October 7, 2024 

Late Tuesday night, October 1st, CARB released a second modified text for its proposed Low Carbon Fuel Standard (LCFS) amendments. This release opens up a 15-day public comment period ending on October 16th. CARB still intends to present the proposed amendments at a public hearing scheduled on November 8th, thus giving them only a relatively brief time to evaluate and respond to any comments submitted. The modified text and additional documentation are available on CARB’s LCFS 2024 Rulemaking webpage.   

In today’s flash report, we outline the most significant changes from the modified text released on August 12, 2024 (see our review of the August 12th proposed text and our discussion of comments received). 

Summary of Changes in October 1st Modified Text 

1. The implementation of the Automatic Acceleration Mechanism (AAM) is significantly refined. Instead of being evaluated annually, it will be evaluated quarterly (two weeks after publication of each quarter’s data) based on the most recent four quarters of data. Instead of the AAM’s triggering frequency being limited to alternate years, it is now limited to once every four quarters (i.e., it could be triggered in consecutive years). If triggered, the benchmark schedule will be updated the following January 1st. 
2. The 20% cap on biomass-based diesel (BBD) sourced from soybean oil and canola oil has been broadened to include sunflower oil. The grandfathering to 2028 for existing producers has been clarified and extended to encompass all companies with either approved or submitted BBD pathways as of the effective date of these amendments. 
3. Provisions concerning the potential awarding of non-metered residential charging credits to electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) original equipment manufacturers (OEMs), the requirements for covered OEMs, and the corresponding impact on electric distribution utilities (EDUs) and the CFR program have been clarified. Additionally, the proposed 7% cap on costs for administration of required electrification investments by EDUs has been increased to 10% in response to comments received (the corresponding cap for OEMs is set at 7%). 
4. Language on the use of book-and-claim for low-CI electricity for direct air capture and hydrogen production was clarified. 
5. Eligibility for renewable natural gas (RNG) and biomethane to use book-and-claim accounting was extended to encompass use for production of electricity using a fuel cell for EV charging applications in addition to use as transportation fuel or production of hydrogen for transportation purposes. 
6. The proposed requirement to limit book-and-claim for RNG to that injected into pipelines flowing into California was modified so that it is now linked to the population of Class 3-8 ZEVs registered in California by the end of 2029. 
7. The proposal to limit avoided methane crediting for dairy and swine RNG to two ten-year periods was modified so that pathways certified before the effective dates of these amendments have their three potential ten-year periods grandfathered; pathways certified after the effective date but before January 1, 2030 will still be limited to two ten-year periods. If such facilities subsequently become subject to mandatory methane reduction requirements, they will no longer be eligible for ten-year crediting periods beyond their currently approved one. 
8. The Clean Fuel Reward (CFR) program, which provides an incentive for the purchase of certain medium- and heavy-duty zero emission vehicles (ZEVs) has been amended to cover used as well as new commercial vehicles. 
9. The classification of electric utilities into Large, Medium, and Small has been updated with new thresholds based on 2022 annual loads. 
10. Requirements for public availability of heavy-duty fast charging and heavy-duty hydrogen refueling installations seeking infrastructure credits have been revised in response to multiple comments received on the August 16th text. 
11. Requirements for hydrogen dispensed for vehicle fuel to be 100% renewable have been pushed back from 2031 to 2035 with a new 80% renewable content requirement starting in 2030. 
12. The language concerning potential geographic land use change (LUC) factors was modified to cover non-crop as well as crop-based feedstocks. 
13. Corn stover was added to the list of waste feedstocks. 
14. Additional details were added to the proposed feedstock sustainability requirements.  
15. The Temporary Pathway Carbon Intensity (CI) table received several edits including hydrogen produced from dairy and swine RNG and low-CI electricity produced via a fuel cell with dairy and swine RNG. 

Changes not made 

A number of provisions drawing extensive comments were not changed in this revised proposal. These include: 

1. The proposed CI reduction schedule. 
2. The end to certifying new BBD pathways starting in 2031 subject to the number of Class 3-8 ZEV registrations. 
3. The imposition of sustainability criteria which had not been reviewed in workshops. 
4. The elimination of the initially proposed deficit generation for intrastate jet fuel. 
5. The continued availability of avoided methane credits (the phase-out provisions have been revised. 
6. The first date for evaluating the AAM. 

In summary, the proposed revisions to the proposed LCFS amendment text are extensive, but edits in this current version are largely technical and editorial, thus leaving a number of areas of contention unchanged.  

For additional assistance around how the proposed changes may impact your business, contact us.