11/20/24, 3:59 PM CARB updates the Low Carbon Fuel Standard to increase access to cleaner fuels and zero-emission

ero-emission transportation options

CARB updates the Low Carbon Fuel Standard to

increase access to cleaner fuels and zero-emission
transportation options

The approved program amendments will catalyze private sector investment in

decarbonizing California’s transportation sector to support climate action and
cleaner air.

DATE November 8, 2024

RELEASE NUMBER 24-26

CONTACTS
Dave Clegern
Office of Communications
[email protected]
(916) 717-9652

CATEGORIES
Topics Climate Change, Fuels
Programs Low Carbon Fuel Standard

SACRAMENTO — The California Air Resources Board today approved updates to

the Low Carbon Fuel Standard (LCFS) that channel global, national and local
private sector investment towards increasing cleaner fuel and transportation options
for consumers, accelerating the deployment of zero-emission infrastructure, and
keeping the state on track to meet legislatively mandated air quality and climate
targets.

The LCFS reduces air pollution and greenhouse gas emissions by setting a
declining carbon intensity target for transportation fuels used in California; producers
that don’t meet established benchmarks buy credits from those that do. This system

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11/20/24, 3:59 PM CARB updates the Low Carbon Fuel Standard to increase access to cleaner fuels and zero-emission transportation options

has generated $4 billion in annual private sector investment toward a cleaner

transportation sector. These investments provide multiple economic benefits to
Californian consumers, including:

Increasing consumer choices, which drives transportation fuel price

competition
Growing new industries and attracting investments that support jobs and
strengthen communities
Reducing dependence on petroleum and the oil industry, thereby protecting
consumers from its associated supply and cost volatility
Making electric vehicles more affordable
Expanding access to electric vehicle charging and hydrogen refueling
infrastructure
Reducing the health impacts and health care costs associated with air pollution
from fossil fuels

The updates set targets to reduce the carbon intensity of California’s transportation
fuel pool by 30% by 2030 and by 90% by 2045. The amendments also increase
support for zero-emissions infrastructure, including for medium- and heavy-duty
vehicles, and make more transit agencies eligible to generate credits.

The LCFS has been very effective to date, reducing the carbon intensity of
California’s fuel mix by almost 13% and displacing 70% of the diesel used in the
state with cleaner alternatives. This has displaced 320 million metric tons CO2 of
gasoline and diesel emissions since the Program’s inception. That’s an amount
equivalent 85% of today’s annual statewide greenhouse gas emissions. The growth
in the use of renewable fuel is powering needed emissions reductions in the
transportation sector.

“The proposal approved today strikes a balance between reducing the

environmental and health impacts of transportation fuel used in California and
ensuring that low-carbon options are available as the state continues to work toward
a zero-emissions future,” said CARB Chair Liane Randolph. “Today’s approval
increases consumer options beyond petroleum, provides a roadmap for cleaner air,
and leverages private sector investment and federal incentives to spur innovation to
address climate change and pollution.”

The LCFS is designed to provide the most cost-effective path to support clean fuels
and infrastructure. Affordability remains a key consideration for the Board, and it has
directed staff to assess any impacts and potential mitigation from today’s adopted

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amendments on retail gasoline prices every six months and to submit an annual
report beginning one year from the effective date of these amendments, and to
collaborate with the California Energy Commission in that effort. The program
currently limits the pass-through costs companies can shift to consumers by capping
the price of credits that high-carbon-intensity fuel producing entities are required to
purchase for compliance and allowing banking of credits bought at lower prices.
Data from third party commodities markets experts shows the current LCFS pass
through to California consumers is $0.10 per gallon of gasoline. This is consistent
with the self-reported data by high-carbon-intensity fuel producers, which reflects an
LCFS cost pass through to consumers of $0.08 to $0.10 per gallon of gasoline.

