California extends low-carbon fuel standard through 2030

Source: Debra Kahn, E&E News reporter • Posted: Tuesday, October 2, 2018

SACRAMENTO, Calif. — California regulators last week extended their emissions trading program for transportation fuels through 2030 and created a new point-of-sale rebate for electric vehicle buyers.

The low-carbon fuel standard (LCFS) was designed to lower emissions from transportation fuel 10 percent below 2010 levels by 2020. The program, in place since 2011, sets an average carbon content for fuels that declines annually, above which companies need to either change the balance of fuels they sell or buy credits to offset high-emitting fuels.

Transportation is the largest single contributor of greenhouse gas emissions in California, constituting around 50 percent of the state total — and emissions from the sector are still going up. Overall, the rule is projected to reduce emissions by 63 million additional metric tons of carbon dioxide through 2030.

The amendments approved Thursday would set a new 2030 target of 20 percent reduction in carbon intensity and would allow a wider range of low-carbon activities to generate credits for the program, including alternative jet fuel, carbon capture and sequestration, and the installation of electric-vehicle and hydrogen fueling stations.

Through 2025, the rules would allow hydrogen and fast-charging electric vehicle stations to receive credit based on their installed capacity, in addition to the fuel they dispense.

The state’s electric utilities would also be required to use their credit proceeds from selling electricity to residential EV drivers to fund a point-of-sale rebate program for electric vehicle buyers. Utilities and EV manufacturers have clashed over such a program in the past.

Starting next year, the state’s large investor-owned utilities will have to devote two-thirds of their LCFS credits to EV rebates; large and medium-sized publicly owned utilities will start at 20 and 35 percent of their credits, depending on their size.

Some environmental groups objected to the added incentives for installing hydrogen stations, arguing that they would overcompensate companies for the cost of installation.

Agency staff said the incentives for increasing fueling capacity were aimed at achieving Gov. Jerry Brown’s (D) executive order issued earlier this year to put 5 million zero-emission vehicles on the road by 2030.

“Our approach is ambitious and is strong,” said Sam Wade, head of the California Air Resources Board’s transportation fuels branch. “It potentially will go beyond what’s necessary” to reach the goal.

Community air monitoring moves forward

CARB also approved an implementation plan for a 2017 law, A.B. 617, that seeks to monitor and eventually reduce conventional air pollution in disadvantaged communities. The measure was key to getting environmental justice-aligned lawmakers on board with A.B 398, last year’s bill to extend the state’s carbon cap-and-trade system through 2030.

CARB announced the initial 10 regions that would receive monitoring or emissions reduction programs in August; they include West Oakland, Richmond, south-central Fresno, East Los Angeles, Wilmington and San Bernardino.

Environmental justice activists have argued that the program, aimed at quantifying the effects of disparate pollution sources like refineries, ports, freeway traffic and agricultural operations, is too vague. Local air districts will be in charge of developing air monitoring and emissions reduction plans over the next year, including a requirement to retrofit industrial facilities with the best available pollution control technologies by 2023.

Groups last week urged the board to include more areas like the Coachella Valley, which is adjacent to the Salton Sea, a giant saline lake in the southeast of the state that’s releasing dust laden with agricultural runoff as it dries up. They also objected to some of the 10 selected areas receiving only air monitoring plans and not emissions reduction plans.

“I don’t need you to monitor me to death, because that’s what’s happening here,” said Vallejo resident LaDonna Williams. “We need reductions first. We don’t need any more monitoring.”

The legislator who sponsored last year’s cap-and-trade bill, Assemblymember Eduardo Garcia (D), acknowledged the differences and defended the program.

“A.B. 617 wasn’t meant to be the ceiling, and it isn’t meant to be the end-all, fix-all,” he said.

Brown also vetoed a bill Thursday by Garcia aimed at giving certain disadvantaged communities a leg up in applying for funding from the state’s cap-and-trade program. A.B. 1945 would have given extra points in the grantmaking process to proposals intended to improve air quality or benefit San Diego or Imperial counties, which experience significant cross-border vehicular traffic from Mexico.

In a signing statement, Brown said the “general goals of this bill have merit but would be better achieved through the budget process.”