Low Carbon Fuel Standard

Most of LA Metro's bus fleet runs on low carbon intensity compressed natural gas. Souce:The Port of Authority

Introduction

The Low Carbon Fuel Standard (LCFS) is a program by the California Air Resources Board (ARB) to mitigate the greenhouse gas (GHG) effects of transportation fuels. The transportation sector accounts for 40% of GHG emissions and therefore is critical to environmental protection efforts. The LCFS works by evaluating the carbon intensity of fuels and setting up a credit system similar to cap-and-trade. An organization gets credits for fuels with lower carbon intensity than a predetermined standard and deficits for fuels with higher carbon intensity; at the end of the year these number have to match up. Agencies can purchase credits if necessary to make up a deficit. The program started in 2011; carbon intensity reported by producers has fallen at an increasing rate ever since.

Carbon Intensity

Carbon Intensity is a measure of GHG emissions associated with the lifecycle of a fuel, from production to consumption. The carbon intensity of a fuel is measured in grams of carbon dioxide equivalent per megajoule of energy that it provides. Fuels such as biodiesel and compressed natural gas have significantly lower carbon intensity values than traditional diesel.

Implications for Transit Agencies

The LCFS is aimed at producers of fuel, so transit agencies generally do not need to worry about being bound by it and will not be penalized for using high carbon intensity fuels. However, transit agencies can qualify as producers of low-CI fuels such as electricity, hydrogen, and natural gas if they have large fleets running on these cleaner fuels. If an agency opts into the program it can receive credits for these fuels and sell those credits to producers. Prices vary, but credits for some fuels can be worth more than $100 (one credit corresponds to one metric ton of fuel).

Reporting

After opting into the program, agencies provide reports to the ARB on a quarterly and annual basis using a specialized online tool. The reports must contain the amount of fuel dispensed in the reporting period and the number of electric vehicles in the agency’s fleet.