On August 12th 2024, the California Air Resources Board (CARB) issued the much anticipated updated text for the Low Carbon Fuel Standard (LCFS) amendments. We previously published Flash Reports on CARB’s initial salvo of proposed LCFS Amendments (Sept. 2023) and key takeaways from CARB’s April 2024 LCFS Amendments Workshop. Today we highlight our initial key takeaways from the 15-Day Notice and proposed modifications to the amendments. The posting of the Notice and amended documents starts the clock on the 15-day public comment period as established in the Administrative Procedure Act (APA). The deadline for public comments is August 27^th.

The main updates to the proposed amendments include:

1. A 9% step-down in carbon intensity (CI) reduction in 2025; in their April workshop, CARB staff presented preliminary analyses of both 7% and 9% step-down options.
2. Elimination of intrastate fossil jet fuel from consideration for deficit generation. Previously, CARB had proposed that intrastate jet (about 10% of total jet fueled in California) be included as a deficit-generating fuel.
3. Biomass-based diesel (BBD) from soybean oil and canola oil is limited to 20% per company. For companies already registered under the LCFS and reporting greater than 20% BBD from soybean oil or canola oil in 2023, the effective date of this provision is 2028. This cap is to be enforced on the producers (i.e., any production greater than 20% is to be assigned a CI equal to the greater of the annual diesel benchmark or the pathway CI.) Effectively, that means volumes above the 20% limit would generate neither credits nor deficits. Those same gallons will still qualify for federal Renewable Fuel Standard credits (known as renewable identification numbers (RINs) and any other applicable federal incentives).
4. No new BBD pathways will be granted after January 1, 2031 if California has met CARB’s goal of at least 132,000 Class 3-8 (i.e., heavy-duty) zero- or near-zero emission vehicles by December 31, 2029.
5. Addition of a provision allowing up to 45% of base credits from residential electric vehicle (EV) charging to be credited to original equipment manufacturers (OEMs). Currently the base credits from residential EV charging are credited to the electricity distribution utility (EDU). Under the modified LCFS amendment proposal, OEMs will be required to invest the proceeds from these credits in electrification projects such as additional rebates and incentives for purchasing or leasing new or previously owned EVs; installing EV charging infrastructure and subsidized EV charging plans; and multilingual marketing, education and outreach.
6. Elimination of new awards of infrastructure credits for light-duty (LD) hydrogen refueling infrastructure (HRI) and fast charging infrastructure (FCI). Proposed awarding of infrastructure crediting for medium- and heavy-duty (MHD) infrastructure remain.
7. Elimination of the 1.0 Energy Economy Ratio (EER) for pre-2011 fixed guideway systems, which results in granting additional credits for fixed guideway systems which were in place before the LCFS was implemented. Going forward, all fixed guideway systems will have an EER of 3.1-4.6 in line with those currently assigned to post-2011 systems.
8. Elimination of credits for fossil-derived hydrogen (even that produced with carbon capture and sequestration) used in fuel cell vehicles (FCVs) after 2030.
9. Modification to forklift credit calculations, eliminating the 1.0 EER for electric forklifts in operation pre-2011 (before the LCFS was implemented) and setting a 2.4 EER for all forklifts <12,000 pounds. Additionally, beginning in 2026, reported forklift electricity volume must be measured; the CARB-approved methodology previously used to estimate volumes will no longer be an option.
10. Sustainability requirements will apply to biofuels beginning in 2026, including chain-of-custody attestation. Sustainability requirements will also apply to all new pathway applications.
11. The indirect land-use change (ILUC) table values are now specific to a region. For new fuels, a different ILUC may be assigned.
12. A small change impacting quarterly fuel transaction reporting timeliness: For each business day of delay after the reporting deadline, CARB is proposing a late-submission penalty of 25% of the total credit issuance that would have occurred with a timely submission. However, the penalty may not exceed 75%.

CARB will host a hearing on the proposal November 8^th, as previously scheduled, preserving currently targeted implementation in early 2025.