RFA submits comments to CARB regarding proposed LCFS changes

In California, in comments submitted to the California Air Resources Board on potential changes to the state’s Low Carbon Fuel Standard, the Renewable Fuels Association identified several areas in CARB’s proposal and underlying analysis that need improvement. RFA also stressed its support for the LCFS program and desire to see technology-neutral carbon reduction programs adopted in other states or at the national level.

RFA Chief Economist Scott Richman stressed three areas where improvement is needed:

·      CARB has all the data needed to support the immediate approval of E15 for use in California, which would reduce pervasive compliance deficits in California’s gasoline pool. Migrating all E10 to E15 in California today would result in approximately 2 million metric tons annually of additional GHG reductions.

·      Although the California Transportation Supply (CATS) model used by CARB incorporates the average carbon intensity (CI) of ethanol in the market today and assumes that CI improvements will continue in the future, it assumes that the CI of ethanol produced at facilities using carbon capture and sequestration (CCS) will be flat over time. Richman stressed that, on the contrary, it is reasonable to expect substantial reductions in the CI of ethanol broadly, and that ethanol with CCS in particular is likely to achieve steady reduction and, ultimately, net-zero emissions over the next two decades.

·      Finally, the current low credit prices under the LCFS are clearly inhibiting new investment in low-carbon fuel production. The long period of time (up to three years) to update the LCFS given the regulatory process in California is creating uncertainty as to the longer-term trajectory of the program, and the incorporation of a compliance acceleration mechanism into the LCFS could potentially address this problem.