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California proposes Low Carbon Fuel Standard

6 March 2009

The California Air Resources Board (ARB) released a proposed regulation implementing the Low Carbon Fuel Standard (LCFS), a policy to reduce greenhouse gas (GHG) emissions from California’s transportation fuels by 10% by 2020 and more thereafter. The LCFS is one of the most important early actions called for under AB 32, California’s climate change legislation.

Governor Schwarzenegger issued the LCFS Executive Order in early 2007 directing the state to drive down greenhouse gas emissions from transportation fuels. The transportation sector accounts for 40% of the state’s total GHG emissions. The initiative is designed to increase the use of alternative fuels, replacing 20% of the fuel used by cars in California with clean alternative fuels by 2020, including electricity, biofuels, hydrogen and other options.

The proposed regulation requires providers, refiners, importers and blenders to ensure that the fuels they provide for the California market meet an average declining standard of “carbon-intensity”. This is determined by examining the sum of GHG emissions that are associated with the production, transportation and consumption of the fuel, also referred to as the “fuel pathway”.

The regulation also takes into account the difficult issue of how the production of some fuels impacts land-related emissions. Certain fuel pathways result in the release of additional greenhouse gas emissions through the conversion of forest lands and other carbon-containing habitats worldwide. ARB staff is using models to predict how land use change would occur due to increased demand and will include those emissions in the relevant fuel pathways.

To enhance private sector and federal investment into alternative fuel production and distribution, California is providing funding to assist in the early development and deployment of the most promising low-carbon fuels. The Alternative and Renewable Fuel and Vehicle Technology Program (AB 118, 2007), managed by the California Energy Commission, will provide approximately $120 million per year over seven years to deploy the cleanest fuels and vehicles.

AB 32, signed in 2006, is California’s Global Warming Solutions Act that set in law aggressive greenhouse gas reduction targets (1990 levels by 2020). AB 32 set the goals, but the solution is prescribed in the Scoping Plan which utilizes a mix of a cap-and-trade program, along with complimentary measures. The LCFS is included in the Scoping Plan as one of the solutions for California to meet its AB 32 goals.

ARB is accepting public comments on the proposed regulation. The LCFS will be considered for adoption at the April 23 ARB hearing.

Source: California ARB