The Low Carbon Fuel Standard (LCFS) adopted by the California Air Resources Board (CARB) earlier this year (earlier post) requires a 10% reduction in the average greenhouse gas (GHG) emission intensity of the state’s transportation fuels by 2020.
The regulation also levies the calculation of Indirect Land Use Change (ILUC) effects against biofuels, against the opposition of the biofuels industry. At the time of adoption, ARB agreed to continue its study of indirect effects, including indirect land use change as well as the indirect effects of all other transportation fuels. The ARB staff is to propose a strategic plan for addressing overall sustainability provisions for the LCFS, for consideration by the Board for adoption by the end of 2011.
A new study by researchers at the Institute of Transportation Studies, University of California Davis, examines a range of sustainability requirements for biofuels and considers a possible framework for implementing the LCFS sustainability provision.
Our goal is to identify the proper mechanisms to further incentivize sustainable production of biofuels and other relevant transportation fuels while minimizing environmental impacts and unintended consequences.
—Yeh et al.
The study reviews sustainability requirements and criteria being implemented or proposed by governments promoting biofuel programs, particularly the United Kingdom’s (UK’s) Renewable Transport Fuel Obligation (RTFO) carbon and sustainability reporting and the European Union’s (EU’s) sustainability criteria under the EU Renewable Energy Directive (EU-RED). It also reviews the sustainability principles and criteria (Version 0.5) proposed by the Roundtable on Sustainable Biofuels (RSB), an international initiative involving stakeholders across the entire biofuel supply chain, nongovernmental organizations, experts, governments, and inter-governmental agencies.
Based on the review, the ITS authors concluded that an LCFS sustainability requirement may be most effective if it adopts the following principles:
Stakeholders should collaborate to establish a performance-based sustainability framework that sets reasonable expectations, clear measures of compliance, and methods of enforcement; encourages innovation; and rewards practices exceeding a minimum standard.
The sustainability framework should adopt a lifecycle approach and apply to all fuels, feedstocks, and production and conversion technologies. In the short term, however, the standards may apply only to non-baseline LCFS-participating fuels, to address acute concerns for new fuels, reduce administrative burden, and recognize existing regulations on baseline fuels.
Careful coordination and integration among diverse international initiatives is required to improve coherence and efficiency of sustainability standards between countries. To build on international consensuses, avoid duplication of efforts, and take into account the special background, constraints, and interests of California’s LCFS, RSB principles and criteria (Version 0.5 or Version 1.0 when it becomes available) could be considered as a starting point and tailored to California’s context.
Because there has been limited experience in implementing sustainability standards over large geographical and political regions, the authors note, many technical, policy, and implementation issues remain to be tested. Among the challenges are identifying appropriate incentives for performance-based requirements for meeting sustainability goals; as well as the sustainability issues associated with market-mediated effects at the system level, such as food prices, ILUC, and cumulative environmental impacts.
With the increasing recognition of the need to adopt sustainability safeguards for new transportation fuels that have potentially large environmental consequences, stakeholders should collaborate to establish a performance-based sustainability scheme that sets reasonable expectations and clear measures of compliance. The scheme should encourage innovation and reward practices exceeding a minimum standard, but proper incentive mechanisms will be needed.
A sustainability scheme can only be effective if the proposed framework is robust but not excessively complicated, and the criteria are measurable and verifiable. It also needs to acknowledge the limitations of resources, politics, and California’s legal jurisdiction and be consistent with international efforts in sustainability criteria. Government assistance in facilitating information sharing, certification, and capacity will be crucial for the development of the sustainability criteria.
—Yeh et al.
Sonia Yeh, Daniel A. Sumner, Stephen R. Kaffka, Joan M. Ogden, Bryan M. Jenkins (2009) Implementing Performance-Based Sustainability Requirements for the Low Carbon Fuel Standard – Key Design Elements and Policy Considerations. Institute of Transportation Studies, University of California, Davis, Research Report UCD-ITS-RR-09-42