The LCFS re-adoption and its possible repercussions

By John Sens | March 31, 2015

The low carbon fuel standard (LCFS) is a renewable fuels incentive program in California implemented by the California Air Resources Board designed to reduce carbon emissions from transportation uses in the state by 10 percent by 2020. Due to legal actions that were concluded in 2013, CARB is re-adopting the regulation to address the court’s ruling. CARB took this opportunity as a chance to update the regulations and to implement improvements to the program, with the goal of encouraging the lowest carbon intensity (CI) fuel at all times.

A board hearing took place on Feb. 19 attended by a wide range of industry members from all sectors, most of which were supportive of re-adopting the regulation. Some important items that have resulted from this re-adoption process are:

          -Setting compliance curve to meet 10 percent GHG reduction by 2020.

          -Cost containment measures, including a price ceiling of $200 per CI credit.

          -A two-tiered system for applying to use pathways, along with automation and combined steps to simplify the approval process: 

               -Tier 1 - Conventional fuels, including ethanol, biodiesel, etc.

               -Tier 2 - Next generation fuels, or conventional fuels with substantial GHG reductions.

          -A new model to create pathways for fuels to the state (GREET 2.0), which allows for greater precision when calculating greenhouse gas emissions.

          -Revised indirect land use values (iLUC) using data gained to better reflect and distribute the CI scores associated with feedstocks used in fuel production. Notable iLUC values include: palm biodiesel - 71.4; corn ethanol - 19.8; sorghum ethanol - 19.4; and soy biodiesel - 29.1. 

          -A number of provisions to allow for obligated parties to generate CI credits through improvements in their processes and energy use.

          -New requirements to set up an account on the LCFS reporting tool (LRT) and enforcement related provisions.

The final board hearing to approved or deny the re-adopted LCFS regulation will take place either this June or July. If approved, the board hearing will finalize the regulation until 2020. The effective date for the regulation, if approved, will be Jan. 1, 2016, at which point all GREET 2.0 pathways that have been accepted will be eligible for CI credit generation. Applications using the GREET 1.8b model will be accepted until the effective date, and will expire one year from the effective date on Jan. 1, 2017.

Author: John Sens

LCFS Project Manager, EcoEngineers



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