Two Washington state senators introduced a bill Monday to provide farmers and haulers of agricultural products financial relief from the costs arising from the state’s new cap-and-trade program.

Washington’s cap-and trade program went into effect this year, and its first auction on Feb. 28 raised almost $300 million in revenue for state climate and energy programs. The second quarterly auction is scheduled for May 31. 

In 2021, the Democrat-controlled Washington legislature passed the nation’s second cap-and-trade law along party lines, with the minority Republicans citing farmers’ higher fuel prices as one reason for their opposition.

Oil and petroleum producers are among the companies that need to collect allowances and reduce their emissions.

Democratic senators Mark Mullet and Joe Nguyen on Monday introduced Senate Bill 5766, which would require the state to set up a remittance program by Jan. 1, 2024, for farm fuel users and freight haulers of agricultural products.

“When we passed the (cap-and-trade law), we made a promise to Washington’s farmers to protect them from additional costs that could potentially be passed on from the bill. We need to keep that promise,” Mullet said in a press release. “We hoped this was going to be addressed in implementation, but we heard clearly in budget hearings that this issue still needs to be addressed. This bill is a small, reasonable step that keeps our promise to our farmers.” 

Under the program outlined in the bill, the targeted beneficiaries would submit receipts every quarter showing purchases for fuel used for farming and transporting agricultural goods. 

“An approved application for remittance … is eligible for a remittance equal to the auction settlement price in effect for the calendar quarter in which the fuel was purchased multiplied by eight-tenths of one percent and the number of gallons in the remittance application,” the bill states.

At the Feb. 28 auction, carbon allowances representing 1 ton of emissions settled at $48.50, which would translate to a refund of 38.8 cents per gallon for the current quarter.

“Our farmers are critical contributors to our economy, and they are being unfairly targeted by big oil companies. It was always our intention to exempt their fuel from the (cap-and-trade) guidelines,” Nguyen said in a statement.

The bill is now in the Senate’s Ways & Means Committee.