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INTERIM GUIDE TO THE
Making Sense of California's Low Carbon Fuel Standard
Reduction of the Carbon
Intensity (CI) and the Greenhouse Gas (GHG) emissions associated with transport fuel production are the driving
principles behind development of California's Low Carbon Fuel Standard (LCFS). California is not
alone in seeking these goals, nor is the State at the fore-front of the many parallel efforts. Globally, we are
witnessing the development and adoption of mandatory, voluntary, and hybrid schemes to ensure a socially,
economically, and environmentally sustainable fuel supply.
For California, the emphasis is
upon measurement and comparison of the entire life-cycle "pathway" characteristics of transport fuels. For most
global schemes of standards and their certification constructs, the emphasis is primarily on the rather elusive
concept of sustainability while focusing on rapid commercialization and market penetration of
California's LCFS contains
provisions paralleling European biofuels sustainability "schemes" along with unique aspects such as "carbon
intensity". California's LCFS would be well-advised to clearly meet the European minimum key criteria, assuming
a clear "California first" frame of reference. It is not enough to set lofty environmental goals without
balancing these against economic reality. We expect to interact with the global biofuels marketplace, especially
for the importation of sustainable biofuels. The LCFS program should first be designed to garner
global recognition and parity. Within that common market, California's LCFS should provide in-state Providers,
the refiners, blenders, producers, and importers with a market advantage, not a
Global development of for
"clean" fuel standards, whether bio- or petro-sourced, view the relative acceptability in terms of relative
impact on the environment per unit energy produced, on a life cycle basis. The European Union starts with "do no
harm" mandate for the more fragile, intrinsically high-value components of the landscape, then sets greenhouse
gas reduction minimums. California adopts the general minimal-impact principle, then adds a "carbon metric"
above and beyond the GHG measurements.
This paper is intended to act as
an introductory guide through the myriad rules and references that currently comprise the "live" program
activities and interim standards of the on-going LCFS process. Following the LCFS program guide will be a brief
look at European schemes to reinforce that programmatic biofuel sustainability development is truly global in
LCFS program documents are due
to be submitted by staff to the Air Resources Board (ARB) in December of this year. Between now and then, there
are numerous opportunities for public engagement and stakeholder input. This Report concludes with the proposed
ARB schedule, engagement points of action for stakeholders, and links to the ARB's LCFS points of
Layer upon layer of law,
regulation, policy, research data, public opinion and general conjecture surround the on-going development of
the LCFS; select statements of program are offered that we feel best describe the perspective of the agencies of
purview, and from these, a very few key statements have been extracted upon which the bulk of the program
In an ARB Regulatory Advisory issued in July 2010, the LCFS regulatory
background and purpose are concisely summarized:
"On November 25, 2009,
the ARB adopted the LCFS regulation pursuant to the California Global Warming Solutions Act of 2006. The
regulation became effective on January 12, 2010 and was codified at Title 17, California Code of Regulations,
sections 95480-95490. Additional provisions became effective on April 15, 2010 and were codified in the same
sections. The combined final regulation order can be found at: http://www.arb.ca.gov/regact/2009/lcfs09/lcfscombofinal.pdf.
The LCFS will reduce
greenhouse gas (GHG) emissions by reducing the carbon intensity of transportation fuels used in California by an
average of 10 percent by the year 2020. Carbon intensity is a measure of the GHG emissions associated with the
combination of all of the steps in the “lifecycle” of a transportation fuel. While carbon intensity (CI)
standards are not enforced in 2010 (the first year of the regulation), compliance with the reporting and
recordkeeping requirements is required for all years, including 2010."
Who is being regulated?
Former Governor Schwarzenegger's
January 18, 2007 Executive Order (EO) S-01-07 provides an overarching guideline against
which can we measure all subsequent LCFS Principles and their sub-parts. EO S-01-07, Item 4 provides the core of
the LCFS Program Statement:
"The LCFS shall apply to
all refiners, blenders, producers or importers (“Providers”) of transportation fuels in California, shall be
measured on a full fuels cycle basis, and may be met through market-based methods by which Providers exceeding
the performance required by a LCFS shall receive credits that may be applied to future obligations or traded to
Providers not meeting the LCFS."
