What's happening
This bill establishes standards and incentives for state procurement of low embodied carbon concrete and provides tax credits for related environmental product declaration analyses.
Why it matters
Establishes a “price discount” system for state concrete contracts. The bill requires state agencies to favor bids for concrete that demonstrate lower embodied carbon emissions, using verified environmental product declarations (EPDs). This means that concrete suppliers offering more climate-friendly products will get a price advantage (up to 5% discount) during the procurement process, potentially changing market competition and incentivizing greener production methods.
Promotes advanced carbon reduction and capture technologies. Suppliers that use carbon capture, utilization, and storage (CCUS) methods can qualify for an additional price discount (up to 3%), creating a direct financial incentive for companies to invest in and adopt leading-edge emissions reduction strategies.
Expands reporting and compliance requirements. Not only must prime contractors comply with these new selection standards, but subcontractors and private firms on state-funded projects must also document and report their EPDs, with penalties possible for non-compliance. This broadens the reach of the policy and embeds low-carbon practices deeper into the construction supply chain.
Offsets the costs of carbon transparency for producers. By providing targeted, time-limited tax credits to concrete, cement, and aggregate producers for the costs associated with conducting EPD analyses (up to $3,000 per facility for up to 8 facilities per company, expiring after 2022), the bill helps lower the financial barriers for producers to document and disclose their carbon footprints—potentially accelerating the shift toward low-carbon concrete in the industry.
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Who cares
Headline styles
Require Low-Carbon Concrete
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Promote Low-Carbon Concrete Use
In Assembly Committee · Governmental Operations · Sponsor Robert C. Carroll
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8965
IN SENATE
September 4, 2020
Introduced by Sen. KAMINSKY -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the state finance law and the tax law, in relation to implementing "The New York State Low Embodied Carbon Concrete Leadership Act"
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as "The New York State Low Embodied Carbon Concrete Leadership Act".
§ 2. Section 165 of the state finance law is amended by adding a new subdivision 9 to read as follows:
9. Special provisions for purchase of concrete.
a. For the purposes of this section, the following terms shall have the following meanings:
(i) "Concrete" shall mean structural and non-structural masonry, precast and ready-mix concrete building products.
(ii) "Concrete mix" shall mean a specific combination of components, including water, cement, aggregate and other materials which are used to produce concrete products. The structural properties of concrete mixes vary by strength, durability, curing time and other performance characteristics as a result of the defined proportions of their components and the methods used in their production.
(iii) "Portland cement" shall mean hydraulic cement produced by pulverizing clinkers in combination with one or more of the forms of calcium sulfate.
(iv) "Embodied carbon emissions" shall mean carbon emissions generated as a result of a material's production, including mining, refining, and shipping.
(v)"Global warming potential" (GWP) shall mean a numeric value that measures the total contribution to global warming from the emission of greenhouse gases, or the elimination of greenhouse gas sinks, that results from the production and/or utilization of a specific product or service.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13765-10-0
S. 8965 2
(vi) "Carbon dioxide equivalent" (CO2e) shall mean a measure used to compare the emissions from various greenhouse gases based upon their global warming potential.
(vii) "Low embodied carbon concrete" shall mean concrete that has been verified to embody lower carbon emissions, as measured by a GWP metric, compared to the baseline embodied carbon emissions of conventional concrete made with portland cement. Low embodied carbon emissions can be achieved through diverse methods and processes including, but not limited to: (A) higher energy efficiency at the level of the concrete and/or cement plant; (B) low carbon fuel substitution at the level of the concrete and/or cement plant; (C) local production resulting in reduced emissions from transportation; (D) the reduction of clinker content in the cement component of concrete, or the substitution of clinker content with lower carbon-intensive alternative materials like supplementary cementitious materials (SCMs) such as ground granulated blast furnace slag, fly ash, and recycled ground-glass pozzolan; (E) the capture and storage of point source CO2 emissions during the cement and concrete production process; or (F) the utilization and mineralization of carbon in concrete materials.
(viii) "Environmental product declaration" (EPD) shall mean product specific Type III EPDs that conform to ISO Standard 14025 and enable the numeric GWP and environmental impact comparisons between concrete mixes fulfilling the same functions.
(ix) "Carbon capture, utilization and/or storage" (CCUS) shall mean methods and technologies to remove CO2 from the flue gas and from the atmosphere, followed by recycling the CO2 for utilization and/or determining safe and permanent storage options for captured CO2.
(x) "Concrete delivery miles" (CDM) shall mean the distance in miles concrete mixer trucks travel from the production facility to the job site plus return travel.
