California’s Low Carbon Fuel Standard

 

Up to 30 million cars, trucks and buses traverse California roads, responsible for almost 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 by 10% by 2020 by phasing in lower carbon fuels. The LCFS is working to transform the fuels market from being almost entirely petroleum-based to a diversified one with wide-scale use 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.

This performance-based standard, which is part of California’s groundbreaking Global Warming Solutions Act (AB 32), 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 57%.

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

A study by the American Lung Association and Environmental Defense Fund estimates that the LCFS, together with statewide carbon pollution limits (known as AB32 cap-and-trade), has helped avoid $2 billion in health-related impacts from air pollution so far. These benefits will continue to grow to $8.2 billion annually by 2025 as the use of very low-carbon fuels – like electricity, hydrogen, advanced biofuels and biogas – continues to grow.

The study also estimates that through 2015, these climate programs helped avoid nearly 90,000 cases of respiratory symptoms, 8,000 cases of asthma-related health issues, and 15,000 lost work days. Over time, these numbers will also continue to grow.

Carbon Pollution and Petroleum Dependency

Since 2011, the LCFS has helped to slash 26 million tons of carbon pollution through use of lower carbon fuels rather than petroleum-based gasoline and diesel. As a result, California has avoided 8.5 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

Industry is exceeding the Low Carbon Fuel Standard’s targets and has outperformed the standard by 61% on average since the start. The program has helped increase the market value of the clean fuels market – including investments in production and distribution — by an estimated $1.6 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.