Institute of Transportation Studies
UC Berkeley Transportation
Sustainability Research Center
( University of California, Berkeley)
Year 2007 Paper UCB - ITS - TSRC - RR - 2007 - 2
A Low- Carbon Fuel Standard for
California Part 1: Technical Analysis
This paper is posted at the eScholarship Repository, University of California.
http:// repositories. cdlib. org/ its/ tsrc/ UCB- ITS- TSRC- RR- 2007- 2
Copyright  c 2007 by the authors.
A Low- Carbon Fuel Standard for
California Part 1: Technical Analysis
Abstract
Executive Order S- 1- 07, the Low Carbon Fuel Standard ( LCFS) ( January
18, 2007), calls for a reduction of at least 10 percent in the carbon intensity
of California’s transportation fuels by 2020. It instructed the Secretary of the
California Environmental Protection Agency to coordinate activities between
the University of California, the California Energy Commission ( CEC) and other
state agencies to develop and propose a draft compliance schedule to meet the
2020 Target. This report is the first of two by the University of California in
response. This first study assesses the low- carbon fuels options that might be
used to meet the proposed standard, and presents a number of scenarios for
mixes of fuels that might meet a 5, 10, and 15 percent standard. The second
part of the study, to be released one month later, will examine key policy issues
associated with the LCFS.
A Low- Carbon Fuel Standard for California
Part 1: Technical Analysis
Project Directors: Alexander E. Farrell, UC Berkeley and Daniel
Sperling, UC Davis
Contributors: S. M. Arons, A. R. Brandt, M. A. Delucchi, A. Eggert,
A. E. Farrell, B. K. Haya, J. Hughes, B. M. Jenkins, A. D. Jones, D. M.
Kammen, S. R. Kaffka, C. R. Knittel, D. M. Lemoine, E. W. Martin,
M. W. Melaina, J. M. Ogden, R. J. Plevin, D. Sperling, B. T. Turner, R. B.
Williams, C. Yang
RESEARCH REPORT
UCB- ITS- TSRC- RR- 2007- 2
May 29, 2007
The Transportation Sustainability Research Center fosters research,
education, and outreach so that transportation can serve to improve
economic growth, environmental quality and equity. It is housed at
the UC Berkeley Institute of Transportation Studies.
http:// www. its. berkeley. edu/ sustainabilitycenter/
A Low- Carbon Fuel Standard for California
Part 1: Technical Analysis
May 29, 2007
Project Directors
Alexander E. Farrell, UC Berkeley
www. its. berkeley. edu/ sustainabilitycenter
Daniel Sperling, UC Davis
www. its. ucdavis. edu
Contributors
S. M. Arons, A. R. Brandt, M. A. Delucchi, A. Eggert, A. E. Farrell,
B. K. Haya, J. Hughes, B. M. Jenkins, A. D. Jones, D. M. Kammen,
S. R. Kaffka, C. R. Knittel, D. M. Lemoine, E. W. Martin, M. W. Melaina,
J. M. Ogden, R. J. Plevin, D. Sperling, B. T. Turner, R. B. Williams, C. Yang
A Low Carbon Fuel Standard For California
2
TABLE OF CONTENTS
Executive Summary.......................................................................................................... 8
1 Introduction .............................................................................................................. 17
1.1 Goals................................................................................................................. 18
1.2 Strategies .......................................................................................................... 21
1.3 Why sector- specific strategies for transportation ............................................. 22
1.4 Definitions ........................................................................................................ 24
1.5 Fuel carbon intensity after 2050 ....................................................................... 25
1.6 Structure of this report ...................................................................................... 27
1.7 References ........................................................................................................ 27
2 Methods ..................................................................................................................... 29
2.1 Baseline ............................................................................................................ 29
2.2 Scope of the standard........................................................................................ 29
2.3 Measuring GHG intensity................................................................................. 31
2.4 Scope of the intensity metric ............................................................................ 32
2.5 Baseline AFCI, 2020 target and compliance pathways .................................... 34
2.6 Compliance paths ............................................................................................. 37
2.7 Mid- GHG and low- GHG biofuels .................................................................... 39
2.8 Life cycle assessment ....................................................................................... 39
2.9 Summary of the WTW analysis........................................................................ 44
2.10 Scenario analysis with the VISION model ....................................................... 45
2.11 References ........................................................................................................ 48
3 Fuel Characteristics ................................................................................................. 51
3.1 Fossil hydrocarbon fuels................................................................................... 51
