California will vote on stricter regulations for low-carbon fuels policy

California regulators are voting on Friday whether to tighten up a policy that aims to boost low-carbon fuels in order to reduce greenhouse gas emissions and achieve the state's ambitious goals for climate change.

California's Low Carbon Fuel Standard, which has been around since 2011, is being changed to require a greater reduction in carbon intensity in transportation fuels. This would be required by 2030 for fuel producers in order to receive the tradable credits of the program.

Transport accounts for approximately 50% of the greenhouse gas emissions in the state.

While some biofuel producers, as well as climate activists in California, support the proposal's introduction, others such oil companies and consumer groups say that the move will increase the price of gasoline for Californians. Environmental groups also argue that the policy will extend oil and gas production and prioritise fuels made from foods crops rather than encouraging a shift to electric cars.

Fuel makers are required to purchase tradable credit under the LCFS if their products emit more carbon than a benchmark set by regulators from the California Air Resources Board. The credits can be generated by refiners who produce low-carbon gasses and fuels.

In recent years, the policy has sparked a boom in biodiesel and renewable diesel production. Credit prices have dropped from $200 to about $70 in 2020. The policy revisions aim to boost credit prices and encourage low-carbon fuel production.

According to the proposed amendments, LCFS will require a reduction of 30% in carbon intensity for transportation fuels by 2030. This is up from the current 20%. The revisions also set a new goal of reducing carbon intensity by 90% by 2045.

The measures are supported by developers of projects that produce biofuels from organic waste.

Patrick Serfass said, "This program represents actual reductions in emission," in an interview. These are actual tons of CO2 which equates to an actual credit. This is encouraging private investment to build more projects.

However, there is some concern about the possibility of higher gas prices.

CARB released an analysis last year that said changes to the fuel tax could raise the average price of gas by 37 cents per gallon from 2024 to 2030. The board has said that models are not accurate in predicting future fuel prices.

The CARB's internal Environmental Justice Advisory Committee has asked it to reject these revisions. They cite, among others, an exemption for jet-fuel producers and large subsidies given for dairy methane project.

The Environmental Justice Advisory Committee wrote to CARB chair Liane Randolph in a letter last month that the latest CARB proposal did not make the LCFS program more equitable. It also did not align it with CARB air quality standards or ZEV goals. Instead, the proposal perpetuated the use of outdated combustion fuels, causing harm to the environmental justice communities who bear the brunt.

Dean Florez, a member of the CARB board, publicly stated this week his concern about increased costs for consumers. (Reporting and editing by Leslie Adler; Nichola Groom)

(source: Reuters)