New study looks at California’s LCFS and low-carbon liquid fuels

In California, a new study co-authored by Propel and consulting firm ICF shows that consumers will make low carbon purchasing decisions if given the opportunity to do so and that low carbon liquid fuels must play a more significant role to meet California’s 2020 and 2030 carbon reduction goals. The research also shows the current policy model will need to change to allow more low carbon capable vehicles to enter the market.

The study illustrates key points on the LCFS’ size, scope and need for equity including that the LCFS is expected to deliver more GHG reductions than all other transportation programs combined and that the pricing forecasts, and forecasted deficit generation—linked to gasoline and diesel fuel consumption—suggest that the annual market value of credits traded will approach $4 billion by 2022 (or ~$190/MT), with a cumulative market value exceeding $17 billion in 2022. The study also shows that low-carbon fuels need to make up 25+% market share to achieve the 2020 goal and even more for 2030 (more than double to roughly 5 billion gallons).