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ON THE CURVE: With more than 14 million registered vehicles in California, the Golden State has vastly more cars and trucks on its roads than any other state. It also has the strictest fuel standards. Pictured here, a rare reprieve from traffic on scenic Highway 1 near the Big Sur coastline. PHOTO: STOCK
Eleven years ago, California led the way with the implementation of its Low Carbon Fuel Standard, which continues to be a guiding force for clean fuel policy on the West Coast and beyond.
Since it took effect, the structure and scale of the Golden State’s LCFS has shown that state-level market mechanisms for low-carbon transportation fuel are not only feasible, but powerfully effective. Oregon created its own clean fuel standard in 2016 and, according to Graham Noyes, founder and executive director of the Low Carbon Fuels Coalition, is competitive with California’s LCFS credit value. And starting next year, Washington state’s own low carbon fuel standard will kick in—bordering up to both Oregon and British Columbia’s existing low carbon fuels program, creating a contiguous 3,000-mile LCFS zone along the coast. “The vision of a Pacific Coast collaborative, developing climate change policy together, creating a steady coastline of clean fuel standards from Southern California to the northernmost tip of British Columbia, is happen38 | ETHANOL PRODUCER MAGAZINE | AUGUST 2022
ing,” Noyes says. “These designs are gaining a lot of interest in other states, and also internationally with Canada expanding its programs (see news on page 12), Brazil having it’s renewable fuels program Noyes and many other countries looking at [how they’re structured].” The California Air Resources Board, which administers the state’s LCFS, continues to adjust the program for new opportunities to make faster headway toward the state’s carbon reduction targets. Currently, the most efficient grain ethanol receives a modest LCFS bump in California. Carbon capture and sequestration (CCS)—which 50-plus Midwest ethanol plants are currently planning to do—could cut LCFS carbon intensity (CI) scores in half. Beyond that, more double-digit reductions will be tough to find without credit for low-carbon farming practices. California’s LCFS currently gauges each biofuel pathway on the merits of its process technology, energy inputs and generalized feedstock category. Corn is corn, regardless of how it is cultivated.
But even without credit for low-carbon farming practices, California is a favorable market for corn ethanol sales from plants qualified to do it. Ethanol sold into the state has an average CI rating of just over 58, compared to gasoline’s 90-100 CI rating and average corn ethanol hovering around 70. CI ratings are based on grams of CO2 emitted per megajoule of fuel; each credit unit, usually priced between $100 and $200, equal 1 ton of CO2 reduction. The gallons-to-tons conversion is complicated, but the resultant incentive, and the current price of gas in California, makes conventional ethanol attractive, particularly higher blends. In fact, sales of E85 are booming in California, even while the number of flex-fuel vehicles (FFVs) on the road are diminishing due to phased-out manufacturing. Noyes says E85 use in California grew in volume by 50 percent between 2020 to 2021. This increase in demand is due, in part, to greater availability of E85 at the pump, but also the significant difference in price per gallon between E85 and traditional gasoline, sometimes reaching a spread of $2 or more. “We will continue to see growth there and we’re looking for opportunities to get more