3.2 Biofuels............................................................................................................. 58
3.3 Electricity ......................................................................................................... 68
3.4 Hydrogen .......................................................................................................... 70
3.5 Other environmental issues .............................................................................. 72
3.6 References ........................................................................................................ 72
4 Resources for Low- Carbon Fuels............................................................................ 77
4.1 Biomass resources for low- carbon fuels........................................................... 77
4.2 Natural gas...................................................................................................... 101
4.3 Petroleum and fossil substitutes...................................................................... 102
4.4 Electricity ....................................................................................................... 104
4.5 Hydrogen ........................................................................................................ 107
4.6 References ...................................................................................................... 113
5 Representative scenarios........................................................................................ 117
5.1 Scenario definitions ........................................................................................ 118
5.2 Scenario infrastructure costs........................................................................... 120
5.3 Scenario assumptions ..................................................................................... 123
5.4 Scenario results............................................................................................... 128
5.5 Low- GHG fuels in heavy- duty and off- road applications .............................. 174
5.6 Electrification of off- road diesel fuel applications ......................................... 175
5.7 References ...................................................................................................... 178
A Low Carbon Fuel Standard For California
3
LIST OF TABLES
Table ES- 1: Potential low- carbon fuel supplies ( million gallons of gasoline equivalent per year) .............. 9
Table ES- 2: Scenario results using the VISION- CA model ....................................................................... 11
Table ES- 3: Global Warming Impacts estimated by two LCA models, adjusted for energy at the wheel ( g
CO2 eq / MJ) ............................................................................................................................... ...... 13
Table 1- 1: California transportation fuel GHG emissions in the baseline year, 2004 ............................... 20
Table 1- 2: California’s climate change policies and initiatives .................................................................. 22
Table 1- 3: Effect of a $ 25/ MT CO2e price on energy prices ..................................................................... 23
Table 2- 1: Baseline and 2020 target AFCI values ...................................................................................... 35
Table 2- 2: Possible LCFS compliance schedules ....................................................................................... 38
Table 2- 3: Global warming impacts estimated by two LCA models under various assumptions ( gCO2- e /
MJ) ............................................................................................................................... ..................... 47
Table 3- 1: Fuels considered in this section................................................................................................ 51
Table 3- 2: GHG emissions from fossil- based transportation fuels ............................................................ 54
Table 3- 3: Gross System Power, 2005 ( GWh) .......................................................................................... 68
Table 4- 1: Estimates of current total annual residue biomass in California .............................................. 78
Table 4- 2: California starch and sugar crop yields, acres harvested, and ethanol potentials..................... 84
Table 4- 3: Starch and sugar crop land area requirements for in- state ethanol production goals ( thousand
acres) ............................................................................................................................... .................. 84
Table 4- 4: Oil seed crop requirements to meet in- state production goals for conventional biodiesel
( thousand acres) ............................................................................................................................... . 85
Table 4- 5: California lignocellulosic ethanol potential.............................................................................. 90
Table 4- 6: Characteristics and potential energy of landfilled urban waste in California........................... 95
Table 4- 7: Theoretical ethanol yields of organic MSW components......................................................... 96
