• California Adopts Low-Carbon Fuel Standard
  • July 14, 2009 | Author: Thomas M. Donnelly
  • Law Firm: Jones Day - San Francisco Office
  • As reported in the Spring 2009 issue of The Climate Report, the California Air Resources Board (CARB) is establishing various programs to implement California's Global Warming Solutions Act (AB 32), the law that requires a reduction in California's greenhouse gas emissions to 1990 levels by the year 2020. On April 23, 2009, CARB adopted a resolution directing staff to finalize regulations for a Low-Carbon Fuel Standard (LCFS), whose goal is to reduce the carbon intensity of California transportation fuels by at least 10 percent by 2020.

    In arriving at the resolution, CARB found that California's transportation sector is the leading source of greenhouse gas emissions in the state, and that the LCFS will complement California's cap and trade program. The new regulations will require providers, refiners, importers, and blenders of fuel to ensure that fuels for the California market meet a declining average carbon intensity standard. Carbon intensity will be determined by examining the sum of greenhouse gas emissions associated with the production, transportation, and consumption of the fuel, also referred to as the "fuel pathway."

    Separately, on June 30, 2009, U.S. EPA Administrator Lisa Jackson reversed a decision by her predecessor and granted the state's request for a Clean Air Act waiver that will enable California to implement its own greenhouse gas emissions limits for cars and light trucks until a recently announced federal program is in place, beginning with model year 2012 vehicles. While at least 13 other states have expressed a desire to follow California's lead, automakers continue to stress the need for uniform national standards.

    On May 22, 2009, California EPA announced the formation of an Economic and Allocation Advisory Committee that will advise CARB on implementation of AB 32 and the associated cap and trade system. Mirroring a debate that has played out in Congress, a key issue before this committee is whether CARB should auction greenhouse gas emission allowances or allocate them among covered sources for free.