California Air Resources Board Releases Proposed Regulations for a Low Carbon Fuel Standard

On March 5, 2009, the California Air Resources Board released proposed regulations for a Low Carbon Fuel Standard (LCFS), which would require transportation fuel providers to lower the life-cycle carbon intensity of their fuels over the next decade. The life-cycle carbon intensity is the amount of carbon dioxide equivalent (CO2e) emissions generated from the production, transportation, and combustion of the fuel per unit of energy contained in the fuel. The regulation contains provisions to take into account both direct and indirect emissions; the latter includes, for example, emissions that result from land-use changes due to fuel production.

Fuel providers may comply with the LCFS in one of four ways: (1) by achieving the specified carbon intensity as an average of the products in the fuel mix, (2) by achieving the carbon intensity for each product in the fuel mix, (3) by purchasing credits from fuel providers that perform better than the LCFS for their own products, or (4) by using credits banked from previous years. Separate carbon intensities will be established for gasoline and diesel fuels and their respective alternative products; these standards will reduce the carbon intensity of transportation fuels 10 percent below 2010 levels by 2020. This is expected to reduce lifecycle greenhouse gas emissions by 23 million metric tons of CO2e by 2020.

The Air Resources Board will vote on the LCFS regulations at a hearing in mid-April.

Press Release
Proposed Regulation