Following stakeholder feedback on the proposed amendments to the structure of the LCFS, ARB has decided to drop the largely unpopular “Credit Bin” requirement. The Credit Bins consisted of carbon intensity (CI) ranges, where a pathway would get the mid-point of the Credit Bin it falls into. Producers could move from one Bin to another by completing a registration process similar to the current process. However, Credit Bin sizes of up to 10 gCO2e/MJ favor producers close to the Bin borders.

1741c813-4413-833f-afbf319153bcSince every CI point matters under the LCFS credit scheme, disregarding actual emissions was opposed by Life Cycle Associates and other industry experts, as highlighted in our comments to ARB:

Credit Bins … are not an incentive for investment and are unfair. Innovations may not be rewarded…”

We are pleased to see that ARB has taken comments, provided by us and other experts, into account and has decided to drop this proposal.

ARB is maintaining the proposal for a two-tiered system under which conventionally produced first-generation biofuels would fall into the first tier and next-generation biofuels would fall into the second. Notably, any fuel produced using an innovative method, even first generation fuels, would fall into the second tier.

ARB continues to propose a substantiality requirement which is proportional to the baseline CI of the fuel.

For questions or more information, please contact us.

Date: July 3, 2014