California regulators have voted to strengthen the Low Carbon Fuel Standard (LCFS), mandating deeper cuts to greenhouse gas emissions from transportation fuels despite concerns over potential gasoline price increases. The California Air Resources Board (CARB) voted 12 to 2 in favor of the amendments, concluding a prolonged debate that featured testimony from both supporters and opponents of the policy.
The newly approved amendments will require a 30% reduction in carbon intensity of transportation fuels by 2030, an increase from the previous 20% target, and set a 90% reduction goal by 2045. The LCFS policy, in place since 2011, compels fuel producers to reduce carbon emissions or purchase credits from low-carbon fuel and gas producers, thereby encouraging the production of renewable fuels.
Board members argued the stricter LCFS is crucial to maintaining California's climate leadership. Senator Henry Stern, a non-voting board member, underscored the importance of California's role, stating that “the world is watching California to see if we will maintain leadership or fracture under internal pressure for perfectionism.”
The vote underscores California's commitment to emission reduction even as challenges lie ahead. Transportation is California's largest greenhouse gas contributor, representing approximately 50% of state emissions. Supporters, including biofuel developers and climate advocates, believe the changes are necessary to meet state climate targets.
Critics, however, raised economic and environmental concerns. Oil companies and consumer advocates argued that tougher standards could increase gasoline prices, a contentious issue amid already high costs for consumers. CARB's own analysis previously estimated an average 37-cent-per-gallon increase in gasoline prices due to the stricter LCFS requirements from 2024 to 2030, although the board has since clarified that fuel price projections are complex and uncertain.
Environmental groups criticized the amendments, asserting they may continue reliance on oil and gas and emphasize fuels derived from food crops and dairy operations, rather than advancing electric vehicle adoption. The Environmental Justice Advisory Committee also recommended rejecting the revisions, citing the policy's exemptions for jet fuel producers and significant subsidies for dairy methane projects.
The LCFS policy has already boosted California's renewable diesel and biogas markets, driving credit prices from over $200 per credit in 2020 to roughly $70. By increasing the LCFS targets, CARB aims to lift credit prices to stimulate more renewable fuel production and sustain the development of cleaner transportation fuels, a measure broadly welcomed by renewable fuel developers.
Souce: Reuters
