The California Air Resources Board (CARB) Low Carbon Fuel Standard (LCFS) is a regulatory program designed to reduce greenhouse gas (GHG) emissions from the transportation sector by lowering the carbon intensity (CI) of fuels used in California. The program incentivizes the production and use of cleaner alternative fuels while discouraging reliance on high-carbon fossil fuels.

Key Components of the LCFS

1. Carbon Intensity (CI) Targets
   • The LCFS establishes declining annual CI targets for transportation fuels, measured in grams of CO₂ equivalent per megajoule (gCO₂e/MJ).
   • Fuel providers must reduce the carbon intensity of their fuel mix over time.
2. Credit and Deficit System
   • Fuels with a CI below the standard generate credits, while those with a CI above the standard generate deficits.
   • Fuel producers or importers must balance deficits with credits to remain compliant.
   • Companies can buy, sell, or trade credits in the LCFS market.
3. Eligible Low-Carbon Fuels
   • Renewable diesel, biodiesel, ethanol, electricity, hydrogen, compressed natural gas (CNG), and other alternative fuels can generate LCFS credits if they meet CI reduction thresholds.
   • Carbon capture and sequestration (CCS) and certain refinery process improvements can also generate credits.
4. Lifecycle Analysis
   • CARB uses a lifecycle assessment (LCA) model to calculate the total emissions of a fuel from production to use (i.e., “well-to-wheel” emissions).
   • The CA-GREET model is used to assess fuel pathways.
5. Compliance and Enforcement
   • Regulated entities include fuel producers, importers, refiners, and distributors.
   • Non-compliance results in penalties, including monetary fines.
6. Program Expansion
   • The LCFS program has been revised multiple times to tighten targets, add new credit-generating activities (e.g., zero-emission vehicle infrastructure), and align with California’s broader climate goals.

Current and Future Requirements

• CI Reduction Targets: The current target is to reduce the CI of transportation fuels by 20% by 2030, compared to 2010 levels.
• Integration with California’s Climate Goals: The LCFS supports net-zero emissions goals by promoting sustainable fuel alternatives.
• Advanced Technologies: Incentives are increasing for electrification, hydrogen fuel cells, and carbon capture projects.

Impact on Industries

• Fuel Producers: Must invest in cleaner technologies or buy credits.
• Transportation Companies: Benefit from credits for using low-carbon fuels.
• Energy Providers: Electric vehicle (EV) charging and hydrogen fueling infrastructure can generate credits.

ECO, Inc. is the world’s leading engine and vehicle emissions certification consulting firm, specializing in certification management and regulatory analysis. We have dedicated ourselves to staying informed and educated on the path of least resistance and penalty for CARB’s LCFS requirements and practices. By utilizing organizational relationships and first hand information, we take the guesswork out of an often confusing landscape to make sure that you are compliant.