Table 4- 8: Estimates of annual ethanol or liquid hydrocarbon potential from lignocellulosic fraction of
California landfill stream ................................................................................................................... 97
Table 4- 9: Estimated capital costs for enzymatic cellulose- ethanol process with on- site boiler and
turbine/ generator ............................................................................................................................... 98
Table 4- 10: PG& E May 2006 residential electricity tariffs and equivalent gasoline prices for PHEVs .106
Table 4- 11: Near term hydrogen supply options for California............................................................... 108
Table 4- 12: Crude oil and hydrogen capacities for California refineries................................................. 109
Table 4- 13: Industrial hydrogen facilities in California........................................................................... 110
Table 4- 14: WESTCARB carbon capture and sequestration projects ..................................................... 112
Table 5- 1: Light duty vehicle scenario names, descriptions and AFCI goals........................................... 119
Table 5- 2: Representative GWI values used in LCFS scenarios .............................................................. 126
Table 5- 3: Acronyms for scenario descriptions ........................................................................................ 126
Table 5- 4: Fuel energy, GHG intensities, AFCI values & GHG emissions for the BAU Scenario.......... 136
Table 5- 5: Sales of new LDVs for the BAU Scenario.............................................................................. 136
Table 5- 6: Fuel energy, GHG intensities, AFCI values and GHG emissions for Scenario C5................. 141
Table 5- 7: Sales of new LDVs for Scenario C5........................................................................................ 141
Table 5- 8: Fuel energy, GHG intensities, AFCI values and GHG emissions for Scenario D5 ................ 145
Table 5- 9: Sales of new LDVs for Scenario D5 ....................................................................................... 145
Table 5- 10: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario D10 ............... 147
Table 5- 11: Sales of new LDVs for Scenario D10 ................................................................................... 147
Table 5- 12: Fuel energy, GHG intensities, AFCI values and GHG emissions for Scenario F5 ............... 151
Table 5- 13: Sales of new LDVs for Scenario F5 ...................................................................................... 151
Table 5- 14: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario F10................ 153
Table 5- 15: Sales of LDVs for Scenario F10............................................................................................ 153
Table 5- 16: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario G5 ................. 159
Table 5- 17: Sales of LDVs for Scenario G5 ............................................................................................. 159
A Low Carbon Fuel Standard For California
4
Table 5- 18: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario G10 ............... 161
Table 5- 19: Sales of LDVs for Scenario G10 ........................................................................................... 161
Table 5- 20: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario G15 ............... 163
Table 5- 21: Sales of new LDVs for Scenario G15 ................................................................................... 163
Table 5- 22: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario H5 ................. 169
Table 5- 23: Sales of new LDVs for Scenario H5 ..................................................................................... 169
Table 5- 24: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario H10 ............... 171
Table 5- 25: Sales of new LDVs for Scenario H10 ................................................................................... 171
Table 5- 26: Fuel energy, GHG intensities, AFCI values & GHG emissions for Scenario H15 ............... 173
Table 5- 27: Sales of new LDVs for Scenario H15 ................................................................................... 173
Table 5- 28: Populations of off- road electric vehicle technologies ........................................................... 176
Table 5- 29: GHG reductions from off- road electric vehicle technologies................................................ 176
Table 5- 30: GHG reductions from off- road electric vehicle technologies................................................ 177
A Low Carbon Fuel Standard For California
5
LIST OF FIGURES
Figure 1- 1: Historical and forecast GHG emissions, and Governor Schwarzenegger’s goals.................... 19
Figure 1- 2: GHG emissions by end- use sector, including electricity generation, 2002............................. 19
Figure 1- 3: Trajectories for light duty vehicle GHG emissions to 2050..................................................... 26
Figure 2- 1: Possible LCFS compliance schedules ...................................................................................... 38
Figure 2- 2: Fuel life cycle analyses ........................................................................................................... 40
