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The California Air Resources Board has readopted the Low Carbon Fuel Standard (LCFS), which requires a 10 percent reduction by 2020 in the carbon intensity of transportation fuels.

In a statement, Air Resources Board Chair Mary D. Nichols said: "Today's action builds on years of successful implementation and will continue reducing carbon emissions from the transportation sector. Transportation is the largest source of greenhouse gases in the state.

"This program is a key element of California's plans to enact Governor Brown's Executive Order mandating a 50 percent cut in petroleum use by 2030."

The LCFS program requires that transportation fuels used in California meet a baseline target for carbon intensity. That target is reduced each year. If a product is above the annual carbon intensity target, the fuel incurs deficits. If a product is below that target, the fuel generates credits which may be used later for compliance, or sold to other producers who have deficits. So far, fuel producers are over-complying with the regulation.

Carbon intensity is determined through a life cycle analysis measuring the amount of carbon generated during the extraction, production, transportation, and combustion of a fuel. The LCFS does not require use of any specific fuel, only that regulated parties find a blend of fuels and credits that will meet the declining target each year.

The LCFS is designed to support California's effort to reduce greenhouse gas emissions in accordance with the 2020 target of Assembly Bill 32 and to achieve further reductions beyond that. The regulation is also intended to spur innovation in transportation fuels and to reduce California's dependence on petroleum.

The decline in the LCFS carbon intensity targets was frozen due to a legal challenge. To address the court's ruling and to strengthen the program, the Air Resources Board readopted the LCFS regulation following public testimony delivered on September 24 at the first of a two-day Board meeting.

The readopted version of the LCFS includes a number of modifications developed with stakeholder input. These include:

- Incorporating additional cost containment in response to stakeholder concerns about possible price spikes by including a mechanism to cap LCFS credit prices;

- Streamlining the application process for alternative fuel producers seeking a carbon intensity score;

- Improving the process for earning LCFS credits by charging electric vehicles.

Alternative diesel fuels

The Board has also adopted a regulation governing alternative diesel fuels (ADF). The regulation puts in place a three-step process beginning in 2016 to create a path to bring cleaner diesel substitutes into the market. This regulation also establishes requirements and fuel specifications for biodiesel to ensure the emissions of nitrogen oxides (NOx) from biodiesel use will not increase, and will be reduced over time. Biodiesel and other ADFs can help producers achieve their target under the LCFS.