On January 9, 2007, Governor Schwarzenegger pledged that he would establish the world’s first Low Carbon Fuel Standard (LCFS). It will apply to all transportation fuels sold in California, with the goal of reducing the carbon intensity of California’s passenger vehicle fuels at least 10 percent by 2020. The LCFS includes provisions for market-based mechanisms – such as carbon credit trading – that will allow fuel providers to meet the new requirements in the most cost-effective manner. The standard is expected to substitute low-carbon fuels for up to 20 percent of current vehicle gasoline consumption and greatly expand the number of alternative and hybrid vehicles in the state. It will also aid California as it seeks to meet its targets under AB 32, the historic legislation enacted in September 2006 that requires the state to achieve 1990 greenhouse gas emission levels by 2020.
Executive Order S-01-07 (signed January 18, 2007)