Low Carbon Fuel Standard 101

Here's some information about the Low Carbon Fuel Standard.

One of the first state programs designed to reduce transportation greenhouse gas (GHG) emissions at the source was the California Low Carbon Fuels Standard (LCFS) program. Enacted by the passage of Assembly Bill 32 and signed into law by then Governor Arnold Schwarzenegger, the measure tasked the California Air Resources Board (CARB) with developing rules and regulations to reduce GHG and carbon emissions. The program was rolled out for implementation in 2011. Every five years CARB issues a new scoping plan that guides the agencies actions on reducing emissions and lowering the carbon intensity of fuels.

The program’s main goal is to reduce the carbon intensity (CI) score of the transportation fuel pool. The original program target was set at 10%, and then adjust to 20% by 2030. CARB is developing new rules in 2023 which will likely move targets to 35% reductions by 2030.  This is accomplished by lowering the carbon intensity of all fuels and therefore incentivizing the use low carbon fuels like renewable diesel and biodiesel used in California.

Today California, Washington, Oregon, and British Columbia are part of the Pacific Coast Collaborative which is unified in pursuing low carbon fuel use and decreasing emissions.  When Washington state finalizes its clean fuel standard program rulemaking, The Pacific Coast Collaborative jurisdictions will all have LCFS-like policies in place.

How Does It Work?

The LCFS program uses an annual carbon intensity goal that generates credits and deficits. A credit is earned when the carbon-intensity (CI) score of the fuel used is lower than the annual target established by CARB. When a CI score is higher it generates a deficit. Each credit represents a metric ton of C0₂ equivalent emissions. The monetary value of the credit is based on the credit trading market, which is affected by supply and demand.

Companies must report fuel use and CI scores to be compliant with the program on an annual basis. Renewable fuel producers utilize the CA-GREET 3.0 (California Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) model to account for the life-cycle analysis (LCA) of the fuel. The LCA measures both the direct and indirect carbon emissions associated with the production and use of a certain fuel and is established through an application process.

Chevron Renewable Energy Group has multiple LCFS pathways for its facilities; if you are interested in learning about how these CI Pathways lower the overall CI of fuel sold in California, information  can be found on the CARB Website.

How Are LCFS Credits Generated?

There are multiple ways to earn LCFS credits under the CA LCFS. The credit generation method depends on your fuel type and business activities. Chevron Renewable Energy Group generates credits by importing low CI biofuels into California with a multitude of fuel pathways.

If you are interested in learning more about the LCFS program, visit the CARB Website and check out our LCFS White Paper.

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