On November 8th, the California Air Resources Board (CARB) held a 12-hour public hearing to consider and vote on a resolution concerning amendments to the Low Carbon Fuel Standard (LCFS). The hearing is the culmination of a three-year amendment development process which included ten public workshops, two multi-lingual community workshops in the evening hours, three board hearings, over 1,000 comments received and considered, and supplemental modeling information posted publicly. CARB staff analyzed and incorporated modifications to the rulemaking proposal including a near term step-down in carbon intensity (CI) benchmark of 9%, refinements to feedstock sustainability provisions, zero-emission vehicle infrastructure eligibility provisions, provisions that would increase support for zero-emission vehicle fueling, and other provisions.

In Chair Liane M. Randolph’s introductory remarks, she stated that “We cannot afford to continue with the status quo” because “the climate crisis is accelerating.” As such, she urged the CARB Board to “to chart a path away from fossil fuels.” Following Chair Randolph’s opening remarks, CARB Staff walked through a Presentation. A few highlights from the presentation:

• Staff covered the successes of the LCFS so far indicating that the program has outperformed targets and achieved the 2026 target three years early. According to Staff, this presents an opportunity to strengthen the program in line with the 2022 Scoping Plan.
• To address concerns about the costs of the program, which have been hotly debated in the public square in recent weeks, Staff provided the two figures below, arguing that the LCFS is not a gasoline price driver and that the program is transparent in the release of data as well as fuel price impacts. The first figure is misleading as it only portrays the LCFS credit value, not the cost in gasoline price as the standard gets more stringent each year. Also, Staff neglected to comment on the out-of-state revenue flow. Additionally, the thrust of these amendments is to increase the stringency of the program, thus raising the LCFS credit price and the deficits generated which will translate into an increase in gasoline price.
• Staff then covered the key rulemaking concepts, which we covered following the publication of the second modified amendment text here. These amendments include:
  • Increasingly stringent carbon intensity (CI) reduction schedule including a 9% step-down in CI reduction in 2025, an increase in 2040 stringency from 20% to 30%, and extending to a 90% reduction by 2045.
  • An end to certifying new biomass-based diesel (BBD) pathways starting in 2031 subject to the number of Class 3-8 ZEV registrations.
  • For non-waste-based feedstocks, sustainability requirements will be imposed.
  • Implementation of an Automatic Acceleration Mechanism (AAM) with quarterly triggers and implementation.
  • A 20% cap by company on biomass-based diesel (BBD) sourced from soybean oil and canola oil has been broadened to include sunflower oil.
  • Limit on book-and-claim for RNG to that injected into pipelines flowing into California and linked to the population of Class 3-8 ZEVs registered in California by the end of 2029.
  • Avoided methane crediting for dairy and swine RNG limited to two ten-year periods; pathways certified before the effective dates of these amendments will be grandfathered to allow for three potential ten-year periods.
  • Provisions for the potential awarding of non-metered residential charging credits to electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) original equipment manufacturers (OEMs).
  • Ability to use book-and-claim for low-CI electricity for direct air capture and hydrogen production.
  • Eligibility for renewable natural gas (RNG) and biomethane to use book-and-claim accounting 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.

Public Commenters:

Following the Staff Presentation, over the course of nearly seven hours, more than 115 individuals provided public comments in person and nearly 50 individuals offered comments remotely via Zoom both in favor of the amendments and against. Interestingly, two previous CARB management staffers offered differing recommendations – Sam Wade urged a “yes” vote while James Duffy urged a “no” vote.

Board Comments:

Following the Public Comment period, Board Members spent four hours discussing public feedback and debating the merits of the proposed resolution.

Specific discussions were held around zero-emission transition, the crop-based feedstock limits, program impacts on fuel prices, and avoided methane crediting provisions for dairies. One movement was made by Board Member Takvorian who requested a 15-Day change removing the portion of the clause in subsection 95488.9(f)(3)(B) that reads “pathways associated with projects that break ground after 2035.” The motion was seconded by Board Member Florez. After much debate and discussion, the motion was taken to a vote and did not pass.

Finally, the board voted on the resolution at hand, and it passed by a vote of 12-2. Now that the amendments have been approved by the Board, they are expected to be in effect in early 2025.

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