California LCFS could open new 700 million gallon market

By NBB | July 17, 2012

This spring, the Ninth Circuit Court of Appeals lifted an injunction on the low carbon fuel standard (LCFS), a promising step that could open a 700 million gallon market for biodiesel. The LCFS is a California Air Resources Board regulation designed to reduce the carbon intensity of fuels sold in California 10 percent by 2020. This could mean more biodiesel sales in California than ever before.
The National Biodiesel Board’s state governmental affairs team, led by Shelby Neal, has spent time and resources to stay engaged in this important effort during the past several years. 

In CARB’s 2011 Program Review Report, the agency identified a number of compliance scenarios in which the LCFS target reductions could be met. By 2017, each of these scenarios relied upon B20 in every gallon of California diesel, or about 700 million gallons per year in total. Some think even more biodiesel will be needed to meet the targets in the later years of the policy.

“Either way, California has the potential to be a tremendous market for biodiesel,” Neal said. “Biodiesel is one of only a very few low carbon fuels produced at commercial scale.”

Neal added that the CARB staff understands that biodiesel is an important and necessary tool for the state to meet its low carbon goals. 

“While regulatory challenges continue to exist, CARB has taken a solutions-oriented approach toward biodiesel and I think these issues will ultimately be resolved,” Neal said. 

Nothing, however, is a done deal yet. And the final outcome of the lawsuit against the LCFS is even less clear. 

“Nevertheless, should the LCFS move forward on a permanent basis, NBB members should know that we have done everything we can to position biodiesel for success within that policy framework,” Neal said.

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