Decarbonization Report - Recommendations and Follow Up Actions - Hawai‘i State Energy Office

Economy-wide Recommendations

Sector, Decarb Report Chapter(s)	Recommendation	Rationale
HRS 225P-5 Goals, Chapters 3-4	Maintain the economy wide emissions reduction target of 50% by 2030.	While challenging to achieve, the analysis shows this ambitious schedule can be met.
Inventory and GHG Accounting, Chapters 3-5	Consider an additional consumption-based inventory to supplement the production-based inventory to more holistically account for imported emissions.	Resource shuffling and underestimating emissions from imports was a major concern of many stakeholders.
Inventory and GHG Accounting, Chapters 3-5	Update inventory requirements in HRS §342B-71 to include mandatory emissions reporting requirements for large emitters, and ensure stakeholders are adequately engaged in inventory development and emissions tracking. As part of this, a technical working group comprised of agencies with regulatory authority over emitters should develop a mandatory emissions reporting requirement/regulation for large energy users. All input data and spreadsheets from the inventory should be publicly available.	1) The GHG inventory serves as the primary accounting mechanism tracking progress toward decarbonization goals. 2) Mandatory emissions reporting for large emitters will improve the data quality of the GHG emissions inventory, and create a regulatory grade emissions accounting and reporting rules that could become the basis for other supportive policies, such as a carbon price (e.g. carbon tax and dividend or a cap and invest program).
All Sectors, Chapter 1	Ensure regulating agencies are adequately staffed and compensated to ensure thorough expert, timely approvals, and robust enforcement.	Regulatory oversight is a critical component to decarbonization necessary for both consumer protection (e.g. energy prices), safety (e.g. building and electrical codes), and resource protection (e.g. water and land use); however, many of the agencies tasked with protecting public resources expressed an overwhelming staffing shortages and turnover – resulting in slow review timelines.
Energy (All Sectors), Chapter 1	Modify the barrel tax to include carbon intensity thresholds that decrease over time, as lower carbon intensity fuels become commercially available the tax should increase. Any tax or surcharge to encourage behavior change must include policies to support the availability of cost-effective alternative options. Surcharge funds should be used for lower-carbon infrastructure development and dividends should directly flow to income qualifying residents.	A carbon surcharge incentivizes behavioral changes when appropriate enabling infrastructure (e.g. robust transit) is available to residents and visitors. “Sin taxes” are regressive and must include protections for low- and moderate-income households. Dividends are viewed by economists as a way to offset the day-to-day cost increases of a carbon surcharge. Due to the carbon footprint of tourism, a carbon surcharge should ensure tourism carries a fair share of the burden.

Sector, Decarb Report Chapter(s)	Recommendation	Rationale
Workforce, Chapter 1	Support additional energy literacy in grade and high schools - work with non-profit partners in the state, focus on the nexus between IT, energy, and analysis.	In the decarbonization scenarios modeled in this report, the energy sector of Hawai‘i is transformed in a matter of decades. Solar, wind, and storage are deployed at an unprecedented rate, sales of internal combustion engine vehicles are phased out and replaced with new zero emissions vehicles, buildings in the state undergo widespread retrofits with more efficient and electrified equipment, and the jet fuel needed for air travel is provided by increasing quantifies of sustainable aviation fuel (SAF). All these changes will have a profound impact on the number and types of jobs needed.
Workforce, Chapter 1	UH and UHCC scholarships and funding for credit and non-credit training; career training navigators and employer intermediaries are critical to recruit sufficient trainees for each training session.
Workforce, Chapter 1	Adjust state tax credits to incentivize quality jobs; e.g., recent federal changes for wage thresholds, tax incentives for employers that provide paid internships, state funds to pay for internships in private companies.
Workforce, Chapter 1	Modify future energy procurements to prioritize bids that commit to providing quality local jobs; Hawaiian Electric Stage 3 RFP treats “local jobs, payment of prevailing wages, or improving community infrastructure“ as simply “other benefits”.
Workforce, Chapter 1	Tax incentives, permitting priority for the development of training facilities.
Workforce, Chapter 1	Explore opportunities to cross-train PV and efficiency skills for construction workers, which can result in more steady work and better delivery of state-funded incentive programs.

