California should let market, not mandate, cut emissions

Source: By Geoff Cooper, RFA • Posted: Tuesday, October 6, 2020

California Gov. Gavin Newsom (D) sent shock waves through energy and climate policy circles recently when he ordered that all new passenger cars and trucks sold in the state must be “zero-emission” by 2035.

Of course, in California regulatory lingo, the term “zero-emission vehicle” (or “ZEV”) is shorthand for an electric or fuel cell vehicle. Thus, starting 15 years from now, Gov. Newsom’s order would essentially ban the sale of cars and trucks that use liquid fuels in internal combustion engines and mandate the sale of battery electric, plug-in hybrid and fuel cell vehicles.

There’s no question that the executive order is as bold as it is fashionable. But is it realistic? And is it truly necessary?

Indeed, the goal behind the ZEV mandate — combating climate change —is laudable and absolutely should be pursued with urgency. As producers of renewable liquid fuels, confronting climate change and reducing carbon emissions is our goal too.

In California, the transportation sector accounts for more than 50 percent of the state’s greenhouse gas emissions. And nationwide, transportation is the single largest source of greenhouse gas (GHG) emissions. We can — and must — do more to reduce carbon pollution, and we need to act quickly.

But let’s get a few things straight.

First, there is no such thing as a zero-emission vehicle. Calling an electric vehicle a ZEV is like calling a donkey a unicorn — it sounds nice, but it simply isn’t real. Just because there aren’t any greenhouse gas emissions coming out the tailpipe of an electric vehicle doesn’t mean the vehicle and its fuel are emissions-free. The electricity that powers the vehicle had to come from somewhere. And, if it comes from fossil fuels, the true carbon impacts of a “ZEV” can be as bad or worse than the impacts of a vehicle running on straight gasoline.

It’s true that California gets a significant share (about 30 percent) of its electricity from clean, renewable sources like biomass, wind, solar and hydro. It’s also true that an electric vehicle running on these sources of electricity offers a far smaller carbon footprint than a vehicle running on gasoline. But roughly one-third of the electricity produced in California is generated by natural gas-fired plants. Another one-third of the state’s electricity comes in from other states and, yes, some of those places still use coal in their power plants. Nationwide, fossil fuels like coal and natural gas still generate 63 percent of our electricity, with 20 percent coming from nuclear and 18 percent from renewables.

Second, California has had a law in place since 2006 that is already driving significant reductions in transportation-related GHG emissions. Under that law, the California Low Carbon Fuel Standard (or “LCFS”) has reduced GHG emissions from cars and trucks by 66 million metric tons implementation began in 2011. That emissions savings is equivalent to taking 14.3 million cars off the road for an entire year or shutting down 17 coal-fired power plants.

And the beauty of the LCFS is that it is fuel- and technology-neutral. It takes a market-based approach and does not dictate what fuels and vehicles must be used to reduce emissions. Rather, the LCFS establishes increasingly stringent annual requirements for decreasing the carbon intensity of transportation fuels used in the state. How fuel producers and suppliers meet those annual standards is entirely up to them, meaning the lowest-cost options for reducing carbon emissions will typically win out. That competition means consumers continue to have choices when it comes to vehicles and fuels.

Renewable liquid fuels like ethanol, renewable diesel and biodiesel have cut GHG emissions by 51 million metric tons under the LCFS, accounting for 78 percent of total carbon reduction achieved since 2011 (over the same period, the use of ZEVs has reduced GHG emissions by 8 million metric tons, or 12 percent of the total). And as the efficiency of feedstock production and conversion processes continues to improve, ethanol will deliver even larger GHG reductions moving forward. According to the California Air Resources Board, some ethanol used in the state is already reducing carbon pollution by 70 percent or more compared to gasoline.

Finally, California does not need to wait 15 years to pursue its deep decarbonization goals more aggressively. Today, battery electric, plug-in hybrid and fuel cell vehicles combined account for less than 2 percent of the California light-duty vehicle fleet. But using more low-carbon ethanol, which is available in huge volumes today, would help Gov. Newsom and California drivers begin accomplishing their objectives immediately. Indeed, a flexible fuel vehicle (or “FFV”) running on E85 (a blend of 85 percent ethanol and 15 gasoline) already easily meets the 2030 carbon intensity reduction requirements under the LCFS. That’s why California E85 sales have grown more than 700 percent since 2011 when the LCFS began. And while there are already 1.1 million FFVs on California roadways (that’s double the number of existing ZEVs), there is room for many more, including E85 hybrids that combine the best of two low-carbon vehicle technologies.

It is beyond dispute that battery electric, plug-in hybrid and fuel cell vehicles running on low-carbon electricity will play an important role in reducing transportation-related GHG emissions in California and worldwide. But renewable fuels like ethanol are already making huge contributions to the achievement of decarbonization goals in the Golden State and elsewhere, and emerging climate policies should ensure that cleaner, greener liquid fuels are afforded the same opportunities as “ZEVs” to continue delivering significant carbon pollution reductions well into the future.

Serious problems require serious solutions, not political gimmicks. Rather than banning internal combustion engines and forcing electric vehicles, Gov. Newsom should double down on the state’s successful technology-neutral LCFS approach and let the market determine the most efficient and lowest-cost methods for slashing carbon pollution.

Geoff Cooper is president and CEO of the Renewable Fuels Association, which represents America’s ethanol industry and drives expanded demand for American-made renewable fuels and bioproducts worldwide.