Figure 3- 1: Schematic of fossil transportation fuels production................................................................ 53
Figure 3- 2: Production costs and GHG emissions for fossil hydrocarbon fuels........................................ 56
Figure 3- 3: Crude oil and U. S. gasoline prices .......................................................................................... 57
Figure 3- 4: Biofuel production pathways .................................................................................................. 58
Figure 3- 5: Fuel production cost estimates ................................................................................................ 67
Figure 3- 6: Options for hydrogen production ............................................................................................. 70
Figure 3- 7: Delivered H2 costs.................................................................................................................... 72
Figure 4- 1: Total annual residue biomass in California and estimated technically recoverable feedstock
potential...................................................................................................................... ....................... 79
Figure 4- 2: Distribution of biomass resources in California...................................................................... 79
Figure 4- 3: Estimated per- acre ethanol yields for various crop types........................................................ 86
Figure 4- 4: Impact of conversion efficiency on the feedstock cost contribution to cost of energy ( COE)
from biomass ............................................................................................................................... ...... 93
Figure 4- 5: Ethanol production costs from MSW with variable feedstock costs, 70 MGY design basis .. 99
Figure 4- 6: Projected waste disposal ( million tons/ year) and biomethane production ( BCF/ year) from
landfills in California with constant per- capita disposal .................................................................. 100
Figure 4- 7: The quantity of electricity beyond observed demand available at each price, as determined by
the supply bids given to the California Power Exchange in 1999. Also, the number of PHEVs that
would need to charge during the hour to use that much electricity with a charge rate of 1 kWh/ hr ( or
a charger size of 1.2 kW). ................................................................................................................ 107
Figure 5- 1: Share of HEVs as a percent of new LDV sales, historical nationwide values and projections in
the VISION- CA BAU scenario........................................................................................................ 127
Figure 5- 2: Assumed share of VMT in electric drive as a function of PHEV electric range.................... 128
Figure 5- 3: Projected gasoline demand for VISION- CA and the CEC 2005 IEPR.................................. 130
Figure 5- 4: LDV sales per person and total California population to 2020 ( all scenarios) ...................... 132
Figure 5- 5: New LDV sales for passenger cars, light trucks and total LDVs ( all scenarios) ................... 132
Figure 5- 6: Fuel energy consumption in the BAU Scenario..................................................................... 134
Figure 5- 7: Fuel energy consumption in the BAU Scenario ( gasoline not shown) .................................. 134
Figure 5- 8: New LDVs sold per year in the BAU Scenario ..................................................................... 135
Figure 5- 9: New LDVs sold per year in the BAU Scenario ( gasoline ICE LDVs not shown) ................. 135
Figure 5- 10: AFCI reductions for each assumption in Scenario C5 ......................................................... 139
Figure 5- 11: Fuel energy consumption in Scenario C5 ............................................................................ 140
Figure 5- 12: New LDVs sold per year in Scenario C5 ............................................................................. 140
Figure 5- 13: ACFI reductions for each assumption in Scenarios D5 and D10......................................... 143
Figure 5- 14: Fuel energy consumption in Scenario D5 ............................................................................ 144
Figure 5- 15: New LDVs sold per year in Scenario D5............................................................................. 144
Figure 5- 16: Fuel energy consumption in Scenario D10 .......................................................................... 146
Figure 5- 17: New LDVs sold per year in Scenario D10........................................................................... 146
Figure 5- 18: AFCI reductions for each assumption in Scenarios F5 and F10 .......................................... 149
Figure 5- 19: Fuel energy consumed in Scenario F5 ................................................................................. 150
Figure 5- 20: New LDV sales per year in Scenario F5.............................................................................. 150
Figure 5- 21: Fuel energy consumption in Scenario F10........................................................................... 152
Figure 5- 22: New LDVs sold per year in Scenario F10............................................................................ 152
A Low Carbon Fuel Standard For California