ENERGY SECTOR RECOMMENDATIONS

Sector, Decarb Report Chapter(s)	Recommendation	Rationale
Inventory and GHG Accounting, Large Stationary Sources, Chapters 2-4	As part of updating emissions reporting under HRS 342B-72, make related updates to HAR §11-60.1-201, Air Pollution Control: 1) For “affected sources”, GHG emission reduction plans should be electronically submitted and publicly available on DOHs website. 2) Incorporate data from large stationary sources in the inventory.	HAR 11-60.1 has not been updated since the passing of Act 238 to reflect interim GHG reduction targets. Best practice calls for facility level data when available.
Buildings and Infrastructure – Energy Efficiency, Chapters 2-4	Extend, update, and strengthen supportive policies for energy efficiency, such as the Energy Efficiency Portfolio Standard (EEPS). “Net zero”- ready building energy codes can reduce embodied carbon in buildings and reduce “code fatigue” among developers. Building Performance Standards can guide the use of public funds that support energy efficiency retrofits for existing buildings.	In both this report and similar national strategies, such as the “The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050,” near-term action on energy efficiency provides the foundation for cost-effective and on-schedule decarbonization. Energy smart buildings reduce total cost of ownership, and studies show that energy efficient homes reduce mortgage default rates. Energy efficiency savings in buildings represent a significant source of energy savings in the Hawai‘i PATHWAYS scenarios, presented in Chapters 4 and 5 by 2030. Smart energy consumption also reduces the capital expenditures on energy generation and delivery infrastructure. Achieving this level of energy efficiency will require new policies and programs.
Buildings and Infrastructure – Energy Efficiency, Chapters 2-4	The state can introduce “Buy Clean” policies to favor bids that use the lowest carbon options available, and require all public buildings to reduce energy waste by meeting LEED gold or better, using ENERGY STAR appliances, and including distributed renewable energy on rooftops or over parking structures. Reporting and emissions standards for large commercial buildings could achieve emissions reductions over time. Grid-connected appliances, such as heat pump water heaters, can play an important role in grid flexibility.
Electricity Generation, Chapters 2-4	Support the development of utility-scale renewable energy projects for selected Stage 3 projects and forthcoming IGP procurements, particularly paired solar projects. Consider an interagency task force under HRS §196-1.5 to regularly monitor development timelines, permit status, and identify potential roadblocks.	The regulatory and permitting process, with a mix of state and county jurisdiction, has been identified as a barrier to completing projects in a timely manner at both the state and county level. Delays in project approvals result in a domino effect, potentially impacting fossil fuel retirement timelines.
Electricity Generation, Chapters 2-4	Identify permitting improvements to meet RPS timelines, facilitate community benefits, and explore dispute resolution outside of court.
Electricity Generation, Chapters 2-4	Require efficiency improvements to power plants that use fossil fuels to ensure that power plant replacements significantly reduce energy waste, which will save fuel cost and emissions.	Because fuel costs are passed through to consumers, there can be a lack of incentive to invest in power plant efficiency. The state should require new fossil fuel burning plants to have combined cycle capabilities, as well as favor designs that can be retrofitted to use lower carbon intensity fuels.
Electricity Generation, Chapters 2-5	Support the co-development of renewable energy with agriculture through county property tax incentives (e.g. agrivoltaics are eligible for agricultural property tax rates).	Certain biofuel and biomass energy sources exhibit lifecycle emissions higher than that of fossil fuels when evaluated “farm to pump.” While the PUC is required to evaluate lifecycle emissions, a carbon intensity threshold would clarify carbon requirements for all parties involved. Setting a maximum carbon intensity threshold does not negate the need for appropriate evaluation under HRS §269-6.
Electricity Generation, Chapters 2-4	Investigate state energy resources and keep options open for new technology adoption (e.g. geothermal slim hole drilling) and phased transition plans to progressively cleaner fuels and generation options.	Improving our understanding of Hawai‘i’s potential energy resources could substantially reduce the need for high cost and high-risk renewable energy alternatives, including biofuels that exhibit uncertain and variable emission reduction benefits. Accelerated phase-out of fuel oil and diesel is necessary to reduce carbon intensity and costs.
Energy – Fuels, Chapters 3-5	Expand the Renewable Fuels Production Tax Credit. Require renewable fuel to meet an established lifecycle carbon intensity threshold. Lower the BTU qualifying threshold. Remove or extend the 10-year eligibility limit.	Alternative fuels are still not cost-competitive with conventional fuels, and current production does not meet demand. Incentivizing local production through the existing RFPTC can boost biofuel production in state and minimize need for imports. Adjustments to the RFPTC should balance the economic benefits of local production with cost to taxpayers.
Ground Transportation	Establish a VMT reduction target for total VMT applicable to light-duty passenger vehicles.	Similar to the power sector, energy efficiency in transportation is the cheapest way to decarbonize. It saves money day-to-day and reduces the energy delivery infrastructure needed. VMT reductions provide an important source of GHG emissions in the Hawai‘i PATHWAYS modeling. Establishing a target and tracking change are the first steps in effectively improving transportation energy efficiency.
Ground Transportation	Require rental car companies to report their VMT separately (based on annual aggregated odometer readings).
Ground Transportation	Pursue incentives for and streamline permitting for public EV charging infrastructure.	Adequate public charging structure is needed to ensure people without access to home charging can use electric vehicles, whether owned or used through car-share programs.
Ground Transportation	Incentivize hotels to use electric fleets for shuttle buses and to offer shared shuttle services to and from the airport, as well as popular tourist destinations.	Incentivizing alternative modes of transportation for tourists can relieve traffic congestion while reducing emissions.
Interisland Transportation	Continue to pursue alternative mechanisms to interisland travel; Act 226 (2023) allows for further exploration in this space.	Reduction in interisland emissions and adoption of alternative modes of transportation between islands can reduce aviation emissions.
Marine Transportation	Develop a port emissions inventory, using EPA Port Inventory Guidance to gain a better understanding of bunker fuel usage, energy consumption, and mitigation actions feasible for the ports.	We do not have a granular understanding of emissions from Ports.
Air Travel, Visitor Arrivals	Work with hotels to encourage longer stays on the island - discounts for multi-day stays, and higher costs for one and two-day visits.	Increasing length of stay can reduce emissions from air travel without impacting the economic benefit tourism brings.

