California’s LCFS Works its Way East
California-style LCFS is working its way East. The adoption of a similar standard along the Eastern seaboard could wipe Midwest ethanol off the map along the coasts.
California’s low carbon fuel standard, a controversial law that attempts to quantify the carbon-intensity values and emissions from “well to wheels” into the state’s market for certain fuels, is influencing decisions in eleven Eastern states. If adopted in the East, along with potentially Oregon and Washington, the strict standards may effectively wipe ethanol and first generation feedstocks off the map along the U.S. coasts.
A low carbon fuel standard is far more comprehensive and ambitious than the EPA’s renewable portfolio standard (RPS2), which takes a more conservative approach to quantifying the pollution created by extracting, growing, or refining fuels (lifecycle analysis). Although RFS2 represents the first time a U.S. industry has been evaluated, monitored, and regulated based on GHG performance, California’s LCFS goes much further by imposing significant indirect land use change penalties for Midwest corn.
The standard has prompted three lawsuits (here and here) from various industry groups (read Is California’s Low Carbon Fuel Standard Compatible with RFS 2.0? for an in-depth look on the constitutional implications of the law). At the top of the list are key corn ethanol lobby groups who argue that LCFS unfairly penalizes Midwest corn ethanol and impedes the country’s goal of increasing the use of renewable fuels in the transportation sector. Whatever the outcome, the stage is set the stage for a serious fight in the biofuels arena. Regardless of the outcome, sustainable, low-input, non-food second generation feedstocks will benefit.
Designed to spur innovation in the transportation fuel industry, which accounts for 40 percent of the California’s annual GHG emissions, the LCFS aims to reduce the “life-cycle carbon intensity” of fuels by 10 percent over the next decade. The standard works by setting progressively lower carbon intensity baselines for gasoline and diesel sold within the state.
The question now is whether the eleven Eastern states (air regulators from Massachusetts, New Hampshire, Vermont, Rhode Island, New Hampshire, New York, New Jersey, Connecticut, Maine, Pennsylvania, Maryland and Delaware have created “NESCAUM” to back efforts to create a regional LCFS) will adopt the California Air Resources Board’s exact standard — it appears it might, though it is still early.
Close ties between CARB and NESCAUM, suggest that many of the ideas used to create California’s LCFS are likely to be borrowed when NESCAUM begins crafting standards. The hope within the ethanol industry is something akin to RFS2. If anything like California, NESCAUM’s decision could mean the end of ethanol along the coasts.