6
Figure 5- 23: AFCI reductions for each assumption in Scenarios G5, G10 and G15................................ 156
Figure 5- 24: Fuel energy consumption in Scenario G5 ............................................................................ 158
Figure 5- 25: New LDVs sales per year in Scenario G5............................................................................ 158
Figure 5- 26: Fuel energy consumption in Scenario G10 .......................................................................... 160
Figure 5- 27: New LDVs sold per year in Scenario G10........................................................................... 160
Figure 5- 28: Fuel energy consumption in Scenario G15 .......................................................................... 162
Figure 5- 29: New LDVs sold per year in Scenario G15 ( identical to Scenario G10)............................... 162
Figure 5- 30: AFCI reductions for each assumption in Scenarios H5, H10 and H15................................ 166
Figure 5- 31: Fuel energy consumption in Scenario H5 ............................................................................ 168
Figure 5- 32: New LDVs sold per year in Scenario H5............................................................................. 168
Figure 5- 33: Fuel energy consumption in Scenario H10 .......................................................................... 170
Figure 5- 34: New LDVs sold per year in Scenario H10........................................................................... 170
Figure 5- 35: Fuel energy consumption in Scenario H15 .......................................................................... 172
Figure 5- 36: New LDVs sold per year in Scenario H15........................................................................... 172
A Low Carbon Fuel Standard For California
7
Acknowldegments
This research was supported by the Energy Foundation. The authors would like to thank the staffs of the California
Air Resources Board, the California Energy Commission, the representatives of the many stakeholder organizations
who participated in the study, and Stefan Unnasch. The view and opinions herein, as well as any remaining errors,
are those of the authors alone and do not necessarily represent the views of the sponsor or any other organization or
person.
© Copyright Regents of the University of California
A Low Carbon Fuel Standard For California
8
Executive Summary
Executive Order S- 1- 07, the Low Carbon Fuel Standard ( LCFS) ( January 18, 2007), calls
for a reduction of at least 10 percent in the carbon intensity of California’s transportation fuels by
2020. It instructed the Secretary of the California Environmental Protection Agency to
coordinate activities between the University of California, the California Energy Commission
( CEC) and other state agencies to develop and propose a draft compliance schedule to meet the
2020 Target. This report is the first of two by the University of California in response. This first
study assesses the low- carbon fuels options that might be used to meet the proposed standard,
and presents a number of scenarios for mixes of fuels that might meet a 5, 10, and 15 percent
standard. The second part of the study, to be released one month later, will examine key policy
issues associated with the LCFS.
On the basis of a study of a wide range of vehicle fuel options, we find a 10 percent
reduction in the carbon intensity of transportation fuels by 2020 to be an ambitious but attainable
target. With some vehicle and fuel combinations, a reduction of 15 percent may be possible. All
of the major low carbon fuel options to reduce GHG emissions from the transportation sector
( e. g., biofuel production and electric vehicles) have technical and economic uncertainties that
need further research and evaluation. However, there is a wide variety of options, of which
many show great potential to lower the global warming impact of transportation fuels. Many
research and development efforts are already underway to bring these advanced technologies to
market. The diversity of promising low- carbon fuel and vehicle options leads us to conclude that
the California Air Resources Board should include the LCFS as an early action measure under
AB 32 ( Núñez/ Pavley), the Global Warming Solutions Act.
Under the LCFS, fuel providers would be required to track the global warming intensity
( GWI) of their products, measured on a per- unit- energy basis, and reduce this value over time.
“ Global warming intensity” is a measure of all of the mechanisms that affect global climate
including not only greenhouse gases ( GHGs) but also other processes ( like land use changes that
may result from biofuel production). The term “ life cycle” refers to all of the activities included
in the production, transport, storage and use of the fuel. The unit of measure for GWI used in this
study is grams of carbon dioxide equivalent per megajoule of fuel delivered to the vehicle
( gCO2e/ MJ) adjusted for inherent differences in the in- use energy efficiency of different fuels
( e. g., diesel, electricity and hydrogen). These definitions are important both because they are
direct measurements of the objectives of the policy and because of their scientific clarity, making
a successful policy more likely. For convenience, the term carbon intensity is used to refer to the
total life cycle GWI per unit of delivered fuel energy.
