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OLR Research Report


May 5, 2009

 

2009-R-0197

CALIFORNIA'S LOW-CARBON FUEL STANDARD AND CONNECTICUT

By: Kevin E. McCarthy, Principal Analyst

You asked for a summary of California's recently adopted low-carbon vehicle fuel standard. You also wanted to know whether (1) the standard bans the use of ethanol and (2) there has been consideration of adopting a similar standard in Connecticut. California's standard is described in greater detail in OLR report 2009-R-0193 (attached).

SUMMARY

The California Air Resource Board (ARB) recently adopted a regulation establishing a low-carbon standard for vehicle fuels sold in the state starting in 2011. The standard requires that the carbon intensity of fuels (the amount of greenhouse gas (GHG) emissions per unit of energy contained in the fuel) used by California's passenger vehicles be reduced by at least 10% by 2020. ARB anticipates that the standard will be met using a mix of strategies involving fuels with lower carbon intensity than conventional fuels and advanced technologies, such as plug-in electric vehicles. The standard does not ban ethanol, and explicitly contemplates that it will be one of the lower carbon fuels used to meet the standard.

In Connecticut in 2008, the Environment Committee favorably reported a bill that would have authorized the Department of Environmental (DEP) to adopt a low-carbon fuel standard comparable to that adopted by ARB. The bill was amended to eliminate this provision. The final bill (PA 08-98) instead requires DEP to monitor the development of low-carbon fuel standards in other states and jurisdictions and evaluate their potential to achieve net carbon reductions.

There have been no bills this session to establish a comprehensive low-carbon fuel standard. But there are several bills designed to promote the use of alternative fuels, including one that would require that diesel fuel and home heating oil contain an increasing amount of biodiesel.

CALIFORNIA'S LOW-CARBON FUEL STANDARD

On April 23, 2009, ARB adopted 17 Cal. Code Regs. Secs. 95480 et seq. establishing a low-carbon standard for vehicle fuels sold in the state starting in 2011. The standard was adopted pursuant to legislation passed in 2006 that creates a comprehensive, multi-year program to reduce GHG emissions in California and a 2007 executive order. The executive order sets an initial goal of reducing the carbon intensity of fuels used by California's passenger vehicles by at least 10% by 2020. The carbon intensity of fuels (the amount of GHG emissions per unit of energy contained in the fuel) accounts for direct and indirect GHG emissions on a life cycle basis that includes emissions from fuel production and distribution as well as use. In addition, the standard considers other effects, including emissions caused by changes in land use associated with the production of the fuel, which are particularly relevant for ethanol and other biofuels.

The standard applies primarily to companies such as refiners, fuel blenders, and fuel importers. It is designed to use market mechanisms to spur the introduction of lower carbon fuels. ARB anticipates that compliance with the standard will be based on a mix of strategies involving such fuels and advanced technologies, such as plug-in electric vehicles.

The standard does not ban ethanol, and explicitly contemplates that ethanol will be one of the lower carbon fuels used to meet the standard. However, the carbon intensity of ethanol and other biofuels, particularly when produced from corn, may be greater than the level assumed by proponents of greater ethanol use. A University of California study conducted in the regulation adoption process addressed the effect of land use change on climate due to expansion of biofuel production. It notes that all agricultural production contributes to the pressure to clear new land for crops. The analysis notes that recent scientific investigations suggest that enormous amounts of GHG can be released when lands are converted to more intensive cultivation and this may also cause other adverse effects such as reduced biodiversity and changed water flows. Nonetheless, ARB found that the carbon intensity of biofuels is less than that of conventional fuels and that increased use of these fuels can reduce GHG emission levels. Further information about the standard is available at www.energy.ca.gov/low_carbon_fuel_standard/index.html

ACTIONS IN CONNECTICUT

In 2008, the Environment Committee favorably reported sHB 5600, which would have authorized DEP to adopt a low-carbon fuel standard comparable to California's. As reported by the committee, the bill would have mandated a wide range of measures to reduce GHG emissions. It would have required the state to meet the 2020 and 2050 GHG emission reduction goals that are in current law and made a number of changes designed to reduce GHG emissions from the power generating, transportation, and building sectors.

Among other things, the bill would have authorized DEP to create, by regulation, a low-carbon fuel standard for vehicle and home heating fuels sold in the state. Before adopting the regulations, DEP would have to determine if a sufficient analytical framework exists to accurately measure full-lifecycle GHG emissions, including GHG emissions caused by changes in land use and other factors. DEP's assessment would have to include the modeling tools developed by ARB and U. S. Environmental Protection Agency (EPA).

The fuel full-lifecycle analysis would have to (1) include all stages of fuel and feedstock production and distribution and (2) adjust the weight for all GHG emissions relative to their global warming potential. Any adopted regulations would have to mandate the use of a sufficient analytic framework, and establish a declining standard for GHG emissions measured in CO2 equivalent grams per unit of fuel energy sold, sufficient to achieve at least a 10% reduction in the lifecycle carbon intensity of all vehicle and home heating fuels sold in Connecticut by 2020.

The standard would have to address issues associated with the production of new fuels, including sustainability, water, air, and soil quality impact, land use change, and food production. The relevant agency would have to consider other state standards when adopting the regulations.

The bill was amended in the House. House Amendment “A” made many changes in the underlying bill, among other things eliminating provisions allowing DEP to adopt a low-carbon fuel standard by regulation. The bill as amended instead requires DEP to monitor the development of low-carbon fuel standards in other states and jurisdictions; evaluate their potential to achieve net carbon reductions; and assess whether the analytical framework used to determine the carbon benefit measures the full lifecycle of GHG emissions, including emissions of GHG caused by changes in land use and other factors.

The amended bill retained provisions requiring that:

1. the assessment include the modeling tools developed by the ARB and EPA; and

2. the analytical framework (a) include all stages of fuel and feedstock production, delivery to, and use of the finished fuel to the ultimate consumer, and (b) adjust the values for all GHG emissions relative to their global warming potential.

The Senate passed the bill as amended (PA 08-98) and DEP is implementing the act.

No bills addressing a comprehensive low-carbon fuel standard have been introduced this session. But there are several proposals to promote the use of alternative fuels. These are:

1. sSB 1019, which requires diesel fuel and number two heating oil sold in the state to contain a gradually increasing proportion of biodiesel;

2. sSB 1094, which requires the Department of Transportation (DOT) to provide hydrogen refueling stations on the Merritt Parkway and other state highways for use by hydrogen-fueled vehicles; and

3. sHB 6650, which requires DOT to establish a fleet of zero emission buses to be operated by it at transit districts throughout the state.

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