Full Title: California’s Low Carbon Fuel Standard
Author(s): Danny Cullenward
Publisher(s): Kleinman Center for Energy Policy at the University of Pennsylvania
Publication Date: October 7, 2024
Full Text: Download Resource
Description (excerpt):
California’s Low Carbon Fuel Standard (LCFS) is a prominent and increasingly controversial part of the state’s climate mitigation strategy. The LCFS requires the carbon intensity of transportation fuels sold in California to decline every year. To comply, bulk fuel sellers must either reduce emissions within their own supply chains or procure credits from companies that sell lower-carbon fuels—all based on life cycle carbon intensity calculations overseen by the state climate regulator.
The LCFS program mobilizes significant financial flows through private transactions, rather than by raising public funds from auctioning pollution rights. It has issued more than 22 billion dollars’ worth of credits for low-carbon fuels since 2013 and has transformed the market for diesel fuels, where since 2023 biofuels have accounted for more than half of statewide consumption. As the state climate regulator considers amendments to increase the LCFS program’s ambition, three prominent areas of debates have emerged.