New California LCFS targets must wait until 2024

California must wait until 2024 to implement tougher targets for its Low Carbon Fuel Standard (LCFS), regulators said today.

Some credit generators, during an agency workshop on potential updates to the LCFS, urged the California Air Resources Board (CARB) to reverse sinking credit prices by signaling plans to mandate deeper reductions to the carbon intensity of transportation fuels. Staff repeatedly stated that the program was working as expected and that changes to LCFS must wait to align with an ongoing, broader review of how to achieve the state climate goals.

"This is a much more ambitious goal, and one we expect the LCFS to need to play an important role in," CARB transportation fuels branch chief Cheryl Laskowski said.

The LCFS requires a 20pc reduction in the carbon intensity of transportation fuels by 2030, while the state is aiming to reduce its overall greenhouse gas (GHG) emissions by 40pc from 1990 levels by 2030 and to achieve carbon neutrality by 2045.

More modeling on how the LCFS program would fit into those plans are expected to become available in months, and staff will then work to harmonize public feedback and the state scoping plan, she said.

But ethanol producers in particular wanted faster signals to the market. Spot LCFS credits, which topped $200/metric tonne in January, fell to a more than three-year low of $142.50/t in November.

"We are seeing the failure of the program right now," ethanol producer Aemetis chief executive Eric McAfee said, noting the price drop has come "with no reaction from CARB."

Regulators "have to respond to crisis with action, and it is not action to say that two years from now, something may happen," McAfee said.

Staff today sought comment on allowing book-and-claim credits for hydrogen, assigning deficits to jet fuel used in flights within California and changes that would allow other states to more easily adopt LCFS programs. The program could also phase out credits allowed for projects that reduce the carbon intensity of petroleum production.

Workshop participants wanted more support from the LCFS for other state efforts to electrify medium- and heavy-duty vehicles, more clarity on how regulators intended to assign deficits to any volumes of jet fuel and attention to how to adjust credit generation associated with electric vehicles as those machines become more efficient.

CARB will take comment on how to revise the LCFS program until 7 January. Additional workshops will be held in 2022, staff said.

By Elliott Blackburn