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Oregon DEQ seeking public comments on implementing Low Carbon Fuel Standard before sunset in 2015

Oregon’s Department on Environmental Quality (DEQ) is inviting public comment on a proposed rulemaking that would fully implement Oregon’s low carbon fuel standard (LCFS). (Earlier post.) The first phase required Oregon producers and importers of fuels to register with DEQ, keep records and submit reports about the fuels they currently supply. The second phase—the rules for which DEQ is currently seeking comments—require the same parties to meet the low carbon fuel standards by supplying cleaner fuels in Oregon or purchasing credits from clean fuel providers.

The proposed Oregon Clean Fuels Program Phase 2 rules would: implement the enabling legislation of House Bill 2186, originally passed in 2009; establish clean fuel standards to reduce greenhouse gas emissions from Oregon’s transportation fuels by 10% over a 10-year period; and require importers of transportation fuels to reduce the average carbon intensity of fuels they provide in Oregon to meet the annual clean fuel standards.

Further, the rules would allow providers of clean fuels to generate and sell clean fuel credits for the fuels they provide in Oregon; modify the definition of fuel importer to be the owner of the fuel when it crosses into Oregon; and establish fuel supply and fuel price deferrals to contain the Clean Fuels Program’s costs.

The full program does not mandate the use of a specific alternative fuel or set a cap on total emissions. Compliance can be achieved using whichever combination of alternative fuels and credits is most cost-effective for fuel providers.

In February, Oregon Governor Kitzhaber launched a new initiative to maximize the economic development potential of clean fuels in Oregon, directing the Department of Environmental Quality to move forward with full implementation of Oregon’s Clean Fuels Program and announcing a new Clean Fuels Work Advisory Committee.

DEQ had only partially implemented the Clean Fuels Program passed by the Legislature in 2009. Like the California Low Carbon Fuel Standard (LCFS), the program was designed to reduce the carbon intensity of fuels by 10% over 10 years.

Oregon Environmental Quality Commission authority to adopt these rules expires in 2015 under the current legislation. The proposed Phase 2 rules would provide the Oregon Legislature a fully realized and adopted clean fuels program and information needed to determine whether to lift the sunset.

DEQ is requesting public comment through Friday, 7 November 2014 on whether to consider other options for achieving these rules’ substantive goals while reducing negative economic impact of the rule on business.



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