California Readopts Low Carbon Fuel Standard
The California Air Resources Board has re-adopted a low carbon fuel standard, which requires a statewide 10 percent reduction by 2020 in the carbon intensity of transportation fuels.
The low carbon fuel standard is a key piece of California’s plan to enact Gov. Jerry Brown’s mandated 50 percent cut in petroleum use by 2030, says CARB chair Mary D. Nichols.
The LCFS requires that transportation fuels used in California meet a baseline target for carbon intensity. That target is reduced each year. If a product is above the annual carbon intensity target, the fuel incurs deficits. If a product is below that target, the fuel generates credits that may be used later for compliance, or sold to other producers who have deficits. So far, fuel producers are over-complying with the regulation.
Carbon intensity is determined through a life cycle analysis measuring the amount of carbon generated during the extraction, production, transportation, and combustion of a fuel. The LCFS does not require use of any specific fuel, only that regulated parties find a blend of fuels and credits that will meet the declining target each year.
The decline in the LCFS carbon intensity targets was frozen due to a legal challenge. To address the court’s ruling and to strengthen the program, the California Air Resources Board readopted the LCFS regulation.
The readopted version of the LCFS includes a number of modifications developed with stakeholder input. These include:
- Incorporating additional cost containment in response to stakeholder concerns about possible price spikes by including a mechanism to cap LCFS credit prices;
- Streamlining the application process for alternative fuel producers seeking a carbon intensity score;
- Improving the process for earning LCFS credits by charging electric vehicles.
The CARB has also adopted a regulation governing alternative diesel fuels (ADF). The regulation puts in place a three-step process beginning in 2016 to create a path to bring cleaner diesel substitutes into the market. This regulation also establishes requirements and fuel specifications for biodiesel to ensure the emissions of nitrogen oxides (NOx) from biodiesel use will not increase, and will be reduced over time. Biodiesel and other ADFs can help producers achieve their target under the LCFS.
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