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Study escalates debate over California’s low-carbon fuel standard

A new study funded by alternative-fuel industry organizations claiming that biofuels are advancing at a pace to enable fuel suppliers to meet all stages of California’s landmark low-carbon fuel standard (LCFS) is escalating the debate over the state’s regulation, which is seen as a model for other states and the federal government.
While the clean-fuel industries are touting the study as showing enough supply of alternative fuels and bankable credits will be available to provide regulated companies several options to meet the LCFS through 2020, oil industry representatives point out that the study fails to include any information about how much the fuels will cost and potential economic impacts to the state from those costs.
The study, “California’s Low Carbon Fuel Standard: Compliance Outlook for 2020,” was drafted by ICF International and prepared for the California Electric Transportation Coalition, National Biodiesel Board, California Natural Gas Vehicle Coalition, Advanced Biofuels Association, Ceres and Environmental Entrepreneurs — all advocates or investors in alternative fuels.
The executive summary of the study says it is the first phase of a two-phase, year-long project assessing the economic and environmental impacts of compliance with the LCFS through 2020.
The first phase “focuses on the development of compliance scenarios based on market research, consultation with stakeholders, and market forecasts based on best estimates of fuel availability.” The compliance scenarios are used to “convey the outcomes of our research and analysis: namely, that the LCFS requirements can be achieved through modest changes in the diversity of transportation fuels supplied to California.”
The second phase of the work will focus on the economic and environmental impacts of these compliance scenarios, including parameters such as gross domestic product, jobs, and avoided damage costs, the report says.
The study concludes that the alternative fuels market “is evolving rapidly and in unforeseen ways, and the LCFS is driving investment in low carbon ethanol, biodiesel, renewable diesel, and biogas.” The report notes the “immediate availability” of lower carbon biofuels such as biodiesel from corn oil, waste greases, and animal fats; renewable diesel from tallow; and ethanol from molasses.
Though cellulosic biofuels have been produced “at a slower-than-expected rate, these lower carbon biofuels are available to California in significant quantities today and supply is forecasted to increase dramatically over the next several years,” the report says.
(July 3, 2013)