UC Davis Institute of Transportation Studies

The Low Carbon Fuel Standard (LCFS), adopted in California in 2009, contributes to Californiaʼs overall greenhouse gas (GHG) emission reduction goals under the Global Warming Solutions Act of 2006 (AB 32). It is a performance-based regulation that requires regulated parties (fuel producers and importers to California) to reduce the carbon intensity (CI) of their fuel mix by at least 10% by 2020. It sets declining annual targets, starting slowly with a 0.25% reduction in 2011 and increasing to 10% reduction by 2020. The program incentivizes the adoption of low-carbon fuels based on its calculation of the fuelʼs lifecycle emissions. The LCFS credits and deficits are generated based on a fuelʼs emissions below or above the standard. The credits can be traded or banked over time.

The periodic status review series provides updates on LCFS compliance and markets, and addresses selected special topics. Each report reviews data, analyzes trends, and identifies potential challenges. The principal data source is the California Air Resources Board (ARB), the regulatory agency administering the LCFS; summaries and data spreadsheets can be downloaded at http://www.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm.

This third report addresses the following topics:

Credits and deficits;

Carbon intensity of fuels;Credit trading and credit prices;

Interactions between the federal Renewable Fuel Standard (RFS2) and LCFS;

Special topic: cost containment mechanisms (CCMs).