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Proposed LCFS revisions to reward refineries for reducing GHG emissions

March 13, 2014 by CaliforniaCarbon.info

CaliforniaCarbon.info, March 13, 2014: This week, the Air Resources Board (ARB) proposed changes to the Low Carbon Fuel Standard (LCFS) regulations that would allow petroleum refineries to earn credits within that program for reductions made to their greenhouse gas emissions.

This change was announced amidst a suite of other proposed amendments that will go before the Board for a vote later in the year. The current rewrite is inspired by a 5th District Court of Appeals ruling that ARB when it approved the fuels law violated the California Environmental Quality Act (CEQA) and the state Administrative Procedures Act (APA). The LCFS was first approved in 2009, and aims to cut the carbon content of fuels sold in California 10 percent by 2020.

Petroleum refineries and hydrogen plants are currently a covered sector under California’s pioneering cap-and-trade program similarly established under the landmark AB32 bill. The passage of the LCFS regulatory changes would mean that refineries would be rewarded twice for making reductions to their emissions.

The refineries and hydrogen sector contributes 22% of emissions under the first phase of California’s cap-and-trade program. In an earlier analyst note, CaliforniaCarbon.info predicted that this sector is likely to be short by a cumulative total of 14 million to 16 million tons by 2020, with the shortfall likely to be triggered in 2016.

For more information on this article, please write to contact@californiacarbon.info.

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