EO S-01-07 defines four
categories of Providers: (1) Refiners; (2) Blenders; (3) Producers; and (4) Importers. A Life Cycle Assessment
(LCA) approach cumulatively considers all actions along the supply chain, from initial acquisition, aggregation
and processing of feedstock through conversion of the raw resource into raw product to refining and reforming of
the raw product into a commodity, and including all transport of materials along the way, finishing with the
delivery of the fuel to the end-user. For fossil-sourced petroleum based fuels, this is often called a
"well-to-pump" assessment; for biofuels, harvesting stages supplant petroleum extraction. The ARB has produced
an Excel-based online registration form for voluntary registration of Biofuel Producers that can be found
By December 2010, the ARB was
receiving "external" Method 2A/2B Applications for fuel producer pathways from Providers to be reviewed
by staff and heard by the Board. The Method 2A/2B web page provides a summary table listing twenty-six external
fuel pathways and six internal pathways. Early submissions naturally were from corn ethanol producers, with
sugarcane ethanol and sorghum / mixed feedstock pathways also represented. Green Plains and Archer Daniels
Midland were among the first Application Packages received. One "waste beverage ethanol" application from
Parallel Products and one application from Clean Energy for liquefied natural gas were received in January
ARB staff "internal" fuel
pathway research continues; staff submitted their own findings in Report Packages to the Board in December 2010
for biodiesel from used cooking oil, corn oil and canola.
What is being measured?
EO S-01-07 requires that a
"baseline level" of required performance be established, with carbon intensity and greenhouse assessments made
on a "full fuels cycle" basis. CI metrics were described in the ARB's January 2011 Initial Statement of Reasons
(LCFS-ISR) for the proposed rulemaking:
"… the carbon intensity
of transportation fuels is the currency of the LCFS; lower carbon intensity fuels have lower lifecycle GHG
emissions. Specifically, carbon intensity is a full lifecycle measure of the greenhouse gas emissions associated
with the production, transport, storage, and use of a fuel. To facilitate comparison across fuels, carbon intensity
is expressed in terms of grams of CO2 equivalent per megajoule of fuel energy (g CO2e/MJ). The term “CO2
equivalent” refers to the fact that CO2 is the baseline against which the atmospheric warming potential of all
other greenhouse gases (GHGs) is measured. Providers of transportation fuels (referred to as regulated parties)
must demonstrate that the mix of fuels they supply meets the LCFS carbon intensity standards for each annual
Two "Look-up Tables" have been in effect since 2009, Table 6 for gasoline
and gas substitutes, Table 7 for diesel and diesel substitutes. Significant changes have been recently proposed (but not yet certified) for CI values in the tables
for many of the fuel pathways described. A "Generic CI Value" has also been proposed for ethanol and
biomass-based diesel in July 2011 as Regulatory Advisory 10-04A, for cases where the actual values are not known
and cannot be reasonably determined for a Blender's purchase of biofuel. This will occur where the supply does
not come from a registered biofuel facility or has not been established through
the Method 2A/2B process. The ARB will then "administratively allow"
regulated parties to use a CI value of 94.71 grams CO2 equivalent per megajoule (MJ) of energy; the number is
the baseline value for diesel in the Look-up Table.
The following is an excerpt from
Look-up Table 6 for gasoline and gas substitutes, to provide an example of this critical format. Note
that the final CI goes beyond direct emissions to include a more nebulous and ill-defined "land use or other
Land Use or Other
to California refineries
Midwest average; 80%
Dry Mill; 20% Wet
Midwest Average; 20% California; Dry
The excerpt below is from
Look-up Table 7 (2009) for diesel and diesel substitutes:
ULSD – based on
the average crude oil delivered to
Cooking Oil) to
biodiesel (fatty acid methyl esters
where “cooking” is
Strict measurements of CI and GHG may be the prime directive,
yet impact assessment of "indirect effects" is a far-reaching task, as anyone who has ever dealt with the
California Environmental Quality Act (CEQA) can attest. Consider then that in addition to all other project-related
assessment and permitting that might be required, the LCFS now increases the preeminence of GHG assessment, and
adds an entirely new metric: measurement of CI.
Where do the numbers come from?
