Low Carbon Fuel Standard Program Background

This page last reviewed February 2, 2016


This page provides information regarding ARB's Low Carbon Fuel Standard Program background pursuant to the California Assembly Bill AB 32 and the Governor's Executive Order S-01-07.


Executive Order S-1-07, the Low Carbon Fuel Standard (LCFS) (issued on January 18, 2007), calls for a reduction of at least 10 percent in the carbon intensity of California's transportation fuels by 2020. It instructed the California Environmental Protection Agency to coordinate activities between the University of California, the California Energy Commission and other state agencies to develop and propose a draft compliance schedule to meet the 2020 target. Furthermore, it directed ARB to consider initiating a regulatory proceedings to establish and implement the LCFS. In response, ARB approved the LCFS in 2009 and implemented in 2010 as a discrete early action measure under AB 32 with requirements to reduce the carbon intensity (CI) of gasoline and diesel fuels by at least 10 percent by 2020 with a 2010 baseline. In addition, ARB subsequently approved amendments to the LCFS in December 2011, which began implementation on January 1, 2013. As the result of a court ruling that found procedural issues related to the original adoption of the LCFS, ARB re-adopted the LCFS regulation in September 2015, and the changes went into effect on January 1, 2016. The program establishes a strong framework to promote the low carbon fuel adoption necessary to achieve the Governor's 2030 and 2050 greenhouse gas goals.


What is the Low Carbon Fuel Standard?

The Low Carbon Fuel Standard (LCFS) promotes the use of greenhouse-gas-reducing transportation fuels (such as liquid biofuels, renewable natural gas, electricity, and hydrogen) through a fuel-neutral declining carbon intensity standard. Carbon intensity is a measure of the GHG emissions associated with the production, distribution, and consumption steps in the "life cycle" of a transportation fuel. In order to achieve the GHG reductions at the lowest cost and in the most consumer-responsive manner, the LCFS utilizes a market-based credit trading system to allow providers to choose how they reduce emissions while responding to consumer demand.

Other jurisdictions are following California's footsteps, which is evident in the Pacific Coast Collaborative, a regional agreement between California, Oregon, and British Columbia, to strategically align policies to reduce greenhouse gases and promote clean energy. ARB has been working with these jurisdictions. Overtime, these LCFS programs will build an integrated West Coast market for low-carbon fuels that will create greater market pull, increased confidence for investors of low carbon alternative fuels, and synergistic implementation and enforcement programs.

Rulemakings

  • 2015 Re-Adoption of LCFS (Board Hearing Dates: February 19, 2015 and September 24/25, 2015)
    • OAL Approval: November 16, 2015
    • Start of Implementation: January 1, 2016
    • Purpose of Rulemaking:
      • Addressed a court ruling that found procedural issues related to the original adoption of the LCFS
      • New provisions designed to foster investments in the production of low-CI fuels, offer additional flexibility to regulated parties, update critical technical information, simplify and streamline program operations, and enhance enforcement
      • Modified 2016 through 2019 requirements of reducing the average carbon intensity of California transportation fuels
      • Created a year-end "Credit Clearance" process to provide additional compliance options if the LCFS credit market gets tight
      • Redesigned the Fuel Pathway process from using Method 1 and Method 2 to using Tier 1 and Tier 2 approach
      • Updated models used to calculate carbon intensity
      • Included the low-complexity/low-energy-use refinery provisions
      • Revised crude oil provisions
      • Established the Alternative Fuels Portal (AFP)
      • Added electricity provisions
      • Enhanced the enforcement provisions
  • 2011 Amendments (Board Hearing Date: December 16, 2011)
    • OAL Approval: November 26, 2012
    • Start of Implementation: January 1, 2013
    • Amendments
      • Added specific opt-in and opt-out provisions
      • Enhanced the regulated party definitions
      • Converted the rulemaking process for the approval of new or modified pathways into a certification program
      • Developed a credit bank and trading system tool
      • Created a incremental deficit approach for petroleum-based fuels to replace HCICO provisions
      • Revised the regulated party provisions for electricity
  • 2009 Rulemaking (Board Hearing Date: April 23, 2009)
    • OAL Approval: April 15, 2010
    • Start of Implementation: April 15, 2010
    • Major Provisions
      • LCFS applies to most types of fuels used for transportation in California
      • LCFS achieves GHG emission reductions by incrementally reducing the allowable carbon intensity of transportation fuel used in California
      • The regulation specifies the criteria under which a person would be deemed a regulated party for each particular fuel and how the responsibility for complying with the LCFS can be transferred
      • Included a voluntary opt-in provisions
      • Included requirements for progress reporting and annual account-balacing reporting
      • Included requirements for recordkeeping
      • Regulated parties are required to establish physical pathway evidence for transporting fuels subject to LCFS
      • Included provisions governing credits and deficits and reconciliation of shortfalls
      • Determination of carbon intensity values
      • Determination of vehicle efficiency adjustment factors
      • Required Executive Officer Review and Multimedia Evaluations

Contact Us

If you have questions regarding this program, please contact Sam Wade, Chief, Transportation Fuels Branch at (916) 322-8263.

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