Life Cycle Associates attended two public workshops by the California Air Resources Board (ARB) concerning the state’s Low Carbon Fuel Standard (LCFS) and indirect land use change (ILUC) of biofuels on March 11, 2014 in Sacramento. The workshops discussed general updates to the LCFS regulations and ILUC values.
Updates to LCFS regulations
ARB is planning to overhaul the LCFS and the process of compliance, and anticipates that the rulemaking process will be concluded in 2015. Importantly, all fuel producers will be required to re-register under the new LCFS structure. ARB also proposes a new model for calculating lifecycle carbon intensity (CI) values, based on one of the current versions of the Greenhouse gas, Regulated Emissions and Energy use in Transportation (GREET) model from Argonne National laboratory, which will replace the CA_GREET model. Potential amendments to the LCFS are outlined in ARB’s LCFS Re-Adoption Concept Paper. The main concepts are as following:
- GHG reduction credits for refineries: ARB is proposing to allow refineries to generate credits for investments at the oil refinery that reduce greenhouse gas (GHG) emissions. Rather than reduce the CI of the fuel produced, the resulting credits would recognize GHG reductions at the refineries. The credits would be eligible for sale to other regulated parties.
- CI-Targets: While ARB is not currently proposing to change the average CI target of 10 % by 2020, it does believe that some post-2015 curve smoothing will be needed. ARB indicated it will consider revising the post-2020 targets that call for CI reductions greater than 10 %, but has not given further information.
- Refinery-specific accounting option for low-complexity/low-energy-use refineries: ARB is proposing to allow low-complexity/low-energy-use refineries a one time, irreversible opportunity to opt for refinery-specific accounting. According to ARB, participating refineries would have an incremental deficit assessed if their refinery annual crude CI exceeds their refinery 2010 baseline crude carbon intensity. They would also be required to work with ARB to properly characterize crudes supplied to the refinery, provide descriptions, sources, and volumes of intermediate feedstocks and petroleum-based blendstocks supplied to the refinery, and provide sources and volumes of finished products supplied by outside refineries.
- Two-tiered system for fuel pathways and producer facility registration: Under fuel pathways and producer facility registration, ARB is proposing 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.
The workshop explained that producers of first-tier fuels would be registered into CI bins using an application process similar to the existing Method 2 process. The bins would consist of simple CI ranges, and producers could move from one bin to another by completing the same registration process fuel producers use to obtain a fuel’s first-time tier-one CI value. Producers of second-tier fuels would apply for fuel pathways using a modified version of the existing Method 2 process. ARB staff could also develop and post new tier-two pathways for the use of qualifying fuel providers.
The CI bin option was not viewed favorably by industry because every CI point matters under the current LCFS credit scheme. Since a pathway would get the mid point of the bin it falls into, some producers will gain and others will lose out.
ARB also indicated that they would require increased documentation and third party validation of Plant energy use and may even consider field specific parameters.
Updates to ILUC values
Preliminary results included in the ILUC workshop presentation show that the CI value for corn ethanol could be reduced from 30 grams per megajoule (g/MJ) in 2009 to 23.3 g/MJ in 2014. The CI value for sugarcane ethanol would be reduced from 46 g/MJ to 26.5 g/MJ. For soy biodiesel, the CI would drop from 62 g/MJ to 30.2 g/MJ. Preliminary 2014 estimates for canola biodiesel are 41.6 G/MJ, while the sorghum ethanol estimate is 17.5 g/MJ.
However, these preliminary ILUC values were contested by academics present at the workshop. ARB was keen to point out that these were preliminary results and they will take all comments under advisement during the next revision.
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Date: March 13, 2014