It is with establishing this
Baseline that so much effort is currently being expended. The California Global Warming Act of 2006,
through the implementing regulation of the LCFS and the subsequent Regulatory Advisories provided methods for
investigating all aspects of the LCFS. The LCFS is a work-in-progress; only registration is requested at this
time, and emissions data submissions are not yet mandatory. As noted above, regulated parties as prospective
LCFS Fuel Providers have been submitting Application Packages for ARB review and approval in the interim prior
to full implementation, using the Reporting Tool to register organizations and biofuels users. A few of
these pathways were approved in the Board's February 2011 hearings and are now considered "interim" standards.
The CI Table values will be expanded and modified as more registrations are received, as new data are available,
and as the ARB finalizes on-going investigations into more than a dozen specific LCFS issues.
A series of Workgroups were
mandated to carefully consider first metrics and then methods for establishing that baseline level of required
performance. Following the January 2010 approval of the LCFS regulatory action and same-day incorporation
within Title 17 of the California Code of Regulations, the ARB's Resolution 09-31 directed staff to develop a series of LCFS Workgroups
to address stakeholder questions and concerns from the Rulemaking process in a series of Resolution elements
intended to provide guidelines for program implementation. Finding the status of specific topics is aided by
knowing which group is assigned that issue:
· Expert Workgroup (EWG) - Address the indirect land use change (iLUC) of the
· Program Review Advisory Panel - Participate in the reviews of the LCFS program and
provide comments on ARB staff’s assessments of each review area. The Advisory Panel provides the "high-level"
oversight, accumulating detail from the other workgroups and the public to address a series of Topics
specifically called out in the LCFS regulations.
· Reporting Tool Workgroup (LRT) - Development of the Compliance Tools and
Enforcement Protocol for the LCFS (11-2010 Version 2.2 of the Reporting Tool is available
· Sustainability Workgroup (SWG) - Develop sustainability provisions for the LCFS and bring
recommendations back to the Board by December 2011.
· Electricity Workgroup - Created to address issues related to regulated
parties of electricity as a transportation fuel. July 11,2011 Workgroup meeting presentation available
· High Carbon Intensities Crude Oil (HCICO) Screening Workgroup –
Screening process for petroleum sourced raw oils; a Crude Screening Decision Tree is now available
· Lifecycle Analysis Workgroup (LCA) - Lifecycle of Energy Use and
Greenhouse Gases, using a California-modified
GREET pathway model (FAME pathway, for example).
· Policy and Regulatory Workgroup – Rulemaking information and revisions;
proposed 2011 Regulatory Amendments July 22, 2011 workshop materials are available
· Environmental and Economic Workgroup – propose economic and
environmental analyses; 2008 Economic Analysis, for example).
On June 16, 2011, the Advisory
Panel released their Draft Workplan Version 2, a "high-level" outline addressing thirteen
topics assigned by the regulations plus the HCICO issue needed for comparison and a chapter on the growing
Credit Market. The topics cover report progress and compliance schedules, advancements in our understanding of
LCA methods, production technologies, supply and commercialization, revenues and impacts. Barriers are
considered, and the "advisability" of harmonization with the full sweep of local, state, federal and
international programs. A timeline is proposed, culminating with submission of an overall LCFS report to the Air
Resources Board in December 2011. The Panel's current Draft Workplan is open for comment and addressed in more
detail at the end of this Focus Report.
How does this compare globally?
The European Commission (EC) has been engaged in detailed
comparison of both mandatory and voluntary biofuels sustainability programs to determine compatibility with their
core principles guiding advancement of biofuels and reduction in dependence on fossil fuels. On July 19, 2011, the
EC formally recognized seven sustainability certification programs providing sustainability
criteria and certification for production of biofuels.
The EC's recognition of the
seven biofuels sustainability schemes depends upon their meeting a set of minimum key criteria, yet only
three of those criteria are mentioned, and those are only very roughly defined:
· "A set of
land use criteria: It is not allowed to convert land with high carbon stock or land with high
biodiversity value into land used for production of biofuels. In plain words: No forests – whether tropical
forests or natural forests – can be destroyed to grow biofuels. No wet land can be dried or protected areas"
· "A minimum
amount of greenhouse gas savings over the whole production chain: Biofuels need to stand a comparison
with fossil fuels such as petroil: Only if it is proven that they emit at least 35% less greenhouse gases then
petroil, than they are seen as sustainable. In 2017 these savings have to be at least 50%. Biofuels produced
from new installations have to save at least 60% from 2018."