(xi) "Low embodied carbon discount rate" shall mean a rate, set by the commissioner, applied to one or more of the bids for supply of concrete and based on the GWP derived from certified EPD analysis of each bid relative to all competitive bids. Estimated CO2e resulting from project CDM shall be assessed in addition to GWP derived from EPD analysis and factored into the discount rate.
(xii) "CCUS discount rate" shall mean a discount, set by the commissioner, applied to one or more of the bids for supply of concrete and based on CO2 capture and CO2 utilization methods employed by each respective bid.
(xiii) "Net zero CO2 emissions" shall mean a state whereby the total amount of CO2 utilized and/or captured during the concrete production process and/or mineralized in concrete materials are equal to the amount of CO2 emissions released during the production and utilization of that concrete.
(xiv) "Net negative CO2 emissions" shall mean a state whereby the amount of CO2 utilized and/or captured during the concrete production process and/or mineralized in concrete materials are greater than the amount of CO2 emissions released during the production and utilization of that concrete.
b. When letting contracts for the purchase of fifty cubic yards or more of concrete on behalf of facilities, transportation authorities and institutions of the state, solicitation specifications of the office of general services and any other agency, department, office, board or commission shall apply a low embodied carbon concrete price discount rate to offerer bids for the purposes of bid assessment and selection.
S. 8965 3
Discount rates will be applied to offerer bid prices on the basis of the GWP values for concrete products specified in offerer bids. GWP values shall be submitted by offerers in the form of certified EPDs. In addition to GWP values quantified in EPD submissions, the effect of CDM and the fuel usage/emissions factor thereof shall be considered. The CO2e emissions quantified for CDM shall be incorporated into the GWP values quantified in EPD. A price discount not exceeding five percent shall be applied to top performing bids that certify the lowest GWP values via EPD submission. The commissioner shall establish rules and guidelines whereby specific price discount rates shall be determined and applied to bids based on GWP performance.
c. For bids that have been certified by the commissioner to incorporate products and technologies that involve CCUS, the commissioner shall establish a supplemental price discount rate to be applied in addition to the low embodied carbon concrete discount rate defined in paragraph b of this subdivision. Bids that receive price discounts based on GWP performance and which incorporate certified CCUS products and technologies will be granted a supplemental price discount for bid assessment and selection purposes that shall not exceed three percent. The CCUS discount rate shall be added to the low embodied carbon discount rate and applied to the base bid price.
d. For bid opportunities that include multiple concrete mixes the GWP of all mixes will be proportionally weighted into a single GWP score that will serve as the basis for assessment and selection.
e. For state-funded construction projects that will be completed by private contracting firms that have been contracted by the state, and for which concrete will be procured for the project, such contractors shall comply with the selection standards and rules stipulated in this paragraph when subcontracting services from concrete providers. Such contractors shall report EPD documentation included in subcontract bids that demonstrate compliance with the standards and rules. The commissioner shall institute and issue guidelines pertaining to penalties for non-compliance by such contractors.
f. The commissioner shall issue regulations for the implementation of this subdivision, including but not limited to: (i) establishing guidelines that will assist agencies in determining which contracts meet the requirements in paragraph b of this subdivision; (ii) publishing such purchasing guidelines on the office of general services' website, disseminating such guidelines to agencies and training contracting personnel on implementing such guidelines; and (iii) providing for monitoring of implementation.
g. The commissioner shall complete and submit to the legislature an annual cost-benefit analysis of the low embodied carbon concrete procurement standard, once implemented, in order to quantify the budgetary impact of the program relative to the latter's carbon reduction impact.
§ 3. Section 606 of the tax law is amended by adding a new subsection (kkk) to read as follows:
(kkk) The environmental product declaration tax credit. (a) Definitions. For the purposes of this section:
(i) "low embodied carbon concrete" shall mean concrete that has been verified by environmental product declaration to embody lower carbon emissions, as measured by a Global Warming Potential (GWP) metric, compared to the baseline embodied carbon emissions of conventional concrete.
S. 8965 4
(ii) "environmental product declaration (EPD) analysis" shall mean product specific Type III EPDs that conform to ISO Standard 14025 and enable global warming potential (GWP) and environmental impact comparisons between products fulfilling the same functions.
(b) Allowance of credit. Producers of concrete, as well as the producers of the major concrete components, cement and aggregate, that are taxpayers shall be allowed a credit, to be computed as provided in this subsection, against the tax imposed by this article, to compensate for financial burdens incurred as a result of EPD analyses undertaken to determine the product-based embodied carbon emissions of one or multiple concrete products produced at one or multiple plants that such taxpayer owns and operates.
