In Q3 2016 biodiesel and renewable diesel made up a combined 47% of the total. Their combined contribution has increased throughout the program. The combined credit contribution of biodiesel and renewable diesel make up the next largest contributor to the alternative transportation fuel pool. Flex fuel vehicles (FFVs) can run on up to 85% ethanol, but the demand for higher blends of ethanol just hasn’t materialized and CARB has not encouraged the use of E85. However, because most vehicles are limited to a 10% ethanol/gasoline blend there’s a constraint to how much ethanol can contribute to the overall transportation fuel pool. ![]() Currently ethanol is the greatest contributor to the alternative transportation fuel pool. The low CI fuels generating all the credits include ethanol, biodiesel, renewable diesel, compressed natural gas and biogas (CNG), liquefied natural gas and biogas (LNG), hydrogen, and electricity for electric vehicles (EVs). Parties outside the 230 RPs are not allowed to hold LCFS credits. Credit owners can only sell or trade their credits with other RP deficit holders. Credit transactions are reported to the LRT, including the transaction price in units of metric tons (MT) of LCFS credits. LCFS credits do not have a vintage and do not expire. Credits are retired when used to cover deficits per annual compliance report. The LRT tracks each transaction of fuel with its corresponding credit or deficit position, and sums for each RP. ![]() When transportation fuels are imported, refined, or sold in California, RPs and opt-in RPs enter the transaction level information into CARB’s central data system for the standard, the LCFS Reporting Tool (LRT). CARB approved alternative fuels producers can opt-in to the program these participants are also referred to as RPs. Petroleum importers, refiners, and wholesalers are Regulated Parties (RPs) under the LCFS. A fuel producer with deficits must have enough credits through generation and acquisition to be in annual compliance with the standard. Those fuels in the transportation fuel pool with CIs higher than the target generate deficits. CI is expressed in grams of CO2 equivalent per mega joule (gCO2e/MJ or g/MJ for short).įuels in the California transportation fuel pool that have a CI lower than the target established by CARB generate LCFS credits. In determining CI, the direct carbon emissions from renewable sources are not included in the calculation. CI is calculated using the GREET model (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) developed by the Argonne National Lab. The pathway is determined by assessing the GHG emissions throughout each stage of the fuel’s feedstock production, conversion, and use. The CI of a fuel is calculated by assessing the GHG emissions in the lifecycle or “pathway” of the fuel. The re-adopted LCFS became effective on January 1, 2016.ĬI is defined as the lifecycle GHG emissions for a fuel per unit of transportation energy delivered. The LCFS was re-adopted in 2015 to remedy the deficiencies and update the program provisions. The original CI reduction schedule was stayed by the California Appellate Court at 2013 levels due to deficiencies in the original LCFS adoption process. The LCFS was originally adopted in 2009 and became effective in 2011. The LCFS is administered by the California Air Resources Board (CARB). ![]() The goal of the LCFS is to reduce the carbon intensity (CI) of the transportation fuel pool by 10% by 2020. The LCFS applies to fuels used for transportation, including gasoline, diesel and their alternatives. (When you’re done here, check out our 2018 LCFS 101 update.)Ĭalifornia’s Low Carbon Fuel Standard is one of a group of programs designed to reduce greenhouse gas (GHG) emissions enacted through AB 32, the 2006 Global Warming Solutions Act, signed in to law by Governor Arnold Schwarzenegger. The LCFS can seem like an intimidating collection of acronyms, but it’s really just a fuel-neutral, market based program to develop alternative fuels markets and reduce GHG emissions attributed to transportation fuels used in California. We could go on for days about this stuff, but we’ll show a little discipline and just give you the high points. Based on that request we decided to put together a handy dandy LCFS guide. Not too long ago a friend checked in looking for an LCFS tutorial. FebruBy Kendra Seymour Policy, White Papers
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