Attaining both the AB 32 ( Núñez/ Pavley) legislative goal for 2020 and the climate
stabilization goal for 2050 will be challenging, requiring significant changes in the transportation
sector to achieve the required emission reductions. The magnitude of the 2050 goal, combined
with the large size and complexity of California’s transportation and energy systems, means that
it is crucial to begin the process of technological innovation immediately and to build markets
for low carbon fuels so that suppliers will have incentives to innovate, as well as to support
research and development for work that is further away from commercialization.
This report addresses only the climate change impacts of fuels, and does not address
other public health and environmental impacts, such as air quality, water use and quality, loss of
habitat, soil erosion, and so forth. Many of these issues will become more important if biofuel
A Low Carbon Fuel Standard For California
9
production and use expand, and they are critical to the long- term viability of all energy
resources. Neither does this study consider energy efficiency, mass transit, city planning, and
other ways to lower fuel consumption. These issues are obviously important and need
consideration as the LCFS is developed. Separate policies to address these issues may also be
needed. This part of the study does not examine these types of policies or how they might
influence the scenarios we examine.
We find it possible to either manufacture a significant amount of low- carbon fuel within
California or to import it from outside the state. Many of the low carbon fuels expected to be
commercially available in large quantities within the 2020 time horizon are biofuels. This is
demonstrated in Table ES- 1, which summarizes some of the analysis in Section 4 on the
potential volumes of low- carbon fuels available for use in California. Like many calculations in
this study, these values are uncertain. California has or could have sufficient feedstocks to
produce over a billion gallons of biofuels per year by 2020 in state, and perhaps even twice that
amount. This amount can be compared to total projected light duty vehicle fuel consumption of
16.5 to 17 billion gallons in 2020, plus about 4 billion gallons of diesel fuel used by heavy duty
vehicles. However, the facilities to produce these fuels do not currently exist, some of the
feedstocks listed in the table are not currently grown commercially, and many of the conversion
processes are not yet commercially viable. Research and development projects are underway to
investigate some of these new crops and new technologies; these efforts will eventually enhance
the quantity and diversity of fuel options available.
Table ES- 1: Potential low- carbon fuel supplies ( million gallons of gasoline equivalent per
year)
In- state feedstocks for biofuel production Potential volume 6
California starch and sugar crops 1 360 to 1,250
California cellulosic agricultural residues 188
California forest thinnings 660
California waste otherwise sent to landfills 2 355 to 366
Cellulosic energy crops on 1.5 million acres in California 3 400 to 900
California corn imports 4 130 to 300
Forecasted 2012 production capacity nationwide 5 Potential volume
Nationwide low- GHG ethanol 288
Nationwide mid- GHG ethanol 776 to 969
Nationwide biodiesel 1,400
Nationwide renewable diesel 175
Notes:
1 Low value is based on 2005 crop, high value based on maximum crops since 1950. Attaining the high value would
require massive shifting of crops in California.
2 Low value is for ethanol, higher value is for Fischer- Tropsch liquids. See Section 4.
3 Range based on low and high yields, see Section 4.
4 These values are preliminary. See Section 4.
5 Forecasts by USEPA. Mid- GHG ethanol and biodiesel values are estimated for fuels currently in commercial
production, but using relatively low carbon intensity methods, such as corn ethanol in modern dry mills with low-carbon
fuels for process energy ( e. g., natural gas as opposed to coal without carbon sequestration) and soy- based
biodiesel. Low- GHG ethanol and renewable diesel values are estimated for fuels currently under development,
such as cellulosic ethanol and Fischer- Tropsch diesel fuel from wood and other biomass. See Sections 2 and 4 for
more complete information.