(c) Amount of credit. The credit authorized by this subsection shall not exceed the lessor of: (i) the full costs incurred for an EPD analysis of a single concrete, cement, supplementary cementitious materials, and/or aggregate production facility; or (ii) three thousand dollars, and may be claimed for the costs of completing EPD analyses at up to eight facilities owned by the same producer in a single tax year by a single taxpaying entity in tax years two thousand twenty-one and two thousand twenty-two. Tax credit eligibility will expire at the end of two thousand twenty-two.
(d) Application of credit. The credit allowed under this subsection for any taxable year shall not reduce the tax due for such year to less than the fixed dollar minimum amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this chapter. However, if the amount of the credit allowed under this subsection for any taxable year reduces the tax to such amount or if the taxpayer otherwise pays tax based on the fixed dollar minimum amount, any amount of credit thus not deductible in such taxable year shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
§ 4. This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to taxable years commencing on and after such date. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the state finance law and the tax law, in relation to implementing "The New York State Low Embodied Carbon Concrete Leadership Act"
Purpose or general idea of bill
To establish a low embodied carbon procurement standard for concrete used in public construction projects that will rapidly incentivize emis- sions reductions throughout the concrete production process. The low embodied carbon procurement standard will leverage the State's substan- tial concrete purchasing power to catalyze low carbon alternative meth- ods and products in the concrete and cement industries as a whole. The standard would also establish New York as a leader in the emerging low embodied carbon concrete sector, resulting in new economic activity and job creation.
Summary of provisions
Section 1 names this Act "The New York State Low Embodied Concrete Lead- ership Act."
Read the full memo (1,808 words)
Section 2 defines terms
Section 2b requires that facilities, transportation authorities and institutions of the state, solicitation specifications of the office of general services and any other agency, department, office, board or commission mandate provisions including the incorporation of low embodied carbon emissions selection standards that are governed by the Global Warming Potential (GWP) quantified through certified Environ- mental Product Declaration (EPD) for each concrete mix proposed in bids by offerers. For the purposes of bid assessment, scoring and selection, a price discount will be applied to bids that are certified to have the lowest GWP values. The maximum discount to be applied for the lowest GWP bids will not exceed 5%. applicable performance specification standards in force in the State of New York.
Section 2c describes the application of supplemental price discounts for bids that incorporate products and processes that support the capture, utilization and/or storage of carbon dioxide (CCUS). The CCUS supple- mental price discount reflects the necessity for such products and proc- esses to fully decarbonize concrete and cement production by the year 2050, given the inherent and substantial carbon intensity of aspects of cement production that cannot be significantly mitigated through cement substitution, low carbon energy substitution or increased efficiency. The State will establish criteria for certifying CCUS products and proc- esses that are eligible for the supplemental CCUS price discount.
Section 2d stipulates that bid opportunities that include multiple concrete mixes will aggregate the GWP into a single score that will serve as the basis of comparison. Additionally, the concrete products must meet or exceed all
Section 2e stipulates that the low carbon procurement standard rules defined in Section 2b and 2c shall be complied with by private firms contracted by the State to complete State funded construction projects that involve the utilization of concrete.
Section 2f states that the commissioner will issue, publicize and disseminate regulations for implementation and guidelines for the evalu- ation of contracts, and provide for monitoring of implementation.
Section 2g stipulates that the Commissioner will submit a report annual- ly to the legislature analyzing the costs and benefits of the low embodied carbon concrete procurement standard pertaining to fiscal impact and the State's carbon reduction goals.
Section 3 amends section 606 of the tax law to establish a tax credit to compensate for the costs incurred by concrete and concrete component manufacturers to undertake Environmental Product Declaration (analysis) at their manufacturing plants.
Section 3b defines terms and explanations for elements important to the understanding of the EPD tax credit.
Section 3b states which types of commercial entities are eligible to avail the EPD tax credit.
Section 3c states that i) the maximum tax credit amount that shall be availed by commercial entities is the lessor of the full cost of EPD analysis or $3,000; ii) the maximum number of plants that a single commercial entity may be permitted to avail the tax credit for during a given tax year is eight; and iii) that the tax credit may be availed for EPD analysis procured during tax year 2021 and tax year 2022.
Justification
More than 10 billion tons of concrete are produced globally each year, making it the second-most used substance on earth after water. The production of concrete's core ingredient cement accounts for up to 8% of total global emissions. To bring the concrete and cement sectors in line with the targets agreed upon in the Paris Agreement, annual emissions must. fall by 16% by 2030. However, current trajectories project that demand for both materials could increase by as much,as 23% by 2050. Under this business as usual scenario, production escalation on this scale will release extraordinary levels of CO2 during the next three pivotal decades.
