Clock ticks for New York LCFS

New York lawmakers have only a month left to approve a proposed low-carbon fuel standard (LCFS), with biofuel producers and electric vehicle manufacturers hoping for swift passage.

A bill to create an LCFS that requires a 20pc reduction in the carbon intensity of the state's transportation fuels by 2030 has yet to move out of a state Assembly committee and faces a deadline of 10 June for passage, when the 2021 legislative session comes to a close.

But supporters remain hopeful lawmakers will soon act in order to support New York's climate policy goals, including a mandate to cut greenhouse (GHG) gas to cut GHG emissions by 40pc by 2030 and 85pc by 2050, both in relation to 1990 levels.

"We are facing an urgent climate crisis and we need to begin our transition away from fossil fuels starting now. A clean fuel standard will help us get there," New York League of Conservation Voters (NYLCV) president Julie Tighe said.

The NYLCV is leading the Clean Fuels NY Coalition, which has been lobbying for the legislation's passage as a way to help the state reach its climate goals. The coalitions' 60 members include biofuel producers, automakers, farming groups and environmental organizations.

The New York Climate Action Council's transportation advisory group, on which Tighe serves, yesterday endorsed the LCFS as one of a number of climate policy recommendations for the state, which proponents of the legislation had long hoped for.

But hurdles to passage remain.

"The bill has less momentum than one would suspect due to uncertainty by some as to whether a clean fuel standard serves disadvantaged communities and air quality sufficiently well," Low Carbon Fuels Coalition executive director Graham Noyes said.

Noyes said he believes that the experiences in California and Oregon, where LCFS programs have helped provide immediate improvements in air quality and while supporting transportation electrification, will help sway New York lawmakers.

"We are optimistic that by engagement on the substance of these issues, we will grow the enthusiasm for the bill and get it across the line," he said.

But the bill is facing resistance from some environmental groups.

"The state has to be on a trajectory to wind down the combustion of fuels so the idea of incentivizing the continued combustion is not consistent with the state's climate law," said Conor Bambrick, climate policy director for Environmental Advocates NY. "We are not comfortable supporting the legislation in the current state."

Environmental justice concerns have also been prominent in California's climate policy debates in recent years.

Many environmental justice groups have opposed California's cap-and-trade program for not doing enough to help improve air quality in low-income areas. Pressure from environmental justice advocates eventually led California lawmakers to pair an extension of cap-and-trade with additional programs and investments to address local air quality concerns.

Success in New York would create a significant opportunity for expanding the US market for biofuels.

Much of the growth in biofuel sales in recent years has been mostly concentrated in California, where producers can layer the value of federal renewable identification numbers (RINs) on top of lucrative California LCFS credits, which Argus assessed yesterday at $188/t for prompt delivery. The credits have averaged $190/t since the start of the year.

New York is not the only state looking to emulate California and Oregon's LCFS programs. Washington state lawmakers approved LCFS legislation on 25 April and governor Jay Inslee (D) is expected to sign it into law soon. A number of other states are also exploring the option as they look to bolster the use of less carbon-intensive fuels and technologies to help meet their climate policy goals.

By Jessica Dell