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California ARB Releases Discussion Outline of Low Carbon Fuel Standard Regulation

Lcfs
Sample compliance schedule for gasoline and diesel. The diesel carbon intensity values are adjusted by the vehicle efficiency factor. Click to enlarge.

The staff of the California Air Resources Board (ARB) has released the Proposed Concept Outline for the California Low Carbon Fuel Standard Regulation as part of the process of developing the rule to implement the Low Carbon Fuel Standard (LCFS) mandated in 2007 by Governor Schwarzenegger’s Executive Order S-1-07. (Earlier post.)

The California LCFS calls for a reduction of at least 10% in the average fuel carbon intensity (AFCI) of California’s transportation fuels by 2020. The structure of the rule could serve as a model for other similar efforts nationally and globally. The document is intended to provide stakeholders an opportunity to review and provide input to the proposed LCFS staff recommendations, which are not final and are still under development.

While the outline contains the staff recommendations previously presented in LCFS working groups and workshops, it does not address major areas currently under development, including, but not limited to: indirect and direct land use change, sustainability, environmental justice, modeling methodologies, uncertainties and assumptions, multimedia or economic impact analysis.

Lcfs2
Summary of applicable reference standards for LCFS-participating transportation fuels. (LD=light-duty, MD=medium-duty, HD=heavy-duty). Click to enlarge.

The basic approach staff is proposing is to establish a declining carbon intensity standard for gasoline and diesel. All fuels then are measured against either the gasoline or the diesel standard. Fuels that show “over-compliance”—i.e., have an AFCI less than the assigned reference point—are awarded credits.

Calculation of a fuel’s AFCI in gCOe/MJ is based on the average fuel carbon intensity of the “system”—the finished gasoline, diesel, natural gas, propane, electricity, hydrogen, E85, B5, and B20 that is supplied to the vehicle—adjusted by a vehicle efficiency factor, corresponding to the type of engine in which the fuel is used and by the volume of fuel in gallons gasoline equivalent (gge).

Calculating the system AFCI factors in the relative contribution by volume of blendstocks of different carbon intensities. For example, CNG from two different sources would be considered two different blendstocks for a given fuel system. An ethanol-blended gasoline might have to factor in the carbon intensities of the gasoline (itself perhaps deriving from different blendstocks), corn ethanol and cellulosic ethanol.

In addition to seeking general comment on the proposal, ARB staff is specifically looking for feedback in a number of areas:

  • Should hydrogen be included immediately at the onset of LCFS or be included when a threshold (either quantity or date) is reached? If hydrogen is included, it will be subject to LCFS compliance requirements. However, staff is considering waiving the reporting requirement until such time that the amount of hydrogen used for transportation exceeds a “to-be-determined” amount. If hydrogen is not included immediately but is allowed to opt-in to the LCFS, it will not be subject to reporting but will still be able to generate credits, should it qualify.

  • The suggested compliance schedules for gasoline and diesel are, as an initial basis, based on a default Linear Compliance path. Staff is seeking additional input on the general characteristics of an achievable compliance schedule for gasoline. Comments should address the factors that could influence the ultimate slope of a compliance path including, but not limited to, the impact of land use change, the availability of low or very low-carbon biofuels in the 2010 to 2015 timeframe, and possible compliance strategies.

  • Staff is seeking input on the types of vehicles (and their fuel systems) currently in operation or planned for each fuel category. In addition, staff is seeking input on how to appropriately assign references for fuels used in medium-duty applications.

  • Staff is seeking comments on the definition of an ultra low carbon fuel and the concept of a volume obligation for ultra low carbon fuels. One suggested approach is that by a certain timeframe (i.e. 2015) or when the total volume of transportation fuels reaches “xx” amount, to require “y” percentage of the fuel from an aggregate volume (based on total sales across all LCFS applicable fuels in California) to be ultra low carbon fuels. Another approach would be to require an individual obligated party with total sales exceeding “z” volumes will be required to produce “y” percentage of ultra low carbon fuel.

    ARB staff asks that comments address, at minimum, whether a volume obligation for ultra low carbon fuels should be included in the LCFS, the appropriate volume requirement, and other approaches staff should evaluate.

  • Staff is seeking input on what entity should be treated as the ‘provider’ for natural gas, propane, electricity, and hydrogen and on the reporting requirements for natural gas, propane, electricity, and hydrogen.

  • Staff is seeking input on a proposed tracking system to accommodate natural gas, propane, and hydrogen. Comments on a proposed tracking system for electricity are currently under staff review.

  • Staff is currently preparing an RFP for the development of a software compliance tool and is seeking input on the design and key software features that will help to streamline the determination of compliance.

  • Staff is seeking comments on whether external 3rd party entities should be allowed to purchase and trade LCFS credit.

  • Staff is seeking input on the current vehicle engine types corresponding to light- and heavy-duty applications of each fuel.