Supporting Californians

Making electric vehicles more affordable: “The LCFS has also provided
hundreds of millions of dollars of beneficial credits and incentives supporting
the build-out of EV charging infrastructure and vehicle rebates which lower the
upfront costs for drivers,” said a representative from MN8 Energy, which
produces renewable energy, in a letter submitted to CARB.
Expanding access to charging infrastructure: As of October 10, 2024, there
have been a total of 71 hydrogen stations and 749 fast EV charger sites
approved under the Hydrogen Refueling Infrastructure (HRI) and (Fast
Charging Infrastructure) FCI provisions of LCFS, respectively.
Reducing health care costs associated with pollution from dirty fuels:
CARB estimates $5 billion in savings from avoided health outcomes between
2024 and 2046.
Increasing consumer choices, which drives price competition: “By using
market-based policies that ensure the best ideas succeed, we can also
maximize impact by marshaling private capital to invest in climate solutions.
Fortunately, California already has an excellent example of this kind of
approach in the Low Carbon Fuel Standard (LCFS).”
Reducing dependence on the oil industry, thereby protecting consumers
from its associated supply and cost volatility: The LCFS has displaced
more than 30 billion gallons of petroleum fuel.

The LCFS sends long-term market signals to phase out combustion fuels and
increase zero emission fuels and transportation options. The LCFS updates adopted
by the Board were developed after a rigorous, years-long public rulemaking process

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that incorporated feedback received from interested parties. Updates include:

Providing billions of additional dollars to fund zero-emission vehicle charging

and hydrogen fueling infrastructure, including new crediting opportunities for
medium - and heavy-duty refueling infrastructure, to support implementation of
California’s zero emission vehicle regulations.
Increasing incentives for infrastructure in low-income neighborhoods and
remote locations and ensuring that historically underserved communities
receive needed investment to reduce emissions and provide equitable access
to a clean air future.
Phasing out avoided methane crediting associated with the use of biomethane
used as a combustion fuel, but extending the use of biomethane for renewable
hydrogen to align with goals outlined in the 2022 Scoping Plan – the state’s
plan for reducing climate-warming emissions and reaching carbon neutrality.

Updated guardrails

The LCFS updates also include new guardrails to avoid land use changes resulting
in potential loss of food production or deforestation. The majority of biomass-based
diesel and sustainable aviation fuel in the LCFS has historically come from waste
feedstocks, such as used cooking oil, animal fat and inedible distiller’s corn oil. To
minimize potential land use issues, the program will require fuel producers track
crop-based and forestry-based feedstocks to their point of origin. The LCFS will also
require independent feedstock certification to ensure biomass-based diesel and
sustainable aviation fuel feedstocks are not undermining natural carbon stocks.
Palm-derived fuels are also explicitly prohibited from receiving credits.

Californians will benefit from these program updates in numerous ways, including:

As consumers increase their use of low carbon intensity fuels and more
efficient vehicles, fuel costs per mile will be reduced by 42 percent - translating
to savings of over $20 billion in fuel expenditures every year by 2045. For light-
duty vehicles (cars, pickup trucks, sport utility vehicles, vans, and minivans)
these fuel cost savings will be even more pronounced, cutting today’s costs to
Californians by more than 50 percent.
The amount of LCFS proceeds invested in disadvantaged communities for
clean fuel and transportation projects is estimated to be approximately $4.8
billion in the next decade.

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Californians are expected to save almost $5 billion in health care costs by

avoiding the impacts of air pollution.
The amendments will reduce greenhouse gas emissions by 558 million metric
tons, NOx by more than 25,500 tons and PM 2.5 by more than 4,200 tons
between 2025 and 2045.

More Information

CARB's mission is to promote and protect public health, welfare, and ecological
resources through effective reduction of air pollutants while recognizing and
considering effects on the economy. CARB is the lead agency for climate change
programs and oversees all air pollution control efforts in California to attain and
maintain health-based air quality standards.

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