Abstract
California's Low Carbon Fuel Standard (LCFS) is one of the most important policies to develop and deploy low-carbon and carbon-negative fuels. Yet, because the LCFS is designed to deliver the lowest-cost carbon intensity (CI) reductions possible in the transportation fuel system, it may fail to deliver technologies that would be poised to offer deeper decarbonization or other ancillary benefits to California's people and environment. We contemplate administrative changes to the LCFS to further stimulate the commercialization of promising low-carbon and carbon-negative fuels. To do so, we examine promising technical pathways, their barriers to commercialization, and recent administrative actions by the CA Air Resources Board (ARB) under the LCFS to promote novel lower-carbon fuels. We propose three actions that ARB could undertake to promote commercialization within existing authorities. To commercialize low-carbon and carbon negative fuel, including those derived from forest residue feedstocks, ARB could: (1) embrace the most up-to-date science regarding lifecycle greenhouse gas emissions, (2) create additional, targeted incentives for very low-carbon or carbon-negative fuels through a volumetric technology carve-out or credit multiplier, and (3) ensure that the LCFS stimulates the best-performing fuels across a variety of sustainability parameters.
Highlights
Deep Decarbonization in California’s Low Carbon Fuel StandardCalifornia’s Low Carbon Fuel Standard (LCFS) is emerging as one of the most important policies to develop low-carbon and carbon-negative fuels, which have a very low or negative carbon intensity (CI) based on lifecycle assessment
Despite the large financial incentives for low-carbon and carbon-negative fuels in California, these fuels may require additional support to be successfully commercialized. This is because low-carbon and carbon-negative fuels have not overcome the so-called “commercialization valley of death,” which can occur for technologies that have already demonstrated proof of concept but still require large capital infusions to demonstrate that their design and manufacturing processes can be brought to full commercial scale (Jenkins and Mansur, 2011)
This article contemplates administrative changes to the LCFS to further stimulate the commercialization of promising low-carbon and carbon-negative fuels
Summary
California’s Low Carbon Fuel Standard (LCFS) is emerging as one of the most important policies to develop low-carbon and carbon-negative fuels, which have a very low or negative carbon intensity (CI) based on lifecycle assessment. Using just the cheapest abatement options to meet the 2020 target can create carbon-intensive lock-in and make the 2050 target too expensive to reach.” This is the reason the LCFS exists was adopted by California’s Air Resources Board all; it will help spur early action on deeper abatement pathways that will be necessary in the long run Just as California requires the LCFS policy to stimulate action in the transportation fuels space—action that will eventually be necessary to reach deep mitigation targets—the State may require action within the LCFS program to spur development of technologies capable of deeper mitigation than those that are emerging currently from the LCFS market It is worth considering whether the LCFS can be leveraged to achieve broader state goals beyond only fuel carbon intensity (CI) reduction, such as wildfire risk reduction. California’s forest management crisis has important implications for public safety, biodiversity conservation, water resource management, air quality, climate change, and the state’s
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