The California Air Resources Board (CARB) has approved updates to the Low Carbon Fuel Standard (LCFS) that channel global, national and local private sector investment toward increasing cleaner fuel and transportation options for consumers, accelerating deployment of zero-emission infrastructure, and keeping the state on track to meet legislatively mandated air quality and climate targets.
The LCFS reduces air pollution and greenhouse gas emissions by setting a declining carbon intensity target for transportation fuels used in California; producers that don’t meet established benchmarks buy credits from those that do. This system has generated $4 billion in annual private sector investment toward a cleaner transportation sector. These investments provide multiple economic benefits to Californian consumers, including:
- Increasing consumer choices, which drives transportation fuel price competition
- Growing new industries and attracting investments that support jobs and strengthen communities
- Reducing dependence on petroleum and the oil industry, thereby protecting consumers from its associated supply and cost volatility
- Making electric vehicles more affordable
- Expanding access to EV charging and hydrogen refueling infrastructure
- Reducing the health impacts and health care costs associated with air pollution from fossil fuels
The updates set targets to reduce the carbon intensity of California’s transportation fuel pool by 30% by 2030 and by 90% by 2045. The amendments also increase support for zero-emissions infrastructure, including for medium- and heavy-duty vehicles, and make more transit agencies eligible to generate credits.
The LCFS has lowered the carbon intensity of California’s fuel mix by almost 13% and displaced 70% of the diesel used in the state with cleaner alternatives. This has displaced 320 million metric tons of CO2 from gasoline and diesel emissions since the program’s inception. That’s an amount equivalent to 85% of today’s annual statewide greenhouse gas emissions. The growth in the use of renewable fuel is powering emissions reductions in the transportation sector.
“The proposal approved today strikes a balance between reducing the environmental and health impacts of transportation fuel used in California and ensuring that low-carbon options are available as the state continues to work toward a zero-emissions future,” says CARB Chair Liane Randolph. “Today’s approval increases consumer options beyond petroleum, provides a roadmap for cleaner air, and leverages private sector investment and federal incentives to spur innovation to address climate change and pollution.”
The updated LCFS supports Californians by:
- Making EVs more affordable — “The LCFS has also provided hundreds of millions of dollars of beneficial credits and incentives supporting the buildout of EV charging infrastructure and vehicle rebates which lower the upfront costs for drivers,” said a representative from MN8 Energy, which produces renewable energy, in a letter submitted to CARB.
- Expanding access to charging infrastructure — As of Oct. 10, 2024, a total of 71 hydrogen stations and 749 fast EV charger sites have been approved under the Hydrogen Refueling Infrastructure (HRI) and Fast Charging Infrastructure (FCI) provisions of LCFS, respectively.
- Reducing health care costs associated with pollution from dirty fuels — CARB estimates $5 billion in savings from avoided health outcomes between 2024 and 2046.
- Increasing consumer choices, which drives price competition — “By using market-based policies that ensure the best ideas succeed, we can also maximize impact by marshaling private capital to invest in climate solutions. Fortunately, California already has an excellent example of this kind of approach in the Low Carbon Fuel Standard.”
- Reducing dependence on the oil industry, thereby protecting consumers from its associated supply and cost volatility — The LCFS has displaced more than 30 billion gallons of petroleum fuel.
Updates to the LCFS include:
- Providing billions of additional dollars to fund zero-emission vehicle charging and hydrogen fueling infrastructure, including new crediting opportunities for medium- and heavy-duty refueling infrastructure, to support the implementation of California’s zero emission vehicle regulations.
- Increasing incentives for infrastructure in low-income neighborhoods and remote locations and ensuring that historically underserved communities receive needed investment to reduce emissions and provide equitable access to clean air.
- Phasing out avoided methane crediting associated with the use of biomethane used as a combustion fuel, but extending the use of biomethane for renewable hydrogen to align with goals outlined in the 2022 Scoping Plan — the state’s plan for reducing climate-warming emissions and reaching carbon neutrality.