6 No total is given because not all feedstocks shown will be available simultaneously.
A Low Carbon Fuel Standard For California
10
Large volumes of low- GHG ethanol are anticipated to become available elsewhere in the
United States by 2012, as indicated from US EPA forecasts in Table ES- 1. These EPA forecasts
of potential production are based on facilities that have been selected for funding by the U. S.
Department of Energy or are already in commercial production. Diversion of this fuel production
to California may ( at least initially) not decrease overall greenhouse gas emissions. It may
represent only a rationalization ( or “ shuffling”) of existing production, not a change in the type
of biofuel production nationwide. ( The same phenomenon may occur with low- carbon fuels
imported from other countries.) Such rationalization would lower the carbon intensity of
California transportation fuels, but may increase the carbon intensity of fuels elsewhere in the
United States ( and the world in the case of international imports). However, this is a one- time
phenomenon. Once existing low carbon biofuel production is rationalized so that it goes to
California, further reductions in carbon intensity will require new investment and innovation.
The LCFS will clearly induce technological innovation and investment in new technologies, but
perhaps with some delay. As other states or regions adopt similar measures, the amount of
rationalization that can occur will decline. These issues will be discussed further in Part 2 of this
report.
To evaluate the technical feasibility of the proposed LCFS, we constructed and examined
a dozen light duty vehicle and fuel scenarios, summarized in Table ES- 2. This table indicates the
name of each set of scenarios and the quantities of major low carbon fuels and vehicles
introduced to achieve the specified carbon intensity reduction target, shown as an average fuel
carbon intensity ( AFCI) value. Each scenario is indicated with a letter for the scenario type and
a number for the percent of carbon intensity reduction ( e. g., H15 is in the last set of scenarios,
and achieves a 15 percent carbon intensity reduction). This analysis, discussed in detail in
Section 5, considers population and economic growth, fleet turnover rates, and the effects of AB
1493 ( Pavley). Potential reductions in carbon intensity in heavy duty and off- road applications
were considered separately. Emission reductions due to changes in oil production and refining
are ignored, as is the potential use of offsets from other sectors or from geologic sequestration of
CO2. These simplifying assumptions were made to permit the scenario analysis to be completed
with the time and resources available, and are not policy recommendations. The implications of
these assumptions for public policy will be explored in Part 2 of the study.
Six of these scenarios were designed to meet or exceed a 10 percent carbon intensity
reduction by 2020, including two that attain a 15 percent reduction. These scenarios all contain
plausible combinations of technological innovation and investment in vehicle technologies and
low- carbon fuel production and distribution infrastructure, although opinions may differ
regarding how easy or difficult they will be to achieve.
This analysis suggests that a 5 percent reduction in carbon intensity is feasible with
electric drive vehicles alone ( Scenario C5). Electric drive vehicles comprise a tiny fraction of the
light duty fleet today and significant technological innovation would be needed to gain large
market penetration. Because vehicles last a long time, the fleet turns over relatively slowly,
limiting the potential effect of changes in vehicle technology on near- term reductions in the GWI
of fuels.
A Low Carbon Fuel Standard For California
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Table ES- 2: Scenario results using the VISION- CA model
Volume of fuel sold in 2020 ( billion gallons of gasoline equivalent, BGGE) and thousands of vehicles sold in 2020
Top box for each scenario in the second column lists the fuel consumed in that scenario. The bottom box in the
same scenario lists the vehicle types that must penetrate the market to achieve stated AFCI goals.
