The California Air Resources Board (CARB) released additional modifications to the Low Carbon Fuel Standard (LCFS).
In-State Oil Production: There are no immediate changes to restrict in-state crude production directly, but the amendments favor alternatives like biofuels or electrification for transportation. However, no specific provisions directly accelerate the phase-out of California crude.
Imported Crude Oil: The amendments do not address new regulations promoting the use of imported crude over domestic oil. However, the misaligned carbon intensity (CI) values CIPA raised in February 2024 persist.
The OPGEE model still underestimates the CI of foreign crudes while overestimating California’s, making your push for proper analysis even more critical. In-state crude is locally regulated and results in fewer emissions than foreign crude from sources like Saudi Arabia and Ecuador, which the OPGEE model inaccurately represents.
Hydrogen Deadline Adjustments: The deadline for hydrogen produced using fossil gas as a feedstock has been extended from 2030 to 2035, which might delay specific market shifts.
Auto Acceleration of Compliance Curve: CARB is moving toward quarterly reviews of LCFS credit information rather than on an annual basis. This could impact compliance stringency for the program.
Sunflower Oil: LCFS adds sunflower oil to the list of virgin crop-based feedstocks, alongside soybean and canola oil, that are limited in terms of generating LCFS credits. Specifically, any biomass-based diesel produced from sunflower oil that exceeds 20% of the total fuel production will be assigned a higher carbon intensity (CI) score—the same as conventional diesel or the certified CI for that fuel pathway, whichever is greater. This is in response to public feedback expressing concern that limiting the regulation to soybean and canola oil would inadvertently incentivize switching to other oilseeds, like sunflower oil, for biofuel production.
Flexible Reporting: CARB is making flexibility adjustments in reporting and credit generation for hydrogen and electricity-based projects - an effort to support renewable energy and zero-emission vehicle (ZEV) infrastructure by allowing them to scale quickly and make them more financially feasible.