Popping the Hood on California’s Low Carbon Fuel Standard: A Digest Special Series

January 06, 2011

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by Brooke Coleman (NewFuelsAlliance/Biofuels Digest)   ...(W)hat’s good and what needs to be fixed in the LCFS? Where should the biofuels industry be happy, be hopeful, or be hopping mad? Brooke Coleman of the New Fuels Alliance – who knows this better than anyone – has been looking critically at the LCFS, to find out what’s gone right, and what’s gone wrong. The result, an amazing four-part series that we are mighty glad to publish.---Jim Lane
Proponents of the Low Carbon Fuel Standard (LCFS) say that the LCFS is the best way to reduce carbon emissions and promote alternative fuels in the transportation sector. Critics claim that the carbon accounting metrics employed by the California Air Resources Board (CARB) are inconsistent, putting the LCFS at odds with its promise to not pick winners and losers. This 4-part series – Popping the Hood on the California LCFS – will take a closer look at the LCFS debate.
Part I: Status Update
LCFS Status Update California Governor Schwarzenegger created the California Low Carbon Fuel Standard (LCFS) by Executive Order on January 18, 2007. Touted as the world’s first greenhouse gas (GHG) standard for transportation fuels, the LCFS is an early action measure under AB32, California’s broader strategy to fight global warming.
The idea behind the LCFS is to require those who sell transportation fuels (i.e. oil companies) to reduce the “carbon intensity” of their fuel over time. Each type of alternative fuel receives a carbon intensity value based on its lifecycle GHG emissions, allowing oil companies to choose from a suite of alternatives (e.g. biofuels, electricity, hydrogen, natural gas, etc.) to comply with the annual, incremental LCFS carbon intensity reduction requirements.   ...
Here is where we stand with regard to implementation of the CA LCFS: The regulation was adopted in California in April 2009; however, the rulemaking process is ongoing given the number of implementation issues still unresolved.
...The trend is clearly downward with regard to indirect land use change emissions. ... However, actual adoption of a lower number has not yet occurred, and is far from certain given the caveats CARB staff included in its presentation. These deliberations are highly relevant to any fuel that uses land.
The current LCFS does not yet include pathways for cellulosic ethanol and other 2nd generation feedstock biofuels. ...
Moving Forward: The Good News for LCFS Proponents: ...CARB staff are continuing to move the ball forward despite the enormity of the task and inhibiting factors out of their control (i.e. state deficits and mandatory furloughs). ...LCFS continues to be popular in other states and regions. ...
Moving Forward: The Bad News: ...The underlying and ongoing problem with the LCFS is the regulation does not use the same carbon accounting methodologies for all fuels. ...It enforces indirect, second-order carbon effects against biofuels, and did not even assess indirect effects for other fuels. ...   READ MORE
Part 2: California’s Low Carbon Double Standard ...
Indirect Land Use Change: Why it’s a bigger problem than you might think ...The double standard comes into play with how indirect effects are applied in the LCFS. In other words, even if ILUC science matures to perfection, there are still major inconsistency problems with how the science is applied.
...When CARB included ILUC emissions for biofuels, the agency essentially decided to penalize biofuels for its impact on the “resource margin” rather than its average impact on the land resource. This basically means that instead of penalizing biofuels for its impact on the land actually used to produce the biofuel feedstock, the LCFS debits biofuels for its forecasted impact along the geographical margin of the world agricultural footprint. The rationale is that using more land in Location A will drive existing or new land users to Location B. ...(T)here is empirical data analysis suggesting that ILUC is not occurring today to any significant degree. ...
If ILUC, then CARB has an obligation to go to the resource margin for other fuels ... the definition of “full lifecycle” only changed for biofuels. In a world in which we aim to accurately compare the climate intensity of different fuels, the definition of “full” needs to be consistent. If the resource margin is in play, it should be in play for all fuels. ...
Remember that the idea at work for ILUC is that increasing demand for a finite resource has the inevitable indirect effect of pushing someone else, somewhere else. Well, this is the case for any finite resource.
For biofuels, it is land. For petroleum, it is crude oil. For natural gas, it is natural gas itself. For electricity, it is the natural resources used to produce electricity. Same for hydrogen. Let’s take a look at each fuel a little more closely, because the effects sound a lot like ILUC. ...
