Industry News

CARB OK’s Low Carbon Fuel Rules

April 24, 2009

The California Air Resources Board (CARB) has voted 9-1 to approve new rules requiring low carbon fuels as part of California’s efforts to reduce greenhouse gas emissions. The standards are the first of their kind in the nation and are expected by some to create a new market for alternative fuels, as well as serve as a guideline to national rules advocated by the Obama administration.

The rules call for reducing the carbon content of fuels sold in the state by 10% by 2020. It not only covers the content of the fuel itself, but also all of the emissions generated by the process of delivering gasoline and diesel fuel to the state. This includes everything from drilling an oil well or planting corn for biofuel to the emissions from trucks delivering the fuel to gas stations. It will mainly impact the transportation sector, which accounts for 40% of GHG emissions in California, CARB said.

California Gov. Arnold Schwarzenegger said the rule would "reward innovation, expand consumer choice and encourage the private investment we need to transform our energy infrastructure." CARB Chairwoman Mary Nichols said the action was “creating the framework for a new way of looking at automotive fuels where no longer will gasoline derived by petroleum be the only game in town."

Representatives of the ethanol industry have criticized the rule, saying state regulators overstated the environmental effects of corn-based ethanol. They also have criticized the board's intention to link global deforestation and other land conversions to biofuel production in the United States. The ethanol industry also said it was unfair to penalize it for agricultural land changes abroad.

CARB Board Member John Telles, who cast the lone “no” vote, said that proponents of the plan ignored the comments of 125 scientists who questioned the agency's decision to estimate the emissions tied to land-use changes.

Interestingly, representatives for BP and Chevron Corp. said they supported the new standards. Under the low-carbon fuel standard, petroleum refiners, companies that blend fuel and distributors must increase the cleanliness of the fuels they sell in California beginning in 2011.