· "The system
needs to monitor the whole production chain from how the crops are grown through the manufacturing
process to the pump."
To receive governmental support
or to count toward renewable energy targets, biofuels used inside the European Union must comply with
sustainability criteria, either through various Member States national systems or through voluntary programs
with the common aim of preventing the conversion of areas of high biodiversity and high carbon stock to the
production of raw materials for biofuels. Further, value chain life cycle greenhouse gas (GHG) emissions need to
be at least 35% lower than comparable use of fossil fuels, a threshold designed to increase over time.
Commission-assessed and approved voluntary programs receive its recognition for five
LCFS Program Timing and Stakeholder Engagement Opportunities
The ARB's Rulemaking Calendar tracks progress toward finalization. Modifications
to the CI Look-up Tables were adopted in an ARB hearing and submitted to the Office of Administrative Law (OAL),
with expected approval early in 2012. Revisions to the LCFS were adopted May 26, 2011; a new set of revisions
should be ready for Board hearing in October 2011.
There currently seems to be
significant confusion between what constitutes a fuel pathway, a fuel production technology, and what
is simply a feedstock starting point that can and often does lead to very different "pathways" or integrated supply
chains and output fuel products. There is no clear demarcation; "pathways" are not adequately described and are
commonly simplified to indicate only the key components, while "technologies" encompass these and other supply
chains. Yet this approach remains more cohesive and holistic in perspective than many other energy-related
programmatic planning efforts, as we have recently discussed in our article, Blueprint for California's Clean Energy Future.
Engagement: Stakeholders are currently registering and submitting
Application Packages for ARB review and possible Board approval; greater participation during these early stages
can only improve the overall program's breadth and accuracy. Each supply chain category from source to product is
considered a "fuel pathway", with inherent characteristics of CI and GHG. The LCFS process is collecting and
defining pathways right now, with around 20 types defined. The LCFS-ISR also provided definitions of
"Fuel pathways describe
the production process and transport of transportation fuels and are used use to determine the appropriate carbon
intensity for a given fuel. New pathways can be added to the LCFS Lookup Table in two ways: fuel providers may
apply to ARB for new pathways under the regulatory “Method 2” process, and staff may develop new pathways
internally. Pathways falling into each of these two categories are proposed under this rulemaking. The Method 2
application process consists of two variants known as Methods 2A and 2B. Method 2A is reserved for applicants whose
proposed pathways consist of modified versions of existing pathways. Method 2B, on the other hand, is reserved for
entirely new fuels or production processes."
As discussed, the LCFS
regulation requires fuel providers to determine the CI of the fuels they provide, and report this information to
the ARB. A New Fuel Pathway guidance document issued in August 2010 describes the
Method 1 process current fuel providers are to use to determine their fuel CI using the interim assigned numbers
from the Look-up Tables, and beyond these "core values", how a Provider may use one of the two Methods to
establish a new pathway.
Engagement: As the Workgroups continue
their assessments and as Providers register and submit Application Packages, the underlying data accumulation
will allow refinement of all aspects of the LCFS. The "First Public Meeting to discuss review progress" in the
Advisory Panel Workplan Version 2 schedule below took place on July 25,
LCFS Advisory Panel Draft
Workplan Version 2 Schedule as of June 16, 2011.
