Low Carbon Fuel Standard News: March 13, 2013

In previous posts on my Advanced Biotechnology for Biofuels blog, I described the programs enacted by California and Oregon and adopted or under consideration in other states, Canadian provinces and regions, to promote the increased use of low-carbon transportation fuels (i.e., fuels with more favorable greenhouse gas emissions than traditional gasoline or diesel). In this post, I’ll report on news items and other developments during the last few months of 2012 and early 2013 that are relevant to these “Low Carbon Fuel Standard” (LCFS) programs. Look for subsequent updates on other developments in the weeks to come.

California Low Carbon Fuel Standard

Amendments to be proposed to California LCFS. At a workshop held on March 5, 2013, staff from the California Air Resources Board (ARB) presented its plans to present regulatory amendments for consideration by the ARB Board at its October 2013 meeting. Among these proposed amendments will be 36 new applications covering 118 new fuel pathways for the Board’s consideration. Most of these have arisen from applicant petitions, while 15 pathways were developed internally by ARB staff. The pathways include new methods for producing biodiesel, biomethane, ethanol, renewable diesel, and liquefied natural gas. Also discussed at this workshop were issues relating to calculation of indirect land use change, enforcement provisions, and the reporting tool used for banking and trading of credits under the LCFS.

California LCFS quarterly data summary issued. On December 31, 2012, CARB staff released the LCFS status report for the 3rd quarter of 2012. The report showed that about 390,000 metric tons (MT) of credits were generated in Q3 2012 against approximately 250,000 MT of deficits. CARB had previously reported Q2 2012 figures of 310,000 MT of credits and 240,000 MT of deficits. Cumulatively through the end of Q3 2012, there have been a total of about 2.376 million MT credits and 1.271 million MT deficits, for a net total of about 1.105 million MT credits. Ethanol continues to make up about 80% of the credits. The report also disclosed that there were 17 documented trades of credits under the LCFS, which were in the range of $10-30 per MT, the same range as reported in the Q2 report.

Pro-biofuel campaign launched by environmental organization targets California LCFS. A new campaign has been announced to support the development of next-generation biofuels. The group, FuelingGrowth.org, was formed by Environmental Entrepreneurs, an affiliate of the Natural Resources Defense Council, and it includes a social media effort and a website that highlights 80 biofuel firms across 27 states. According to the group’s spokesman, the effort will largely focus on California due to the threats to that state’s Low Carbon Fuel Standard.

California LCFS Indirect Land Use Change policies. The Renewable Fuels Association has written to the Chair of the California Air Resources Board, encouraging the Board to revise its policies towards indirect land use change, which RFA maintains results in unfairly assigning less-favorable carbon intensities for certain fuels under the LCFS regulations.

Economic impacts of LCFS. In October 2012, the California Business Alliance for a Green Economy disputed a June 2012 report that alleged that the LCFS regulations would hurt California’s economy. The Business Alliance found that the study, issued by the Western States Petroleum Association (WSPA) and conducted by the Boston Consulting Group, was based on “several significant inaccuracies and faulty assumptions.” WSPA defended the study in its own statement.

Oregon Low Carbon Fuel Standard 

Oregon LCFS public meeting
. As I reported in my Advanced Biotechnology for Biofuels blog, Oregon’s draft LCFS rules were presented in a public meeting on December 6-7, 2012. At this meeting, the Environmental Quality Commission voted to move forward with the first phase of the program, and require gasoline and diesel suppliers to begin reporting the carbon intensity of their fuels beginning in 2013. The state legislature would then have to decide whether to move to the second phase, which would be to require fuel producers and importers to achieve a 10% reduction in carbon intensity by 2025. However, the legislation as adopted in 2009 included a sunset date of 2015 for the program, and Governor Kitzhaber has reportedly decided that the state won’t implement these reductions unless the Legislature lifts the sunset date in its 2013 session. It has been reported that proponents of the legislation will make a lobbying effort in 2013 in favor of extending the program past this sunset date.

Opposition to Oregon LCFS program. A group known as Oregonians for Sound Fuel Policy, a group of associations, businesses and organizations that represent heavy fuel-users, was formed shortly before the December 2012 EQB meeting, with the goal of opposing the LCFS policy. The members of this group are concerned that the policy will cause volatile fuel prices and create unnecessary government regulation, especially burdening small businesses. Other industry groups have been reported in the press to oppose the legislation as well.

Previous Blog posts on Low Carbon Fuel Standards:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels


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