Therefore reducing the embodied carbon of concrete - a measure of emis- sions generated during the production process of materials before they are utilized - is a critical front in the collective global effort to preserve the climate. At the same time, concrete's unique potential to permanently store and mineralize carbon must be unlocked and advanced through both private and public sector commitments. Indeed, deep reductions in cement-based emissions paired with technological inno- vations that maximize concrete's carbon storage potential could ulti- mately result in carbon negativity to an outcome in which less carbon is emitted in concrete production than is permanently secured in its utili- zation or storage. Given the present day volume of concrete utilized annually and the rate of growth projected over the coming decades, transforming concrete from a net carbon source to a net carbon sink would have highly meaningful and quantifiable implications for the climate. The New York State Low Embodied Carbon Concrete Leadership Act proposes a new procurement standard for public construction projects that would place our state firmly in a leading position to bring about this transi- tion. And this is a role that New York is exceptionally well positioned to assume given the bold commitments established by the Climate Leader- ship and Community Production Act of 2019, and the size and dynamism of the state's economy and construction industries. Indeed, the proposed bill would help advance the ambitious goals and principles of the CLCPA, while expanding its reach to encompass a major source of emissions currently left unaddressed. As a major purchaser of concrete, a procure- ment standard of this kind would provide a powerful market signal to concrete and cement manufacturers to pursue emissions reductions throughout the concrete supply chain. Further, because many well-establ- ished emissions reduction measures that would be incentivized by this policy are made at the manufacturing plant level, the State's actions would have an immediate influence over the emissions profile of concrete and cement supplied to the private sector at large.
The legislation's objectives align with the CLCPA's broad emissions reduction targets, but also specifically with provisions related to the 15% of emissions reductions that will be achieved either through offsets or by carbon dioxide removal (CDR) from the atmosphere. Enhancing concrete's capacity to utilize and permanently mineralize high levels of carbon in its mass is the goal of several cutting edge research initi- atives and start up firms today, but in the future could represent a scalable and standard feature of this incredibly common commodity. As a promising medium for carbon storage, concrete would create a sink for carbon sourced from capture and storage technologies at difficult to decarbonize industrial facilities (such as cement), as well emerging carbon removal technologies such as Direct Air Capture (DAC). The legis- lation's competitive mechanism will continuously drive innovation in this direction,and includes a special provision that incentivizes the adoption and utilization of carbon capture, utilization and/or storage technology (CCUS).
While establishing the carbon emissions of concrete as a definitive factor in the bid decision making process, the legislation would also cap allowable price premiums for low embodied concrete, thus limiting fiscal impact on the State of New York and its taxpayers.
Finally, to further incentivize participation by concrete manufacturers, the legislation introduces a time limited tax credit for eligible local firms. The credit would offset financial burdens incurred by manufactur- ers in completing Environmental Product Declaration (EPD) analyses, which are required for quantifying the embodied carbon emissions of concrete products. Given that 1. the tax credit is scheduled to expire in four years following program initiation; 2. EPD analyses are competi- tively priced ($2,000 - $4,000 per plant on average); and 3. The limited number of concrete manufacturing companies operating in the state, the fiscal impact. of the credit will be modest relative to the market impact that it will catalyze.
Prior legislative history
This is a new bill
Fiscal implications
To be determined. The one-time environmental product declaration tax credit would be made eligible for two tax years to fewer than two-hun- dred concrete and concrete component manufacturing plants operating in New York State, and would be capped at $3,000 per plant. If fully subscribed, the full fiscal impact of the tax credit would not exceed $600,000 during the two-year eligibility period. However, given that full subscription by 100 per cent of in-state eligible firms is highly unlikely, this figure should be considered a maximum rather than proba- ble fiscal impact.
The low carbon concrete price discount and the supplemental CCUS price discount defined in Section 2b and Section 3b, respectively, are projected to result in negligible fiscal impact or no fiscal impact at all. The price discount mechanism is designed to create an incentive for offerers that links competitiveness for state contracts to superior GWP performance. It is not designed to perversely encourage offerers to escalate bid pricing, nor does it entail the direct or indirect transfer of payments, in such forms as rebates or tax credits, to offererers as compensation for incorporating low carbon concrete into bid proposals. Offerers, unaware of the prices proposed by other offerers, remain high- ly incentivized to submit bids that are as price competitive as possi- ble. Further, market analysis supports that many high impact, market ready carbon reduction processes and products that would increase GWP performance and therefore bid competitiveness - including many forms of cement substitution and carbon utilization - are not strongly associated with premium pricing. Thus, offerers are incentivized to adopt low carbon concrete processes and products that are market ready and cost competitive in order to increase their competitiveness for state contracts vis-a-vis other offerers. applied for assessment and scoring purposes only, and does not entail the transfer of any direct financial incentive to high GWP performing bidders. All bidders remain incentiv- ized to submit bids that maximize cost competitiveness.
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to taxable years commencing on and after such date. Effective immediately, the addition, amendment and or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
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