Five Things You Didn’t Know About California’s Low Carbon Fuel Standard

New industry compliance data on the state’s Low Carbon Fuel Standard (LCFS) Program shows that the LCFS—which requires the oil industry to help reduce carbon pollution from transportation fuels by 10 percent by 2020 through increasing the mix of low-carbon fuels—is already working and exceeding expectations.

That’s good news because transportation fuels are responsible for nearly 40% percent of the carbon emissions in California, home to 30 million cars, trucks, and buses.

As highlighted below by the California Delivers coalition, which NRDC is a member of, an analysis of the data released last month by the California Air Resources Board reveals some important results about the program that has been in operation for the past five years:  

1. Industry has exceeded the standard on average by over 80 percent, slashing 16.6 million tons of carbon pollution.

Despite the oil lobby’s annual pilgrimage to the legislature to argue the standards won’t work, the data is showing the industry has actually greatly outperformed the standard. Enough early reductions are now “in the bank” to meet standards until 2019, just assuming industry maintains last year’s level of performance.  Of course, the clean fuels industry—including biodiesel, renewable diesel, advanced ethanol, biogas, hydrogen, and clean electricity—will only grow and enable standards to be met in 2019 and well beyond. Policy stability and business certainty, however, are critical to the clean fuels market.

2. The LCFS, together with statewide carbon pollution limits, has helped save the state $1.6 billion in health-related impacts from air pollution to date.

A study by the American Lung Association and Environmental Defense Fund estimates that the LCFS, together with statewide carbon pollution limits (known as AB32 cap-and-trade), has helped avoid $1.6 billion in health-related impacts from air pollution so far. These benefits will continue to grow to an estimated $8.2 billion annually by 2025 as the use of very low-carbon fuels grows. These clean transportation  programs are estimated to have helped avoid nearly 90,000 cases of respiratory symptoms, 8,000 cases of asthma-related health issues, and 15,000 lost work days. Over time, these numbers will also continue to grow.

Image courtesy of the American Lung Association of California

3. A record amount of low-carbon, alternative fuels was used in California.

Over the five years, the supplies and use of lower-carbon, alternative fuels grew by a record 36 percent in the state, helping displace the need for over 6.6 billion gallons of petroleum based gasoline and diesel. That’s the equivalent to displacing all the fuel used in the South Coast—Los Angeles, Riverside, San Bernadino, and Orange County—for over a year. 

Courtesy of CA Delivers campaign

4. One of the world’s largest market for clean fuels has been created.

The LCFS program has helped increase the market value of the clean fuels market—including investments in production and distribution—by an estimated $650 million since 2011. While this is still only a fraction of the hundreds of billions spent over the same time period on petroleum-based fuels in California, the LCFS is jumpstarting increased investments across the clean fuel supply chain.

5. The LCFS has created a bridge to a lower cost, low-carbon future, despite the oil industry’s rhetoric

Just two years ago, Business Week reported on the oil lobby’s creation of 16 fake consumer and advocacy groups targeting California’s climate programs, including the Low Carbon Fuel Standard.  Part of the oil industry’s road show was to claim that California was headed to a “LCFS Fuels Cliff” in 2015, predicting that “bad things” would happen, including “price spikes, fuel shortages and more.”  In an ironic twist, an explosion at the Exxon Mobile Torrance refinery in Southern California in early 2015 was the major culprit behind an actual “bad thing” happening. The explosion led to four injured workers, reduced gasoline supplies to Southern California as well as the rest of the state, and higher pump prices costing consumers $2.4 billion. Following the explosion, the California economy shrank by $6.9 billion in the first six months alone, according to a study by RAND.

Fortunately for California, most policymakers were smart enough to see through these claims and rejected the oil lobby’s efforts to derail environmental standards. A  bona-fide consumer group, Consumers Union (the policy arm of Consumers Report), issued a report in March that found the LCFS, together with California’s portfolio of clean transportation measures, will save California households up to $1,530 each year by 2030, helping lower consumer fuel costs and insulating consumers—particularly low-income consumers—against gasoline price spikes.  

The actual compliance data is further confirming that the LCFS is indeed working for California.

To see more charts and graphics underscoring these points, visit California Delivers.

About the Authors

Simon Mui

Senior Scientist, Climate & Clean Energy Program

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