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Latest status report finds California fuel providers continue pacing ahead of requirements of Low Carbon Fuel Standard; sufficient credits to meet full 2013 obligation

1 May 2013

Lcfs
Continued LCFS compliance will require continued reductions in CIs. Net credits generated is the number of credits or deficits generated in each period; banked credits after compliance is the number of excess credits banked from the current or previous compliance years. Source: Yeh et al. Click to enlarge.

According to the latest status report on the progress of California’s Low Carbon Fuel Standard (CA-LCFS) (earlier post), regulated parties in the LCFS—oil producers, importers and other fuel providers—continued to exceed the required reductions in carbon intensity specified by the standard. (Earlier post.)

Companies achieve LCFS compliance when credits equal deficits. According to the new report, from 2011 through Q4 2012, cumulative credits generated under the LCFS total 2,835,662 metric tons of CO2e, while cumulative deficits total 1,550,698 metric tons CO2e, for a net excess of 1.285 million credits (metric tons of CO2e). If all are available for use, the bank of excess credits represents about half of what is needed to cover the 2013 obligation.

Net LCFS credits (excess of credits over deficits) generated per quarter showed an upward trend. Roughly 78% of net LCFS credits were generated from ethanol; 12% from fossil and bio-based LNG or CNG; and 9% from biodiesel/renewable diesel. Electricity generated 1% of the net credits. The share of electricity grew from negligible levels in 2011 to reach about 2% by the final quarter of 2012. (By contrast, the first report found that in the initial period 2011 through Q1 2012, companies relied on ethanol to generate 86% of the credits.)

Among biofuels, corn and corn/sorghum/wheat mixed ethanol pathways (corn+) constituted the majority of the fuel volume (95%) and net credits (80%). Biofuels using waste as a feedstock (for biodiesel and ethanol) comprised less than 1% of biofuel volumes but 10% of biofuel credits due to their low CI. Corn/sorghum/wheat mixed ethanol pathways contributed about 19% of biofuel credits.

Overall, in 2012, non-petroleum based fuels contributed 6.19% (energy content) of the total transportation fuel mix. This amounts to an annual average displacement of about 1.06 billion gallons of gasoline and 45 million gasoline gallon equivalents of diesel.

The average fuel mix was about 11.5% (by volume) ethanol in the gasoline mix (some fuels are sold as E85, 85% ethanol blended in gasoline) and 0.5% biodiesel/renewable diesel in the diesel mix.

The average fuel carbon intensity (AFCI) of gasoline and diesel substitutes declined over the period, from 87.7 and 63.4 gCO2e/MJ, respectively, in Q1 2011 to just below 83.2 gCO2e/MJ and 59.6 gCO2e/MJ, respectively, in Q4 2012.

Other highlights from the latest report include:

  • In 2012, low carbon fuels displaced 1.06 billion gallons of gasoline and 45 million gasoline gallon equivalents of diesel. Overall, low carbon fuels contributed about 6% of the total transportation fuel mix.

  • Of the credits, 78% were generated from ethanol from corn, other grains and sugarcane; 12% from natural gas and bio-based gases, such as liquid and compressed natural gas; 9% from biodiesel and renewable diesel; and 1% from electricity. Biofuels from waste materials made up less than 1% of biofuel volumes but generated 10% of biofuel credits, due to their low carbon intensity.

  • Credit prices reported to the California Air Resources Board averaged about $13.50 per metric ton of carbon dioxide equivalents in 2012 and $27.70 for the first two months of 2013.

The LCFS requires oil producers, importers and other fuel providers gradually to reduce, on a full-fuel lifecycle basis, the carbon intensity (CI) of their transportation fuel mix (measured in gCO2e/MJ) by from 0.25% in 2011 to 10% by 2020.

UC Davis researchers helped create the framework for the LCFS, the US’ first, in 2007. Low carbon fuels include biofuels from waste and plant materials, natural gas, electricity used in plug-in vehicles, and hydrogen used in fuel cell vehicles.

The policy encourages companies to either make investments in low-carbon fuel technologies or use the carbon credit market to buy greenhouse gas emission reduction credits from other companies that can produce transportation fuels that mitigate emissions at lower cost.

Overall, California has lowered the carbon intensity of its transportation fuels since the standard took effect. However, continued investment in more low carbon fuels is needed to meet the regulation’s goals through 2020.

Possible technologies and strategies to comply with the LCFS, the authors suggest, include continued reductions in CI values of existing biofuels, greater use of low CI fuels such as liquid and gaseous biofuels made from wastes, new investments in cellulosic biofuels, and increased use of CNG, LNG, electricity, and hydrogen.

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May 1, 2013 in Fuels, LCFS, Policy | Permalink | Comments (1) | TrackBack (0)

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Comments

new investments in cellulosic biofuels, and increased use of CNG, LNG

good

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