“Actually, we looked for them.” ...If CARB actually looked at indirect effects for other fuels, as they publicly claimed, they did so in private. The LCFS public record does not include a single analysis of the indirect effects of other fuels, and unlike ILUC, there is no contract or budget allocation to researchers to look at these effects.
When a sub-group of the broader LCFS Expert Working Group, aptly named the “indirect effects of other fuels” working group, finally looked at the issue over the last 12 months, CARB did not share the analysis they claim to have of these effects, internal or otherwise, with the sub-working group. It is therefore misleading, and legally dubious, that the LCFS Lookup Tables (the ones that will be used to enforce the LCFS within weeks) include zeroes for indirect effects for other fuels. Zero is a number, and there is no support in the public record for zero.
...Fortunately, there is a document that brings greater clarity to at least a substantial part of the indirect effects universe: the preliminary report issued by the LCFS Expert Working Group’s Subgroup on Indirect Effects of Other Fuels. This was not a full consensus document among the participants, and calls for more analysis than it actually presents, but the report provides color to the issue.
A few highlights: The report compiles data suggesting that the resource margin for petroleum is significantly more carbon intensive and significantly more expensive than the average petroleum CI value used in the current LCFS. Some of the petroleum fuels now being introduced into the marketplace in large quantities – tar sands, heavy and extra heavy oil, oil extracted using thermal enhancement – are anywhere from 15 percent to more than 100 percent more carbon intensive than the CI value given to petroleum fuels in the LCFS. READ MORE
Part III: The California LCFS and Electricity: Fair or Foul?
...The California Low Carbon Fuel Standard (LCFS) is a potentially groundbreaking yet controversial policy. LCFS proponents say the policy is performance-based, and does not pick winners and losers. Critics say the LCFS uses inconsistent carbon accounting methodologies, which in turn advantages certain fuels over others.
...Part III of this series raises some questions about the carbon accounting methodologies used to carbon score electricity under the LCFS.
...First, An Electricity Caveat Neither the author nor the New Fuels Alliance is against electrification. The data suggests that when taking into account both the carbon intensity of the fuel and how it is used in the vehicle, electric vehicles offer climate, oil dependence, and air quality benefits over petroleum-fueled vehicles. Also, electricity and biofuels should not be considered an either/or proposition, as many classes of electric drive vehicles will continue to rely on liquid fuels in certain scenarios, and some forms of transportation cannot be electrified.
...During the LCFS Board Hearing, CARB staff presented the following chart (see link to access chart), detailing the carbon intensity (CI) value of electricity (second from right) relative to gasoline and other substitutes. The chart references electricity at 35 g/MJ, which is a 64 percent reduction over the California gasoline baseline...
The question is: how did the CI value for electricity get so low? The LCFS Lookup Tables list electricity as having two different, much higher CI values – 124.10 g/MJ and 104.71 g/MJ – that are 29 percent and 9 percent more carbon intensive than California gasoline, respectively.
...CARB assumes that the marginal electron – i.e. the “new” electron produced on the margin of the electricity sector to meet new theoretical demand for electric vehicles, as opposed to the average electron on the grid today for all uses – is produced from renewables and the most efficient natural gas turbines (NGCC). The logic is that marginal electrons are cleaner because of the anticipated market penetration of more efficient electricity production technologies.
...CARB gets to the CI value shown in the chart above (35 g/MJ) by then taking the marginal electricity CI value of 104.71 g/MJ and dividing it by three to account for the efficiency benefits of the electric drive motor over the internal combustion engine.
...CARB does not score petroleum based on the marginal impact. If it did, petroleum would have a significantly higher CI value because the marginal barrel is, on balance, significantly more carbon intensive than the average barrel of oil.
...CARB took into account one part of the electric vehicle (the drivetrain), but overlooked the higher GHG emissions from electric vehicle production, particularly with regard to the mining and smelting of battery metals and the manufacturing and recycling of batteries (many of which need to be replaced within the vehicle’s lifetime). These are not insignificant emissions, and were highlighted in an LCFS Expert Working Group report (p.65).   READ MORE and MORE (Algae Industry Magazine)