FLASH REPORT: CARB LCFS Amendments Workshop – “Toothbrushes and Beer” 

Apr 17, 2024

On April 10, 2024 the California Air Resources Board (CARB) held an all-day (9:00am to 4:00pm) public workshop to update stakeholders on the path forward for the proposed LCFS program amendments and receive public comments. The workshop was well attended both in-person and virtually with more than 700 attendees on the Zoom call at one point and a full house in Sacramento. The prominent role of the medium- and heavy-duty trucking provisions is reflected in the workshop attendees’ repeated references to “Toothbrushes and Beer” as a symbol of the range of goods delivered by trucks operating in California. In case you weren’t able to attend the workshop in person or via Zoom, we’ve summarized the highlights!

According to EJAC: LCFS does not sufficiently support ZEV transition
The agenda for the workshop included a presentation by the Environmental Justice Advisory Committee (EJAC) and a lengthy presentation by CARB staff followed by public comments. The EJAC presentation and a significant portion of CARB’s staff presentation were largely repeats of the March meeting between EJAC and CARB’s Board.

In summary, EJAC’s position is that the role of the LCFS is to promote electrification by providing revenues to the utilities to invest in infrastructure and subsidize EV sales. They believe that CARB’s management of the LCFS does not meet this objective, and they will pursue legislative fixes and, potentially, court action to correct that. Additionally, they do not believe that the CA-GREET model does a complete lifecycle analysis for biofuels and asked CARB to place a cap on lipid-based biofuels at 2020 levels. Finally, EJAC seeks to eliminate:

  1. all avoided methane crediting,
  2. crediting for RNG produced by dairy and livestock digesters, and
  3. credits for CCS used for enhanced oil recovery or with direct air capture (DAC)

According to CARB: LCFS is fuel-neutral and successful in decarbonizing transport
CARB’s response to the EJAC presentation focused on the dollar value of credits already issued to support electrification and which they project to grow substantially as the vehicle fleet electrifies in response to all the CARB regulations directed for fleet conversion. They further emphasized how the LCFS uniquely addresses GHG emissions from the large number of internal combustion engine (ICE) vehicles which will be on the road in California through 2045 even with all of CARB’s programs to promote the transition to zero-emission vehicles (ZEVs). Their modeling of EJAC’s proposal versus the proposed amendments shows that the EJAC proposal would result in a substantial increase in the use of petroleum diesel compared to CARB’s proposal while doing nothing to accelerate the ZEV transition. Additionally, CARB estimated the tailpipe emission benefits of CARB’s proposed amendments compared to EJAC’s proposal, primarily with respect to air quality benefits attributable to the increased use of biodiesel (BD) and renewable diesel (RD) in both on-road and off-road engines with CARB’s proposal. Lastly, they indicated an anticipated timeline where proposed amendments would be finalized in late 2024 or early 2025 (i.e., a further delay has been necessitated by the depth of issues raised in the 45-day comment period following CARB’s release of the proposed amendments).

CARB on Amendments: Considering a larger immediate CI-reduction step change
CARB’s presentation also summarized the comments received on the proposed amendments (we previously reported our summary of these comments). They defended their proposed “guardrails” on crop-based biofuels but chose not to discuss the proposed RNG and avoided methane crediting provisions. In response to one of the commentors at the workshop, CARB indicated that the 2028 start date for the intrastate jet requirements was driven by their assessment of when adequate volumes of sustainable aviation fuel (SAF) would be available to offset the associated fossil jet deficits.

Importantly, the CARB presentation outlined Staff’s modeling updates and additional scenarios they have modeled in response to comments received. This includes:

  1. A more optimistic assessment of the availability of RD,
  2. Refined modeling of BD and RD emissions (including the same updates CARB Staff previously applied to methane and N2O emissions from ULSD),
  3. A new analysis of the proposed 5% step-down in 2025 along with 7% and 9% step-downs, and
  4. More analysis of the automatic acceleration mechanism (AAM). (Note: Staff disclosed that their model does not automatically execute the AAM; they had to manually trigger it for this presentation.)

Overall, CARB’s presentation suggests that revised amendments may include a larger step reduction in 2025. The overall changes are significant enough to require a supplemental 15-day public comment period after the proposed updates are published. As CARB will be accepting comments on today’s presentation for the next 30 days, we are unlikely to see the revised amendments circulated for the formal 15-day public comment period prior to late-May or early-June.

Stakeholders offer “mixed bag” feedback
As has been the case in previous rulemaking workshops, stakeholder comments indicate that CARB has not fully satisfied anyone. Numerous airport employees flew in to comment on the impacts of fossil fuels on their health and urged CARB to take action to decarbonize air travel. Proponents of ZEV fueling and charging infrastructure urged CARB not to limit capacity-based crediting. Airline representatives indicated that they are eager to replace fossil fuel with SAF but haven’t been able to procure the fuel in meaningful volumes to-date. Fans of the LCFS urged CARB not to delay the application of any AAM adjustment or step-change in CI reduction but instead act expeditiously. Environmental Justice advocates working with community members impacted by dairy digesters indicated that their constituencies boycotted this workshop because CARB excluded discussion of the avoided methane crediting topic altogether, leading these stakeholders to believe that CARB is ignoring the extensive feedback from the Central Valley communities. In the end, everyone agreed that Californians want their beer and toothbrushes to be delivered, but there is strong and broadly distributed disagreement about the cleanest, greenest, most economical, and most environmentally and socially just way to do so.

Learn more about Stillwater’s Credit Price Outlooks