California’s Low Carbon Fuel Standard

 

More than 30 million cars, trucks and buses traverse California roads, responsible for roughly 40% of the state’s total carbon pollution while contributing to smog and soot particles that pollute the air we breathe.

In 2011, the state began implementing the Low Carbon Fuel Standard (LCFS), which requires the oil industry to gradually reduce the carbon-intensity of gasoline and diesel 10% by 2020 by phasing in lower carbon fuels. In 2018, the California Air Resources Board is considering a proposal to extend the program to a 20% reduction in fuel carbon intensity by 2030, consistent with the state’s groundbreaking climate policy, SB 32. One scientific assessment finds a LCFS of 22% and perhaps as much as 25% is attainable in 2030.

The LCFS is working to transform the fuels market from one that relies almost entirely on petroleum-based fuels to a diversified one that uses a variety of alternative fuels. This market-based transition to clean, low-carbon fuels is leading to technology innovation that’s helping California meet its long term climate, clean air, and public health goals. Just as the state requirements are helping shift our electricity mix to more renewables like wind and solar, the LCFS is also delivering the clean fuels we need today and going forward.

A performance-based standard, the LCFS, doesn’t favor one fuel over another but instead creates incentives for clean fuels. Thanks to the LCFS, the fuels industry now offers lower carbon fuels like advanced biodiesel and renewable diesel produced from waste oils, biogas captured from landfills and dairies, electricity and hydrogen for electric-drive vehicles, and advanced ethanol. In fact, fuel producers have already dramatically lowered their carbon intensities since 2011 while increasing the use of clean alternative fuels by 64%.

It’s Working

Expanding clean fuel options gives California drivers, including transit agencies, more environmentally preferable choices for running their vehicles. Producing lower carbon fuels also leads to more technology-driven, good jobs in the state.

Thus far, the state’s LCFS program has avoided millions of tons of carbon pollution and more than $2 billion in negative public health impacts. These benefits will continue to accrue and grow as the standard is fully phased-in. According to the latest Air Resources Board’s latest quarterly compliance report tracking industry performance, the LCFS has produced these benefits.

Health

study by the American Lung Association and Environmental Defense Fund estimated that the LCFS, when combined with other strategies like carbon pricing, would avoid $2.4 billion so far in pollution-related health costs. These benefits were estimated to grow to $8.2 billion annually by 2025 as the use of very low-carbon fuels, such as electricity, hydrogen, advanced biofuels and biogas, increased. The study also estimated that through 2017, these climate programs would help avoid over 170,000 cases of respiratory symptoms, 14,000 cases of asthma-related health issues, and 28,000 lost work days.

While current LCFS compliance is being met with different, specific clean fuel volumes than the scenarios assumed in the 2014 study, health benefits from these programs will continue to grow as the use of cleaner fuels and cleaner vehicles increase due to these programs.

Carbon Pollution and Petroleum Dependency

Since 2011, the LCFS has helped to slash 33 million tons of carbon pollution through use of lower carbon fuels. As a result, California has avoided 9.9 billion gallons of petroleum. The LCFS is among the largest pollution reduction measures under California’s climate program. Increasing the use of low-carbon fuels is one of the primary strategies to meet California’s 2030 and 2050 carbon and petroleum reduction targets.

Industry Performance

Through early 2017, industry exceeded the Low Carbon Fuel Standard’s targets. The program has helped increase the value of the clean fuels market — including investments in production and distribution — by an estimated $2 billion since 2011. While this is still only a fraction of the hundreds of billions spent over the same time period on petroleum-based fuels in California, the LCFS is jumpstarting increased investments across the clean fuel supply chain.