  • In the proposal, for all conventional crude oils, a single averaged, default carbon intensity value will be applied. Similarly, for each non-conventional crude oil category, a single averaged, default carbon intensity value will be applied. A non-conventional crude oil provider may submit data to ARB to demonstrate a carbon intensity value that is substantively different than the averaged, default carbon intensity value for that crude oil. Staff is seeking input on what value above the averaged, default value is considered to be ‘substantive’ and whether credits should be allowed.

  • In the proposal, a single averaged, default refinery efficiency value will be applied for all refineries. An obligated party may submit data to demonstrate any improvements in the refinery efficiency that is substantive compared to the averaged, default refinery efficiency value. (Improvements do not include those already mandated by other emissions reduction regulations.) Staff is seeking input on what value above the averaged, default refinery efficiency value is considered to be a ‘substantive’ improvement. Additionally, if an obligated party makes a substantive improvement through the use of, for instance, co-generation technology, staff is seeking input on whether credits should be allowed. If credits are allowed, the input should also address how the credits are to be awarded.

The document will be discussed at the LCFS workshop on 25 March 2008 in Sacramento, CA.

Resources

Comments

John Taylor

Are you as confused as me?

This regulation is a compliance nightmare, and sounds like each car gets a separate fuel price based on it's efficiency. For sure each refinery and fuel source gets a separately calculated tax level.

I think lawyers will love this, but the rest of the world will find it impossible.

Kit P

It is not a difficult task to clean air the air in California and reduce ghg by 50 % in one day. The day after regulations into effect rationing California consumers to 50 % of the energy they use, it will happen. This will be no great hardship either. I grew up part of the time in California when the air was still clean living with those that lived through the depression and WWII. We had one car and my dad car pooled to work. We had no central air or hot tubes.

It is very clear from looking at this outline that regulators in California are only looking at smoke and mirrors and not demanding hard choices.

GreyFlcn

An easy way to lower the carbon intensity of California fuels 10%.

Take the biofuel out. (!)

"The Berkeley team warned about the land-use-change bogeyman in a pair of lengthy reports submitted to California ARB/CPUC authorities last year. But only this month did the team report the startling, if preliminary, numbers. Current wisdom in California says gasoline produces about 92 grams of carbon dioxide for every megajoule of energy produced; ethanol is reckoned to be slightly cleaner at 75.9 grams. But the land-use penalty alone from growing more biofuel crops could add as much as 140 grams/MJ—a “really enormous” number, professors Farrell and O’Hare wrote. (For a total of 216 grams)

And the problem isn’t just corn. Any land-use change, be it to soy or sugarcane, carries a GHG pricetag that shows up somewhere in the world. If these“crude upper limit estimates” are right, California’s current fuel mix is already 3% to 33% more carbon-intensive than the state thought. That doesn’t bode well for the state’s plans to cut the carbon content of its fuel 10% by 2020."
http://blogs.wsj.com/environmentalcapital/2008/01/23/more-bad-news-for-ethanol/

GreyFlcn

And of course,

There is no current federal requirement for ethanol use as an oxygenate. (!)
www.epa.gov/fedrgstr/EPA-AIR/2006/May/Day-08/a4252.htm

And in general ethanol makes air quality worse. (!)
feinstein.senate.gov/news-corn0611.html
www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/04/18/MNG7EPAN601.DTL

GreyFlcn

And of course, using Ethanol in Winter months, and thus creating more Ozone, has it's own warming related problems.
http://www.nasa.gov/centers/goddard/news/topstory/2006/troposphere_ozone.html

So smog when it's hot, and increasing the melting of the Artic Ice Caps while it's cold.

Sounds like a bad idea all around.

CSGuy

Let's face it. Government is not going to legislate us out of our current path to destruction via oil, coal and natural gas. We consumers must take the lead and stop buying just any old junk the mega corps want us to. Make sustainable and green decisions each time you purchase anything, from toothpaste and toilet paper to your house and car.

That being said, the CA ARB is going in the right direction. They just need to carefully study the earlier legislations in Europe and try not to make as many mistakes. But action is needed; as long as the cost of their pollution is not forced back upon the industries responsible for our current peril no progress will ultimately be made in cleaning up the mess.

Stan Peterson

The assumption here seems to be that the world is getting worse and worse, when the exact opposite is the reality.

The number of Metropolitan Air Quality Districts not meeting air quality in the USA, has declined from several hundred to a relative handful despite three toughening of the original air standards. Progress is even being made even in the LA Basin, where both the degree and number of non conformance periods continues to decline.

Changes coming in non-automotive emissions from rail, marine, and off road emitters, will bite over the next half decade, as will the coming Electrification of the automobiles. Only the negative effects of allowing T2B5 diesels, will act to make the air worse.

Even as I criticize the other developed and underdeveloped countries for their emissions standards stalling; those standards are delayed in comparison with America, but still they are being slowly toughened. Over time foreign air standards despite stalling, will toughen, and be implemented.

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