The California Air Resources Board (ARB) released its proposed regulation to implement the Low Carbon Fuel Standard. The release of the proposed regulation allows 45 days for the public to review the language and provide comment before the item is considered at the 23 April 23 ARB hearing.
The regulation establishes two performance standards that fuel producers and importers must meet each year beginning in 2011. One standard is established for gasoline and the alternative fuels that can replace it. A second similar standard is set for diesel fuel and its replacements. Each standard is set to achieve an average 10% in the carbon intensity of the statewide mix transportation fuels by 2020. The regulation is expected to result in 16 million metric tons of greenhouse gas emission reductions by 2020.
The standards are “back-loaded”—more reductions are required in the last five years, than the first five years. This allows for the development of advanced fuels that are lower in carbon than today’s fuels and the penetration of plug-in hybrid electric vehicles, battery electric vehicles, fuel cell vehicles, and flexible fuel vehicles. ARB staff anticipates that compliance with the LCFS will be based on a combination of strategies involving lower carbon fuels and more efficient, advanced-technology vehicles.
Reformulated gasoline mixed with corn-derived ethanol at 10% by volume and low sulfur diesel fuel represent the baseline fuels.
The lifecycle analysis required by the LCFS includes the direct emissions associated with producing, transporting, and using the fuels as well as consideration of both direct and indirect effects that are caused by the change in land use or other effects.
For some crop-based biofuels, the staff has identified land use changes as a significant source of additional GHG emissions. Therefore, the staff is proposing that emissions associated with land use changes be included in the carbon intensity values assigned to those fuels in the regulation. No other significant indirect effects that result in large GHG emissions have been identified that would substantially affect the LCFS framework for reducing the carbon intensity of transportation fuels.
...Efforts to model indirect land use impacts indicate that the full lifecycle carbon intensities of some biofuels may be similar to or even higher than the carbon intensities of conventional petroleum-based fuels. ARB staff has been and will continue to work with modelers at the University of California and Purdue University to derive indirect land use change estimates that are empirically based, defensible, and fully open to public scrutiny and comment.
Based on the work done to date, crop-based biofuels contribute to some indirect land use impacts. However, the magnitude of this impact has been questioned by renewable fuel advocates. Land use change is driven by multiple factors. Because the tools for estimating land use change are few and relatively new, biofuel producers argue that land use change impacts should be excluded from carbon intensity values pending the development of better estimation techniques.
Based on its work with university land use change researchers, however, ARB staff has concluded that the land use impacts of crop-based biofuels are significant, and must be included in LCFS fuel carbon intensities. To exclude them would allow fuels with carbon intensities that are similar to gasoline and diesel fuel to function as low-carbon fuels under the LCFS. This would delay the development of truly low-carbon fuels, and jeopardize the achievement of a 10 percent reduction in fuel carbon intensity by 2020.—ARB ISOR
The standards are expressed as the carbon intensity of gasoline and diesel fuel and their alternatives in terms of grams of CO2 equivalent per megajoule (g CO2e/MJ). Providers of transportation fuels (referred to as regulated parties) must demonstrate that the mix of fuels they supply meet the LCFS intensity standards for each annual compliance period. They must report all fuels provided and track the fuels’ carbon intensity through a system of “credits” and “deficits.” Credits are generated from fuels with lower carbon intensity than the standard. Deficits result from the use of fuels with higher carbon intensity than the standard. A regulated party meets its compliance obligation by ensuring that amount of credits it earns (or otherwise acquires from another party) is equal to, or greater than, the deficits it has incurred. Credits and deficits are generally determined based on the amount of fuel sold, the carbon intensity of the fuel, and the efficiency by which a vehicle converts the fuel into useable energy. The calculated metric is tons of GHG emissions. This determination is made for each year between 2011 and 2020. Credits may be banked and traded within the LCFS market to meet obligations.
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 (AB118, Nunez, 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 will hold a public workshop the week of 23 March to accept public comment on the proposed regulation.