derived from a fee on aviation fuel. The bill adds a new article 76 to the Environmental Conservation Law authorizing the New York State Department of Environmental Conservation (DEC) to conduct an annual reverse auction to purchase carbon dioxide removal (CDR) projects. In a “reverse” auction, the buyer puts out a request for a required good or service, sellers submit bids for the good or service, and the seller with the lowest bid wins the contract to provide the good or service.
Commencing in 2025, DEC will conduct the reverse auction from April 1 to June 30 of each year. At least 60 days prior to the auction, DEC must establish a CDR target for that auction year. The CDR target must be no less than 0.1 million metric tons in the first auction year and must be increased in each subsequent year. The maximum average price per ton of CDR will be $350 in the first auction year and decrease by five percent each subsequent year. The minimum bid for 80 percent of the CDR target cannot be less than 10,000 tons of CDR, and the minimum bid for 20 percent of the removal target cannot be less than 1,000 tons of CDR. All CDR must be achieved within ten years of the contract between the bidder and DEC.
Prior to the initiation of the reverse auction, DEC must annually publish a survey of CDR opportunities in the State, including a review of existing and potential CDR projects in the State. The survey must incorporate methodologies that provide for direct engagement between DEC and disadvantaged communities. Funding for the authorized five-year reverse auction period will be from State revenues accrued in preceding tax years from certain reinstated tax revenues on aviation gasoline imported by a petroleum distributor registered under Article 12-A of the Tax Law.