Transcript GHG Reporting and Baseline Workshop 12/2006

The Low Carbon Fuel
Standard
Dan Skopec
Climate & Energy Consulting
October 5, 2007
UC Berkeley
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Transportation is a Major Source
of Greenhouse Gas Emissions
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World’s First Greenhouse
Gas Fuel Standard
• In January 2007, Gov. Schwarzenegger established
the LCFS by Executive Order.
• The LCFS is a statewide goal to reduce the carbon
intensity of California’s transportation fuels by at
least 10 percent by 2020.
• Goal will be accomplished by establishing a Low
Carbon Fuel Standard (“LCFS”) for
transportation fuels sold in California.
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Principles of the LCFS
• Requires fuel providers to decrease carbon
intensity of average annual fuel sales
• Intensity Standard – gCO2e/mj
• Standard measured on a lifecycle analysis
• Flexible compliance -allows averaging, banking
and trading
• Fuel Neutral – no mandates. Fuel providers will
choose which fuels to sell and in what volumes
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Rationale for the LCFS
• A statewide cap-and-trade system alone unlikely to
create a large enough price signal to induce
sufficient, timely investments in new fuel and
vehicle technologies
• LCFS creates a substantial, certain market for low
carbon fuels and a stable investment environment
• Benefits versus Renewable Fuel Standard
•
More flexible since it includes electricity, hydrogen,
natural gas, etc, rather than just biofuels
• Ensures greenhouse gas reductions
• Penalizes the use of high carbon, fossil fuels (coal to
liquids, tar sands)
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Benefits of LCFS
• Less Gasoline Consumption: Displace
20% of gasoline consumption
• Larger renewable fuels market: Expand
California’s alternative fuels markets by 3 to
5 times, while reducing GHG emissions
• More alternative fuel and hybrid
vehicles: 7 million advanced technology
vehicles, more than 20 times current level
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Alternative Fuels are
Not Created Equal
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Note: This illustration does not
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Gasoline (Shale)
Gasoline (Tar Sands)
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Gasoline
Ethanol (Corn Coal)
Ethanol (Today)
Ethanol (Corn NG)
Biodiesel
Ethanol (Corn Biomass)
Ethanol (Cellulose)
Ethanol (Corn Biomass CCD)
Ethanol (Cellulose CCD)
“Well to Wheels” Analysis –
Ethanol Example
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Process
• ARB established LCFS as an early action item
• UC Team published two part analysis on technical
feasibility and policy issues
• ARB begins regulatory process
• ARB workgroups established
- Lifecycle analysis
- Compliance & enforcement
- Policy & regulatory developments
- Environmental & economic
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Timeline
• 2007-08 – ARB holds workshops
• Early 2008 – Draft regulatory language
• Fall 2008 – Staff complete reg. package
• End of 2008 – Reg. package to Board
• 2010 – Implementation begins
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Policy Issues
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Sustainability/Land use
LCA modeling: accuracy; better data
Default values & opt-in
Upstream oil production
Interaction w/ larger cap and trade
Harmonization w/ US EPA and EU
Harmonization w/ vehicle policies
(Pavley)
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Congressional Action
• Senate bill is RFS on Steriods
• From 7.5 billion gallons/year mandate
to 36 billion gallons by 2022
• Carve out for advanced biofuels
• Massive subsidies for production and
distribution infrastructure
• A one-sided policy that doesn’t
address global warming and will have
other adverse impacts
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