We strongly support the LCFS, which will reduce the carbon intensity of California’s transportation fuels ten percent by 2020, and even more by 2030. The LCFS gives us the incentives we need to invest in early-commercial vehicle and fuel technologies today in order to bring down the costs for all Californians in the future.

—Letter of support

The LCFS sets annual carbon intensity (CI) standards—which reduce over time—for gasoline, diesel, and the fuels that replace them. Carbon intensity is expressed in grams of carbon dioxide equivalent per megajoule of energy provided by that fuel. CI takes into account the GHG emissions associated with all of the steps of producing, transporting, and consuming a fuel—the complete lifecycle of that fuel. The LCFS is fuel-neutral, and lets the market determine which mix of fuels will be used to reach the program targets.

Fuels and fuel blendstocks introduced into the California fuel system that have a CI higher than the applicable standard generate deficits. Similarly, fuels and fuel blendstocks with CIs below the standard generate credits. Compliance is achieved when a regulated party uses credits to offset its deficits.

The 2020 average CI requirement from the compliance schedule is 88.62 gCO₂e/MJ for gasoline and 91.81 gCO₂e/MJ for diesel. Under the current LCFS regulation, the 2020 standard of a 10% CI decline will also be imposed for all years post-2020.

In January 2017, the California Air Resources Board (ARB) released its proposed updated scoping plan to reduce greenhouse gas emissions by 40% below 1990 levels by 2030. One of the major elements of the plan is a more stringent Low Carbon Fuel Standard that would reduce CI by 18% by 2030. (Earlier post.)

Signatories to the letter include clean fuel producers, vehicle manufacturers, and vehicle fleet operators. In the letter, signatories lauded the LCFS because it provides the incentives needed to invest in new clean vehicle and fuel technologies today in order to bring down the costs for all Californians in the future.

The state’s flourishing clean economy was a major focus of the letter. As indicated in the letter, the LCFS has supported the development of more than 20 low-carbon fuel plants throughout the state, with additional facilities on the horizon. Since 2011, $1.6 billion has been invested in clean fuels production under the LCFS.

Signatories also note the LCFS has been a vital tool for bringing lower carbon transportation to disadvantaged communities and that the policy improves air quality in areas like the San Joaquin Valley and the South Coast Air Basin, two regions that suffer from the nation’s worst air quality.

According to a 2016 ConsumersUnion report, the LCFS will save California consumers $1,210 to $1,530 in annual fuel costs while encouraging new mobility options and more alternative fuel choices.