The California Air Resources Board last week approved updates to the Low Carbon Fuel Standard (LCFS).
The agency said in a news release that the updates channel global, national and local private sector investment towards increasing cleaner fuel and transportation options for consumers, accelerating the deployment of zero-emission infrastructure, and keeping the state on track to meet legislatively mandated air quality and climate targets.
ReSource covered the proposed changes in depth here.
The LCFS reduces air pollution and greenhouse gas emissions by setting a declining carbon intensity target for transportation fuels used in California; producers that don’t meet established benchmarks buy credits from those that do. This system has generated $4 billion in annual private sector investment toward a cleaner transportation sector.
The updates set targets to reduce the carbon intensity of California’s transportation fuel pool by 30% by 2030 and by 90% by 2045. The amendments also increase support for zero-emissions infrastructure, including for medium- and heavy-duty vehicles, and make more transit agencies eligible to generate credits.
The LCFS has been very effective to date, the release claims, reducing the carbon intensity of California’s fuel mix by almost 13% and displacing 70% of the diesel used in the state with cleaner alternatives. This has displaced 320 million metric tons CO2 of gasoline and diesel emissions since the Program’s inception. That’s an amount equivalent 85% of today’s annual statewide greenhouse gas emissions. The growth in the use of renewable fuel is powering needed emissions reductions in the transportation sector.
Supporting Californians
- Making electric vehicles more affordable: “The LCFS has also provided hundreds of millions of dollars of beneficial credits and incentives supporting the build-out of EV charging infrastructure and vehicle rebates which lower the upfront costs for drivers,” said a representative from MN8 Energy, which produces renewable energy, in a letter submitted to CARB.
- Expanding access to charging infrastructure: As of October 10, 2024, there have been a total of 71 hydrogen stations and 749 fast EV charger sites approved under the Hydrogen Refueling Infrastructure (HRI) and (Fast Charging Infrastructure) FCI provisions of LCFS, respectively.
- Reducing health care costs associated with pollution from dirty fuels: CARB estimates $5 billion in savings from avoided health outcomes between 2024 and 2046.
- Increasing consumer choices, which drives price competition: “By using market-based policies that ensure the best ideas succeed, we can also maximize impact by marshaling private capital to invest in climate solutions. Fortunately, California already has an excellent example of this kind of approach in the Low Carbon Fuel Standard (LCFS).”
- Reducing dependence on the oil industry, thereby protecting consumers from its associated supply and cost volatility: The LCFS has displaced more than 30 billion gallons of petroleum fuel.
The LCFS sends long-term market signals to phase out combustion fuels and increase zero emission fuels and transportation options. The LCFS updates adopted by the Board were developed after a rigorous, years-long public rulemaking process that incorporated feedback received from interested parties. Updates include:
- Providing billions of additional dollars to fund zero-emission vehicle charging and hydrogen fueling infrastructure, including new crediting opportunities for medium – and heavy-duty refueling infrastructure, to support implementation of California’s zero emission vehicle regulations.
- Increasing incentives for infrastructure in low-income neighborhoods and remote locations and ensuring that historically underserved communities receive needed investment to reduce emissions and provide equitable access to a clean air future.
- Phasing out avoided methane crediting associated with the use of biomethane used as a combustion fuel, but extending the use of biomethane for renewable hydrogen to align with goals outlined in the 2022 Scoping Plan – the state’s plan for reducing climate-warming emissions and reaching carbon neutrality.
Updated guardrails
The LCFS updates also include new guardrails to avoid land use changes resulting in potential loss of food production or deforestation. The majority of biomass-based diesel and sustainable aviation fuel in the LCFS has historically come from waste feedstocks, such as used cooking oil, animal fat and inedible distiller’s corn oil. To minimize potential land use issues, the program will require fuel producers track crop-based and forestry-based feedstocks to their point of origin. The LCFS will also require independent feedstock certification to ensure biomass-based diesel and sustainable aviation fuel feedstocks are not undermining natural carbon stocks. Palm-derived fuels are also explicitly prohibited from receiving credits.
Californians will benefit from these program updates in numerous ways, including:
- As consumers increase their use of low carbon intensity fuels and more efficient vehicles, fuel costs per mile will be reduced by 42 percent – translating to savings of over $20 billion in fuel expenditures every year by 2045. For light-duty vehicles (cars, pickup trucks, sport utility vehicles, vans, and minivans) these fuel cost savings will be even more pronounced, cutting today’s costs to Californians by more than 50 percent.
- The amount of LCFS proceeds invested in disadvantaged communities for clean fuel and transportation projects is estimated to be approximately $4.8 billion in the next decade.
- Californians are expected to save almost $5 billion in health care costs by avoiding the impacts of air pollution.
- The amendments will reduce greenhouse gas emissions by 558 million metric tons, NOx by more than 25,500 tons and PM 2.5 by more than 4,200 tons between 2025 and 2045.
