BIOMASS HUB

In December, two ethanol trade groups, Growth Energy and the Renewable Fuels Association, filed a suit in a US Federal District Court in Fresno, California for declaratory and injunctive relief against California’s Air Resources Board.  The action challenges the constitutionality of California’s Low Carbon Fuel Standard (LCFS) arguing that the recently adopted rules violate the Supremacy Clause and Commerce Clause of the US Constitution.

In 2006, the California Legislature passed the “Global Warming Solutions Act” to address public concern about global warming.  On April 23, 2009, the California Air Resources Board (CARB) approved the state’s LCFS, which is a set of regulations governing the marketing of gasoline-ethanol blends sold in California.  The LCFS, which is scheduled to go into effect in 2011, requires that oil refineries and distributors ensure that the mix of fuel they sell in the California market meets established declining targets for greenhouse gas (GHG) emissions, specifically 10 percent reduction in carbon intensity by 2020.

The rule is intended to stimulate research around alternatives to oil and mitigate GHG emissions.  Its inclusion of controversial indirect land use effect measures adversely effects the US corn ethanol industry in favor of less carbon-intense feedstock sources, including cellulosic ethanol from algae, wood, agricultural waste such as straw and switchgrass, natural gas from municipal solid waste, and ethanol from sugar.

In its complaint, Growth Energy and the Renewable Fuels Association argue that the LCFS:

1. Conflicts with and is preempted by federal law, including the Energy Independence and Security Act of 2007 (EISA);
2. Interferes with the regulation of interstate commerce; and
3. Discriminates against out-of-state corn ethanol producers and importers and improperly regulates their extraterritorial conduct.

The suit adds fuel to the debate about whether a federal standard should be implemented.  Most recently, California’s standard was adopted by eleven governors from the Northeast and Mid-Atlantic region who signed a Memorandum of Understanding (PDF available here), ten of which are members of the Regional Greenhouse Gas Initiative (RGGI).

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