California Tightens Low Carbon Fuel Regulations Amid Controversy
California has strengthened the Low Carbon Fuel Standard (LCFS). This move by the California Air Resources Board aims to reduce greenhouse gas emissions from the state's transportation sector. The decision made on Friday is seen as part of the state's efforts to meet its ambitious climate change goals.
The 14-member board approved the changes with a vote of 12 to 2 after about eight hours of testimony from supporters and critics, as well as extensive discussions among board members. The amendments to the LCFS, which has been in place since 2011, now foresee a larger reduction in the carbon intensity of transportation fuels by 2030. Producers will be required to achieve a 30% reduction, compared to the previous 20% target. Additionally, a new target has been set for a 90% reduction by 2045.
During the meeting, advisory board member State Senator Henry Stern emphasized the importance of California maintaining its climate leadership, especially after recent political changes at the national level. These amendments are viewed as a critical step for California to preserve its leading role in climate policy despite the challenges posed by changing federal administrations.
The LCFS requires producers that exceed certain carbon emission baselines set by the air resources board to obtain tradable credits. Low-carbon fuel producers can generate and sell these credits. This policy has led to a significant increase in the production of renewable diesel and biogas, causing credit prices to drop from over $200 in 2020 to about $70. The revisions to the LCFS aim to support credit prices and further encourage the production of low-carbon fuels.
Support for the changes came from biofuel producers and certain climate advocates within the state. However, oil companies, consumer advocates, and environmental groups expressed opposition. Critics are concerned that the changes could raise gasoline prices and prolong oil and gas production. They also argue that the policy may favor fuels derived from food products and large dairy operations over the transition to electric vehicles.
The board’s internal environmental justice advisory committee opposed the revisions, citing concerns including an exemption for jet fuel producers and significant subsidies for dairy methane projects. Despite these expressed concerns, the board has moved forward with the changes expected to impact California's transportation fuel future.