The California Low Carbon Fuel Standard (LCFS) program is undergoing a rulemaking process to update carbon intensity targets and guidelines for program participation. Currently, the California Air Resources Board (CARB) is scheduled to vote on final amendments to the LCFS program on November 8, 2024.
CARB is the state governing body that oversees the low-carbon fuel policy. CARB approved a LCFS regulation in 2009 as part of a larger state effort to cut greenhouse gas (GHG) emissions and other smog-forming and toxic air pollutants. CARB began implementation of the LCFS program in 2011—the first state in the nation to do so. Since then, several states have adopted similar LCFS measures that largely follow CARB’s model. Oregon, Washington, and British Columbia (CAN) are working through a regional agreement to specifically align their policies. In 2018, CARB updated its LCFS program to strengthen carbon intensity benchmarks through 2030; this effort seeks to align with California’s 2030 GHG emission reduction target. LCFS programs are modeled to measure the carbon intensity of a fuel (the CI score). The program requires gradually lower carbon emissions from the transportation pool. Fuels with a CI score lower than the baseline generate credits, while those above the benchmark generate deficits. These credits and deficits are measured in metric tons of GHG emissions. Fuel providers must purchase excess credits if they have a net deficit. Those with a surplus of credits can sell their excess to these buyers.
Increased Feedstock Imports Push Soy from Biofuels (8/15/24)
Used Cooking Oil Imports for Biofuels Exceed Expectations (4/4/24)
California’s Proposed Changes to Fuels Program Presents Mixed Bag for Soybeans (1/11/24) *Note: This publication addressed a previous proposal and not the current one.
CARB recently completed a 15-day notice of updated changes to the LCFS that strays significantly from the “Initial Statement of Reasons” document from December 2023 that included the preliminary proposed LCFS amendments. ASA commented on both items at the time of publication and continues to collaborate to shape the final LCFS in a more favorable way.
The latest proposal (August 2024) includes the following concerning provisions:
Capping soybean oil: Establishing 20% vegetable oil cap (soy and canola in aggregate) on a per company-wide basis and biofuels from these vegetable oils beyond this amount will not generate credits. CARB alluded to a potential cap on vegetable oils last year but did not include a cap in its December proposal or subsequent workshops. CARB staff argued then that a virgin vegetable oil cap, as proposed by the Environmental Justice Advisory Committee (EJAC), led to worse environmental outcomes for California (Figure 1).
CARB now argues that it does not want the LCFS to spur producers to increase vegetable oil-based biomass-based diesel (BBD) production based solely on California demand and argues that additional zero-emission vehicle (ZEV) sales will decrease need.
Of note, CARB data notes that virgin oils used for production of BBD in Q1 of 2024 were 175 million gallons, the equivalent of 30% of the BBD shipped into California.
Limiting BBD pathways: Giving the CARB executive officer the discretion to stop accepting any new BBD pathway applications in 2031 if ZEV sales hit a certain threshold—limiting future expansion into this market.
Maintaining sustainability criteria: Creating a timetable for sustainability requirements with specific phase-in benchmarks. CARB references EU-RED as an allowable certification scheme but could approve others (potentially whatever scheme comes out of the USDA RFI, for example). Starting in 2026, fuel producers would have to collect and submit farm boundaries where soybeans are sourced.
Regional land use change: Developing more conservative land use change values for feedstock-producing world regions and assigning different scores depending on growing area (e.g. North America versus South America).
New carbon intensity thresholds: Ramping up carbon intensity (CI) reductions immediately from 5% in 2025 to 9% before flattening out the curve over time and keeping the same 30% reduction target in 2030.