NON ENERGY SECTOR RECOMMENDATIONS

Sector, Decarb Report Chapter(s)	Recommendation	Rationale
Agriculture, Forestry, and Other Land Use	Invest in infrastructure that facilitates climate-smart implementation practices, and increase access to resources for land stewardship and agricultural production. 1. Provide longer-term leases, up to 30 years, for farmers willing to commit to implementing appropriate climate-smart practices. 2. Set up a lease program for producers interested in producing locally sourced soil fertility and amendments that support climate-smart practices such as compost, biochar, mulch, fish/ bone meal, etc. 3. Provide access to specialized machinery that facilitates the implementation of climate-smart practices (e.g., crimpers, compost spreaders, waste gasifiers, etc.) 4. Support the development of on-island slaughterhouses to avoid the export of live feedstock.	The agricultural sector is typically a source of emissions, but can act as a sink. Shifting soil management and fertilizer application; adopting climate smart agricultural practices, and incentivizing landowners and lessees to adopt these practices can reduce emissions from the agricultural sector, and increase sink capacity. Two primary barriers exist for farmers wanting to adopt these practices: 1) Access to land and 2) the access to machinery to facilitate the implementation of climate smart practices.
Agriculture, Forestry, and Other Land Use	Fund programs (state and community-led) that address fire prevention on abandoned lands and in the wildland-urban-interface. Consider: · Invasive species removal (particularly fire-prone species). · Restoring fire-adapted lands. · Programs to place abandoned agricultural lands back in agriculture or active management, including the potential for biofuel feedstock production. Prioritize watershed and existing forest protection programs · Ungulate, invasive species, and pathogen management programs (DOFAW and Watershed Partnerships). · Continue urban forest initiatives	Forest fires are expected to be more prevalent with more prevalent drought conditions in the state, exacerbated by the climate crisis. Forest fires are also a contributor to climate warming emissions and can reduce the sequestration potential of NWL.
Industrial Processes and Product Use, Chapter 2-4	Pass the Refrigerant Management Bill, proposed 2023 legislative session to reduce emissions from high global warming potential refrigerants (HFCs).	Refrigerants have high global warming potential and managing their use, handling, and disposal is critical to reducing emissions in this sector.

RESOURCES

View Hawai‘i Pathways to Decarbonization Final Act 238 Report

Submit Comments on the Act 238 Report

Decarbonization Main Page

Decarbonization – Results and Key Findings

Decarbonization – Development, Assumptions, and Methods

PATHWAYS Output Data – Excel Spreadsheet

>