First Advisory Panel Meeting
February 16, 2011
Workplan, status updates on topics 5, 9, and 10
April 26, 2011
Status updates on topics 6, 7, and 12, along with
credit market discussion. Revisit 5, 9, and 10.
and July 1, 2011
First Public Meeting to discuss review
July 25, 2011
Status updates on topics 1, 2, 3, 4, 8, 11, and
August 25 and 26, 2011
Second Public Meeting to discuss review progress
September 29, 2011
Draft Review Report Discussed with Advisory Panel
October 27, 2011
Deadline for Panel/Public Comments on Draft Report
Public Hearing for Board on Report
By December 2011
The staff presentation for the meeting included an outline of the Panel's
many Topics under development for December submission to the Board. Draft outlines for many of the Topics are
provided; in each case, stakeholders could provide additional information. As just one example of a Topic
"Topic 4: Technology Assessment" outlines LCFS transport fuels
technologies that Panel members feel are available today, those that will be commercialized in the near term,
and those that may become available over the next several years. Briefly mentioned in the draft as available now
are ethanol from grains and sugars, biodiesel from crops and waste fats and oils, AD-generated biogas,
reformatted gasoline, natural gas, hydrogen, and electricity as a transport fuel. "Near-term future
technologies" only includes ethanol from lignocellulosic biomass. In the category of "long-term future
technologies", we find no mention of algal biofuels and biobutanol.
Missing from the assessment
entirely are (a) biofuels produced by genetically engineered bacterial and fungal organisms, (b) thermal
conversion of biogenic wastes for production of synthetic fuel gas or syngas, (c) enzymatic, catalytic and/or
microbial conversion of syngas to liquid fuels, (d) thermal conversion of non-biogenic waste materials (i.e.:
non-recyclable plastics, refinery waste secondary materials), (e) microbial direct CO2 / hydro-carbon rich
emissions fixation and fuel synthesis, and (f) any discussion of fully integrated, multi-technologic,
As with the Fuel Pathways,
stakeholder direct comment to the Workplan is needed. In conjunction with the July 25th workshop, the public has
been invited to submit comments on-line to the Advisory Panel Workplan by August 15,
2011 on the Panel's comment web page. Primary points of contact for questions on submission of comments are
noted on the last slide of the workshop presentation. Individual ARB staff contacts
are provided for questions related to Method 2A/2B Pathway issues on that program's
The list serve subscribe / unsubscribe webpage for the LCFS Program
website is administered by the ARB. By signing up for this list serve, you will receive a notice when
information updates have been made to this area of our website. In most instances, the ARB will provide you with
an email explaining the upcoming activity and/or the document(s) added to the site and the appropriate URL so
that, if interested, you can download them at your convenience. Also, the ARB maintains and can provide a
current archive of all email notices broadcast to this list.
Conclusion & Recommendations
California is about half way
through development of a method to judge and compare transport fuels for their relative lifecycle impacts upon
society and the environment. All the LCFS program development elements, as complex as they are, still remain
open for stakeholder discussion, debate, and revision, or simple acceptance for those who choose not to
participate in the process. This paper provides a relatively compact guide to the major program elements and
encourages stakeholder engagement, not because what is being developed is wrong, but because the
implementation of this program will so dramatically affect the future of biofuel technology selection and market
development in California, and indeed globally.
California's place in that
global marketplace needs to be kept in perspective, surely from an economical perspective, but perhaps more
importantly because what this State does will set a global benchmark. Whether the LCFS will
improve biofuel development and petroleum displacement is a matter of conjecture; the implementation
of the LCFS however is certain to have a significant impact globally.
Sustainability does not imply
strict hands-off preservation, no more than sustainable methods should include resource depletion. The LCFS goes
beyond the basic global concepts of sustainability in attempting to define a measurable metric, the
"Carbon Intensity" and to use this measurement tool to answer the broader question. California has not
arbitrarily accepted that "biofuel" or any fuel is inherently "cleaner", better, more sustainable.
Instead, the LCFS is an attempt to develop and implement a standardized mechanism to compare and contrast
all forms of transport fuel. This lofty goal also bears the inherent hazard of so encumbering the
Providers, those stakeholders directly engaged in Refining, Blending, Producing and Importing low-carbon fuels,
that the program defeats its stated purpose. This is why stakeholder involvement in development of the LCFS
program is so important.
This is a delicate balance
between economics and environment, one clearly recognized by the EPA:
definition of sustainability calls for policies and strategies that meet society’s present needs without
compromising the ability of future generations to meet their own needs … Sustainable development reflects not
the trade-off between business and the environment but the synergy between them."
© Teru Talk by JDMT, Inc 2011. All rights reserved. This
article is copyrighted.
You are free to reprint and use this article as long as no
changes are made to its content or references and credit is given to the author, Michael Theroux.