California Adopts Low Carbon Fuel Standard, with Indirect Land Use Change Effects for Biofuels
24 April 2009
|The LCFS is an important component in California’s effort to reduce transportation GHG. Source: ARB. Click to enlarge.|
At its meeting on Thursday, the California Air Resources Board adopted a regulation that will implement Governor Schwarzenegger’s Low Carbon Fuel Standard (earlier post) calling for at least a 10% reduction from 2006 levels in the carbon intensity (measured in gCO2e/MJ) of California’s transportation fuels by 2020. When fully implemented, ARB projects that this regulation will reduce greenhouse gas emissions by about 15 million metric tons a year (CO2 equivalent).
The regulation also levies the calculation of Indirect Land Use Change (ILUC) effects against biofuels, against the opposition (earlier post) of the biofuels industry.
ARB has agreed to continue its study of indirect effects, including indirect land use change as well as the indirect effects of all other transportation fuels. In a letter to Growth Energy sent by ARB Chairman Mary Nichols on Thursday, she noted that an ongoing investigation was needed to evaluate the land use and other indirect effects of all transportation fuels.
ARB projects that the LCFS will achieve about 10% of the total emissions reductions required to meet the AB32 (the Global Warming Solutions Act, Núñez, 2006) target. ARB representatives describe the measure as the most important early-action called for under AB 32.
ARB staff projects that the LCFS, in conjunction with the Pavley regulations (new light duty vehicle greenhouse gas standards, AB 1493), are projected to reverse the projected increase in transportation greenhouse gas emissions, and to bring them back down approximately to 2005 levels by 2020.
ARB said that the new regulation is aimed at diversifying the variety of fuels used for transportation and that it will boost the market for alternative-fuel vehicles and achieve 16 million metric tons of greenhouse gas emission reductions by 2020.
|ARB projected displacement of petroleum by alternative fuels. Source: ARB. Click to enlarge.|
According to ARB analyses, to produce the more than 1.5 billion gallons of biofuels needed to meet the needs of the LCFS, more than 25 new biofuel facilities will have to be built and will create more than 3,000 new jobs, mostly in the state’s rural areas.
Regulators expect the new generation of fuels to come from the development of technology that uses algae, wood, agricultural waste such as straw, common invasive weeds such as switchgrass, and even from municipal solid waste.
In a statement regarding the decision to include ILUC effects, however, Biotechnology Industry Organization (BIO) Executive Vice President Brent Erickson noted that while the industry supports the adoption of a LCFS, the inclusion of ILUC measurements and the methodology proposed “may discourage investment in continued research and development of the same low carbon biofuels that are needed by California to meet its goals.”
BIO has proposed to ARB that it maintain flexibility in its regulations to consider alternate models in the future that can more accurately measure land use change. In its official comments on the regulation, BIO referenced a simple dynamic model currently under development for directly accounting for land use change.
|Block Diagram for the various components for a fuel pathway. Source: ARB. Click to enlarge.|
The regulation requires providers, refiners, importers and blenders to ensure that the fuels they provide for the California market meet the average declining standard of carbon intensity. This is established by determining the sum of greenhouse gas emissions associated with the production, transportation and consumption of a fuel, also referred to as the fuel pathway. For biofuels, this calculation includes ILUC.
The intent of the structure of the LCFS is to provide economic mechanisms to allow the market to choose the most cost-effective clean fuels (those with the lowest carbon intensity) giving California consumers the widest variety of fuel options.
Seeking to enhance private sector and federal investment into alternative fuel production and distribution, California is also 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 (Núñez, 2007), managed by the California Energy Commission, will provide approximately $120 million dollars per year over seven years to deploy the cleanest fuels and vehicles.
ARB expects the standard to drive the availability of plug-in hybrid, battery electric and fuel-cell powered cars while promoting investment in electric charging stations and hydrogen fueling stations.
Governor Schwarzenegger issued the executive order requiring a low carbon fuel standard in early 2007. It directed the state to drive down greenhouse gas emissions from the transportation sector, which accounts for 40% of the state’s total greenhouse gas emissions. The regulation is intended to increase the use of alternative fuels, replacing 20% of the fuel used by cars in California with alternative fuels by 2020, including electricity, biofuels, hydrogen and other options.
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