Washington state is giving $5 million to a massive aluminum production plant in Spokane. Why?

OLYMPIA – The state of Washington will give nearly $5 million to the Kaiser Aluminum plant in Spokane Valley to help replace two 1943-built steam boilers in an effort to reduce the massive facility’s greenhouse gas emissions.

As part of the deal, Kaiser Aluminum will need to match every dollar sent over by the state to replace the two boilers, which are estimated to set the company back by $4.8 million apiece.

The state’s half of the bargain comes from the Climate Commitment Act, a 2021 environmental law spearheaded by Gov. Jay Inslee that established a carbon credit auction to raise money and limit greenhouse gas emissions from large oil and energy companies. The first carbon auction raised $1.5 billion to go toward “climate-resiliency programs, clean transportation, and addressing health disparities,” according to the state’s website.

Kaiser Aluminum is headquartered in Franklin, Tennessee, and operates 15 industrial facilities across the United States. In 2020, the company reported revenue surpassing $1.1 billion. The aluminum giant’s Spokane-area plant employs an estimated 1,000 people in the Spokane region, said state Sen. Mike Padden, R-Spokane Valley.

As part of the Climate Commitment Act, the state sends Kaiser and other large corporations money to help reduce pollution and to offset heightened costs they have incurred under the state’s landmark climate policy. This is done in the hopes that large companies such as Kaiser will stick around in Washington and not pack up shop to move to a region with less stringent pollution regulations.

Once installed, the new boilers at Kaiser will reduce the plant’s yearly greenhouse gas emissions by about 13,000 metric tons. Reducing that quantity of emissions is equivalent to eliminating the total annual CO2 pollution emitted by more than 3,000 average gasoline-powered cars.

Kaiser Aluminum has not begun installation of the two new boilers, company officials said earlier this year. The company will be required to buy the new boilers by 2027 for its deal with the state to stand.

Kaiser Aluminum is an example of what the state designates as an “Emissions-Intensive, Trade-exposed entity,” said Mike Faulk, spokesperson for Inslee’s office.

That designation is given to businesses that get most of their emissions allowances for free under the state’s carbon auction program, “with the intention of convincing them to decarbonize over time rather than relocate to a state with no carbon limits.”

Faulk said the money sent to Kaiser is an example of the “ways the state is helping these businesses achieve decarbonization over time,” adding that the funding aligns with the broader intent of the Climate Commitment Act.

In an emailed statement, a Kaiser spokesperson said the money from the state will help the company “facilitate ongoing investment” at the company’s local plant known as Trentwood, “on top of existing investments that will continue to reduce the carbon intensity of our products and upgrade our facility.”

“Since 2006, Kaiser has invested approximately $400 million toward improving the overall efficiency and the modernization of the (Spokane Valley) facility,” company manufacturing spokesperson Kyle England wrote.

State Sen. Mark Mullet, D-Issaquah, said he fully supports the state sending $5 million to the local plant. The investment is predicted to garner the biggest carbon pollution reduction in terms of climate policy dollars spent by the state, he added.

“I think a lot of people have this pushback, saying, ‘Why are we giving private industry any money?’ ” said Mullet, a Democratic candidate for governor, in an interview. “Well, this is the whole point. We still need aluminum. We can’t do without it.”

Across the aisle, state Rep. Mike Volz, R-Spokane, echoed Mullet’s praise of the state bankrolling Kaiser’s new boilers, saying the 2021 environmental policy didn’t give the company credit for its past steps to be greener.

“I met with the Kaiser people a couple times and went on at least one tour,” Volz said. “Kaiser has done a fantastic job of committing to an environmentally clean operation.”

Washington has environmental standards that are “far, far more strict” than any other state, Volz added. “The risk is they can match $5 million, or they can spend money and move somewhere else.”

More on the Climate Commitment Act

For months, the Climate Commitment Act has sparked heated debates between policy critics who blame high gas prices on the legislation and policy supporters who say big oil companies and a complicated economy are to blame. Voters in November will choose whether to repeal or uphold the climate policy, thanks to a citizen-driven ballot initiative that amassed hundreds of thousands of signatures.

Supporters of the Climate Commitment Act point to its promise for a future of fewer carbon emissions in the state and furthered responses to climate change. Revenue from the program is earmarked to go back into green state programs such as buying electric school buses and making public transit free for children.

Critics of the climate policy blame the new law for driving up the cost of gas and food at the expense of working-class Washingtonians. Some argue that the program doesn’t make sense while some nearby states, such as Idaho, don’t have any type of carbon auction.

Washington’s general election is Nov. 5.

Ellen Dennis can be reached at (206) 486-5723 or by email at ellend@spokesman.com.