implementation of california’s low carbon fuel standard · implementation of california’s low...
TRANSCRIPT
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7th ISCC Global Sustainability Conference
Jim Aguila, Chief Program Planning & Management
Industrial Strategies Division
Implementation of California’s
Low Carbon Fuel Standard
February 15, 2017
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Today’s Agenda
• Low Carbon Fuel Standard Background
• Current ARB Views on LCFS Verification
Program
• Next Steps
• Questions
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Low Carbon Fuel Standard (LCFS)
Background
• LCFS mandated by California legislature via Assembly Bill 32
• Original Board adoption in 2009, amended in 2011, readopted by
Board in 2015
• Credit market based strategy to reduce carbon intensity of
transportation fuel pool by at least 10% by 2020
• Expected benefits:
• Complement other GHG actions
• Transform and diversify fuel pool
• Reduce petroleum dependency
• Reduce emissions of other air pollutants
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LCFS Regulation Standard Based on
Fuel Carbon Intensity (CI)
• Fuel CI derived from GHG lifecycle assessment of fuels expressed as
gCO2e/MJ
• ARB staff reviews fuel CI pathway code applications and certifies fuel
pathway code CI values
• Fuel CI calculations based on the California Greenhouse Gas, Regulated
Emissions, and Energy Use In Transportation model CA-GREET
• Amount of LCFS credits generated mainly determined from Fuel CI and
reported fuel volume
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Examples (as of 2/2/17):
Gasoline 100 gCO2e/MJ
Diesel 102 gCO2e/MJ
Biodiesel 9 to 62 gCO2e/MJ
Ethanol 7 to 89 gCO2e/MJ
Natural Gas -273 to 90 gCO2e/MJ
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LCFS Carbon Accounting System
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Fuels above standard generate deficits
Fuels below standard generate credits
= deficit
= credits
x
x
1 LCFS Credit=1 MT CO2e
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Growing LCFS Credit Market
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Source: https://www.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm
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ARB Prioritizing Need for LCFS
Verification Program
• Safeguard against fraud
• Improve pathway carbon accounting and reporting
accuracy
• Strengthen buyer confidence with added integrity to the
LCFS credit market
• Staff to present proposed LCFS regulation amendments to
the Air Resources Board in early 2018
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LCFS Rulemaking Timeline
LCFS
Progress
Report
to Board
Q3
Regulation Notice,
Staff Report,
Environmental &
Economic Analyses
Public Workshops
1st Board
Hearing
Q4 Q1 2018
2nd Board
Hearing
Q2
Fuel-Specific Meetings
Q4 Q1 2017
Formal Comment
Period
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Current ARB Views on LCFS
Verification Program
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Guiding Principles- LCFS Third-Party Verification Design
① ARB retention of sole authority over the LCFS program,
including verification requirements;
② Continual improvement in the detection, prevention, and
correction of errors or fraud;
③ Identification and implementation of cost reducing strategies,
while maintaining verification rigor;
④ Policy consistency with other ARB verification programs; and
⑤ Consideration of the unique attributes of fuel carbon
intensities and fuels marketing structure.
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LCFS Third-Party Verification
Overview
• Governance structure to recognize ARB role as Accrediting Body
• ARB to accredit Verifying Bodies which will conduct verification audits (similar to Certifying Bodies under ISCC Certification
Scheme)
• LCFS verification to address:
• Initial validation of CA-GREET input data from fuel CI pathway applications
• Assurance that the actual CI of biofuel CI sold in CA. < ARB approved fuel pathway CI value
• Assurance of reported fuel quantity accuracy
• Biofuel producers to be subject to fuel CI lifecycle verification
audits, including production and certain feedstock supply chains
• Efficacy of fuel CI lifecycle verification will depend on well devised
audit plans
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LCFS Verification Responsibilities
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Fuel-Specific Stakeholder Meetings to
Inform Audit Plans
• Providing staff with opportunity to engage with stakeholders to
discuss unique attributes of their fuel’s lifecycle, production
processes, and distribution attributes
• Fuels being evaluated include:
• fossil/renewable natural gas, grid/renewable electricity,
biodiesel and renewable diesel, starch-derived ethanol,
fossil/renewable hydrogen
• Staff has published several discussion papers to inform the fuel-
specific stakeholder meetings https://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm
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Fuel-Specific Verification Audit Plans
• Verification Bodies to develop fuel-specific verification
audit plans based on risk assessment and sampling
procedures
• Staff is developing criteria to provide fuel-specific guidance
for Verifying Bodies
• Biofuel producers to develop monitoring plans that inform
audits points and areas of high risk
• Staff recognizes that existing certification systems can
contain effective audit plans
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ARB Consideration of International
Fuel Certification Systems
• Governance structure to accommodate ARB control
• Compare existing certification system audit points with
developing fuel-specific verification audit plans
• Staff reviewing key best practices among international
certification systems to benchmark material balance
requirements for biofuel production and feedstock supply
chains
• Explore potential to recognize international certifications
within LCFS verification program
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Example of Biodiesel Feedstock
Supply Chain
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Int’l Certifications?
Feedstock Transfer Documents
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Next Steps
• More work needed to complete assessment of international certification systems
• Complete stakeholder fuel-specific meetings and
synthesize conclusions
• Draft staff proposal on detailed fuel-specific
verification audit plan requirements
• Discuss at LCFS public Workshop tentatively
scheduled for March
• Continue stakeholder dialogue
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For More information…
• LCFS Homepage at: https://www.arb.ca.gov/fuels/lcfs/lcfs.htm
• General framework for LCFS verification program described in staff White
Paper published on October 24, 2016 at:
https://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/verification_whitepaper
_102116.pdf
• Materials from previous public workshops at:
https://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm
• Schedule for upcoming meetings and workshops also distributed through
LCFS email Listserve – sign up at:
https://www.arb.ca.gov/listserv/listserv_ind.php?listname=lcfs
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Thank you, any questions?
Jim M. Aguila, Chief
Program Planning and Management Branch
Industrial Strategies Division
(916) 322-8283
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