Here’s How Clean Energy Can Fuel NY

The transportation sector is the largest contributor to climate pollution nationally and in New York State. But there are effective solutions that our policymakers can adopt right now to address this, including a low-carbon fuel standard (LCFS). This is why NRDC is joining the Clean Fuels NY Coalition—to help push for an LCFS in New York this legislative session.

Jessica Russo

What Is an LCFS?

An LCFS is a technology-neutral, performance-based greenhouse gas emissions standard for fuels. It works by limiting, and over time further reducing, the amount of greenhouse gases that can be emitted per unit of transportation energy sold. The standard does not limit the amount of energy, just its carbon footprint, which urges the uptake of cleaner fuel sources.

How an LCFS Would Benefit New York

New York recently adopted the Climate Leadership and Community Protection Act (CLCPA), which sets one of the world’s most ambitious climate targets while creating opportunities for innovative businesses and regional development. (See here for a primer.) But to help meet the new climate law’s ambitious targets, New York must dramatically reduce transportation emissions, which account for the largest and most persistently increasing portion of New York’s greenhouse gas emissions. A well-designed and effectively implemented LCFS can provide a valuable tool in the state’s climate toolbox to tackle this challenge. An LCFS would also encourage innovation by driving a shift away from our near sole dependence on gasoline and other petroleum products for our transportation needs—roughly 190 million barrels’ worth—toward cleaner sources of energy, such as electricity from a growing share of renewables and liquid fuels from organic wastes.

Low-carbon fuel standards are not new. Several jurisdictions, including California, Oregon and British Columbia have adopted the policy. In California, from 2011 to early 2018, the state’s LCFS has been credited with reducing 38 million tons of carbon pollution, avoiding burning 13.7 billion gallons of petroleum, averting hundreds of premature deaths and millions in public health impacts, and boosting the transportation-related alternative energy and renewable fuels industries. 

A New York LCFS likewise would have significant benefits. Foremost, via significant emissions reductions in the transportation sector, an LCFS would help New York meet its new climate goals as enshrined in the CLCPA. While its explicit focus is on carbon pollution, an LCFS would also drive steep reductions in criteria co-pollutants that impair air quality in the state: over 50 percent of New Yorkers live in communities that fail to meet minimum air quality standards. What’s worse, this is disproportionately the case for low-income residents.

Furthermore, an LCFS-enabled market-based credits system could generate revenues, additional to any state financing, for entities that supply clean energy (e.g., utilities providing power for electric vehicles, or biofuels or biogas producers), which may then be reinvested into clean energy infrastructure and incentives. This would encourage innovative technologies and business models, create well-paying in-state jobs, and sustain vibrant communities. Lastly, New York spent roughly $14 billion in 2016 to import gasoline and petroleum products from outside the state, largely to power cars and trucks. We can keep that money in the state—again boosting local economies—under an LCFS that shifts the sector towards homegrown, in-state energy sources. Costs for administering the LCFS would likely be covered through fees on regulated entities.

How an LCFS Would Complement Other Key Policies

While an LCFS would be technology-neutral, we see strong potential for it to accelerate the uptake of electric vehicles—electric passenger cars, trucks and buses. Electric vehicles will be central to slashing emissions in the state over the long-term in a durable manner. Furthermore, electric vehicles would reduce drivers’ fuel bills because electricity is cheaper per mile than gasoline and diesel. Renewable liquid fuels may also play a part, especially over the shorter-term and/or in heavy vehicles and off-road transportation.

We believe that an LCFS should be a part of a portfolio of policies to fight pollution from transportation and reduce New Yorkers’ dependence on oil. It would complement the state’s clean vehicle standards and potentially help fund electric vehicle purchase incentives and essential utility-led deployment of electric vehicle charging infrastructure. Importantly, it can and should also operate hand-in-hand with a regional transportation emissions cap-and-invest framework as envisioned under the Transportation and Climate Initiative—a critical policy that New York must help spearhead to begin cutting emissions from the transportation sector while generating the revenue needed to fund clean transportation solutions at scale.

We hope that Governor Cuomo, policy makers and legislators wholeheartedly pursue options in early 2020 to implement an LCFS in New York. Draft bills in the NY Assembly and Senate are encouraging. Watch this space for updates on this front.

About the Authors

Vignesh Gowrishankar

Associate Director, Climate & Clean Energy Program

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