California Sets First Low Carbon Fuel Standard in U.S.

California Sets First Low Carbon Fuel Standard in U.S.

The carbon content of transportation fuels sold in California must be reduced 10 percent by 2020 under rules set by state regulators that also call for counting emissions generated by the business of producing and delivering fuel of all types to consumers in the Golden State.

The tough new mandate adopted by the California Air Resources Board on Thursday is a cornerstone of the state's broader effort to reduce greenhouse gas emissions 25 percent by 2020. It is intended to diversify fuels used in transportation by replacing 20 percent of the fuel used by cars in California with clean alternative fuels by 2020, as well as boost the market for alternative-fuel vehicles. The standard set by the board is also expected to serve as a model for federal policy.

"California's first-in-the-world Low Carbon Fuel Standard will not only reduce global warming pollution -- it will reward innovation, expand consumer choice and encourage the private investment we need to transform our energy infrastructure," Governor Arnold Schwarzenegger said in a statement.

"Embraced already by 16 states and with support from President Obama and members of Congress for a national standard, we are on the path toward energy security and a low carbon future," said Schwarzenegger, who lay the foundation for the regulation in 2007 when he signed an executive order requiring that a low carbon fuel standard be established.

Under the new rules, fuel consumed in 2010 will be measured to set the baseline for the 10 percent carbon content reduction that is to occur by 2020. The reduction is to be phased in starting in 2011 and is to increase over the intervening years until the target date is reached. In order to meet the goal, fuel producers may blend or sell lower carbon fuels in their own petroleum mix, purchase credits from clean-energy producers, or use banked credits.

The air board approved the measure on a 9-1 vote over objections by representatives of the ethanol industry, who say claims about the environmental effects of corn-based ethanol are exaggerated. They also criticize regulators' decision to tie land-use changes abroad to the production of biofuels in the U.S. in the assessment of emissions generated by fuel production.

The regulation requirement to account for all greenhouse gas emissions associated with the fuel sold in the state would include those from the time oil is drilled, or the grain or feedstock used to make it is planted, to the transportation of that fuel to a filling station -- regardless of where the first step occurs.

Criticism also came from the Western States Petroleum Association, although representatives for BP PLC and Chevron Corporation said their companies supported the new standards provided that regulators periodically review the standards.

Before the vote, WSPA COO Catherine Reheis-Boyd urged that regulators conduct a three-year review to see if their expectations for the development of new fuels are met by the market. In a video posted on the group's site, the association challenged the proposal saying it will take time for the petroleum industry to get up to speed to comply because no commercially available fuel meets the standard.

"It's going to be a big challenge for our industry to transform our fuels to reach these levels," Reheis-Boyd said in the video. She echoed her comment after the standard was adopted, according to the Associated Press, which her quoted her saying, "It's frankly unclear to us how we will comply with this regulation."

Environmental groups cheered the new standard and said the mandate for cleaner fuels is intended to stop heel-dragging by the oil industry -- and to spur it and fuel innovators to action.

"California's adoption of the Low Carbon Fuel Standard marks the beginning of the end for dirty fuels and the dawning of cleaner fuels for America," Roland Hwang, the director for the Natural Resources Defense Council's transportation program, said in a statement. "The handwriting is on the wall: Big Oil needs to stop investing in dirty, high carbon fuels and move to produce more advanced biofuels and other low carbon fuels."

ARB Chairwoman Mary D. Nichols said, "The new standard means we can begin to break our century-old dependence on petroleum and provide California with greater energy security.

"The drive to force the market toward greater use of alternative fuels will be a boon to the state's economy and public health."

Image by walker_M on Aug 7, 2006.