Environmental protection is an eternal topic. Global warming caused by carbon emissions is changing our economy, health and communities in diverse ways. One third of the greenhouse gas emissions in the US are from Traffic. Especially in California, this rate reaches up to around 40%. Obviously, the speed of California traffic greenhouse gas emissions increased faster than the population growth which become the main source of environmental problems. In these circumstances, the Low-carbon Fuel Standard (LCFS) were released to fight global warming by reducing the amount of carbon emitted when transportation fuels are used. Adopted in 2007, California’s Low Carbon Fuel Standard requires a 10 percent reduction in the carbon intensity of transportation fuels by 2020, as measured on a lifecycle basis. The goals of the program are to reduce greenhouse gas emissions from the transportation sector, diversify the transportation fuels sector, and to spur investment and innovation in lower carbon fuels. Under the LCFS, fuel providers would be required to measure the impact of their products on global warming on a per-unit basis and reduce this impact. There is no doubt that this standard can stimulate improvements in transportation-fuel technologies, and it can be a good template for other states and other countries to imitate.
Background
California contributes 7.5% of the total greenhouse gas (GHG) emissions in the USA, or 1.8% of global GHG emissions. In 2005, Governor’s Executive Order S-3-05 required that California reduce GHG emissions to 1990 levels by 2020 and to 80% below 1990 levels by 2050.
As it mentioned above, the goal of the standard is measured on a lifecycle basis. The lifecycle includes two parts of the total fuel cycle. Here, the term WTW which represents the “well-to-wheels” are used to discuss the total life cycle emissions for a vehicle-fuel combination including the fuel production, processing and transportation and the vehicles.
Goals
The design of the Low Carbon Fuel Standard (LCFS) should therefore respond to the following goals:
1. Encourage investment and improvement in current and near-term technologies that will help meet the 2020 goal
2. Stimulate innovation and development of new technologies that can dramatically lower GHG emissions at low costs and can start to be deployed by 2020 or soon thereafter, creating the conditions for meeting the later 2050 goal
3. Contribute to attainment of related objectives as much as possible, including economic growth, air quality and other environmental protection goals, affordable energy prices, environmental justice, and diverse and reliable energy sources.
Work Mechanism
The Low-carbon Fuel Standard requires producers of petroleum-based fuels to reduce the carbon intensity of their products, beginning with a quarter of a percent in 2011 culminating in a 10 percent total reduction in 2020. Petroleum importers, refiners and wholesalers can either develop their own low carbon fuel products, or buy LCFS Credits from other companies that develop and sell low carbon alternative fuels, such as biofuels, electricity, natural gas or hydrogen.
The LCFS has several principal elements. First, it establishes a life cycle-scale assessment of the carbon content for each fuel used in the LCFS. This method captures the energy used to create each fuel from the initial point of extraction or cultivation, to transport, to refining, to distribution to the final point of sale.
Second, the LCFS establishes an implementation schedule. 2010 was a reporting year, while 2011 was the first year of formal implementation where petroleum fuel producers and importers had to reduce the carbon content of their fuel by a quarter of a percent. The reduction requirements will increase steadily to the full 10% reduction in 2020.
The LCFS program also has a registry of alternative fuel producers who have submitted all appropriate documentation and are eligible to participate in the LCFS Credit Market and sell or trade credits for their low carbon alternative fuel products.
Implementation Status
The Low Carbon Fuel Standard sets declining annual targets, starting slowly with a 0.25% reduction in 2011 and increasing to 10% reduction by 2020.
In 2012, low carbon fuels displaced roughly 1.06 billion gallons of gasoline and 45 million gasoline gallon equivalents of diesel (representing 6.2% of total gasoline and diesel fuel) at average carbon intensities of 84.95g CO2e/MJ and 58.34g CO2e/MJ respectively.
By the end of 2012, the program recorded net excess credits of 1.285 million metric tons (MMT) of CO2e. This bank of excess credits represents about half of that needed to meet the 2013 LCFS obligation, though some of these credits may be required to offset deficits created from use of higher carbon petroleum fuels in 2011 and 2012.
LCFS credit prices reported to the California Air Resources Board (ARB) averaged about $13.50/MT CO2e in 2012 and $27.70 for the first two months of 2013.
Credit prices increased to over $35 between mid-January and late February 2013, according to Oil Petroleum Information Service (OPIS) and Argus Media (Argus) reports.
Since implementation, regulated parties have responded to the LCFS by lowering the CI of the California fuel pool. Continued LCFS compliance will require continued CI reductions.
Impacts
The Low-carbon Fuel Standard in California is the first standard to reduce the carbon emission in transportation sector in US. It has been presented as a model to establish a national low-carbon fuel standards at the federal level.
The low carbon fuel standard differs significantly from President Bush’s proposal to indiscriminately expand “alternative fuels” without paying attention to their environmental consequences. Instead of bringing coal-based liquid fuels and more of today’s corn-based ethanol in Bush’s proposal, the LCFS has incentives and rules needed to transform these technologies so that they can compete in energy markets that take climate change seriously.
It will take time to solve the climate change and oil import problems because the cars last for many years and the energy supply system also changes slowly. If it successes in 2020, the new low carbon fuel standard will give the agricultural, energy and automotive industries incentives to lower the carbon intensity of today’s fuels and begin to develop the next generation of truly low-carbon fuels and vehicles
References
[1] Alexander E. Farrell, Daniel Sperling. A Low-Carbon Fuel Standard for California Part 1: Technical Analysis. Davis, CA, Institute of Transportation, August 1, 2007
[2] Alexander E. Farrell, Daniel Sperling. A Low-Carbon Fuel Standard for California Part 2: Policy Analysis. Davis, CA, Institute of Transportation, August 1, 2007
[3] Elizabeth Burton, Niall Mateer, John Beyer. California’s Policy Approach to Develop Carbon Capture, Utilization and Sequestration as a Mitigation Technology. Energy Procedia, 2012. Available from www.sciencedirect.com
[4] Tiax LLC. Full Fuel Cycle Assessment: Well-to-Wheels Energy Inputs, Emissions, and Water Impacts. California Energy Commission, CEC-600-2007-004-REV, August 1, 2007
[5] ICF International, California’s Low Carbon Fuel Standard: Compliance Outlook for 2020. CalETC, June, 2013
[6] News Release. UC experts detail new standard for cleaner transportation fuels. Berkeley, CA, August 2, 2007. Available from http://www.energy.ca.gov/low_carbon_fuel_standard/
[7] Sonia Yeh, Julie Witcover, Jeff Kessler. Status Review of California’s Low Carbon Fuel Standard. Research Report – UCD-ITS-RR-13-06, Davis, CA, Institute of Transportation, 2013
[8] Low Carbon Fuel Standard. Fuels and Transportation Division Emerging Fuels and Technologies Office, Available from http://www.energy.ca.gov/low_carbon_fuel_standard/ ; accessed on March 10, 2014