Carbon Intensity Reductions ( AFCI)
Scenario
Major Low- Carbon
Fuels and Vehicles - 5% - 10% - 15%
Business as Usual
( A)
For year 2020:
Gasoline: 15.3 BGGE
Diesel: 0.86 BGGE
LDVs sold: 2.32 million
* * *
Hydrogen 0.183 1.1%
Electricity 0.131 0.8%
Plug- in hybrid vehicles 269 11.6%
Fuel cell vehicles 182 7.8%
Electric Drive
( C5)
Battery electric vehicles 40 1.7%
** **
Low- GHG Biofuel 0.608 3.6% 0.946 5.7%
Low- GHG FT Diesel - - 0.471 2.8%
Existing Vehicles and
Advanced Biofuels
( D5, D10) Diesel vehicles BAU BAU 593 25.5%
**
Mid- GHG Biofuel 0.979 5.9% 1.993 12.0%
Electricity 0.118 0.7% 0.118 0.7%
Mid- GHG Biodiesel - - 0.314 1.9%
Plug- in hybrid vehicles 188 8.1% 188 8.1%
Battery electric vehicles 35 1.5% 35 1.5%
Flex- fuel vehicles BAU BAU 915 39.4%
Evolving Biofuels and
Advanced Batteries
( F5, F10)
Diesel vehicles BAU BAU 593 25.5%
**
Mid- GHG Biofuel 1.066 6.3% 1.038 6.2% 1.466 8.7%
Mid- GHG Biodiesel 0.171 1.0% 0.314 1.9% 0.314 1.9%
Low- GHG FT Diesel - - - - 0.471 2.8%
Low- GHG Biofuel - - - - 0.733 4.4%
Sub- zero GHG Biofuel - - - - 0.293 1.7%
Flex- fuel vehicles 805 34.7% 805 34.7% 805 34.7%
Biofuel Intensive
( G5, G10, G15)
Diesel vehicles BAU BAU 593 25.5% 593 25.5%
Low- GHG Biofuel 0.216 1.3% 0.410 2.4% 0.516 3.1%
CNG 0.289 1.7% 0.289 1.7% 0.289 1.7%
Electricity BAU BAU BAU BAU 0.097 0.6%
Hydrogen BAU BAU BAU BAU 0.059 0.4%
Low- GHG FT Diesel - - 0.314 1.9% 0.314 1.9%
Sub- zero GHG Biofuel - - - - 0.645 3.9%
CNG vehicles 107 4.6% 107 4.6% 107 4.6%
Plug- in hybrid vehicles 171 7.4% 171 7.4% 171 7.4%
Flex- fuel vehicles BAU BAU 806 34.7% 806 34.7%
Diesel vehicles BAU BAU 593 25.5% 593 25.5%
Battery electric vehicles BAU BAU BAU BAU 12 0.5%
Multiple Fuels &
Vehicles
( H5, H10, H15)
Fuel cell vehicles BAU BAU BAU BAU 45 1.9%
Notes: Percent values are percent of total fuel energy or total LDVs sold per year. BAU implies no new change
from the Business as Usual scenario. Results are based on GREET 1.7 beta GWI values similar to those in Table
ES- 1 ( Wang 2006 for DOE; Unnasch 2007 for CEC).
A Low Carbon Fuel Standard For California
12
Changes in fuel type and composition can happen more quickly. Thus we include
multiple scenarios that attain the 10 percent carbon intensity reduction target by 2020, and most
of the reductions are due to fuel technology innovations. For instance, if low- GHG biofuels are
commercialized as in Scenario D10, there may be no need for any change in vehicles in
California and only modest changes to fuel delivery infrastructure. In this scenario, 1.4 billion
gallons gasoline equivalents ( BGGE) of “ low- GHG” fuels ( made from cellulosic feedstocks or
from residues and wastes) will be needed by 2020, a volume that seems feasible based on the
information in Table ES- 1.
Even if no technological innovation in biofuel production occurs, it may be that biofuels
could still be used to lower carbon intensity by up to 10 percent by 2020 ( Scenario G10),
although such a strategy has considerable uncertainty associated with it. Up to 1.3 BGGE of
“ mid- GHG” biofuels may be needed, or an approximate doubling of current consumption. More
analysis is needed, however, to determine how such an expansion of biofuel production could be
accomplished in an environmentally acceptable manner.
Scenarios F10, H10, and H15 assume technological innovation occurs broadly in vehicles
and transportation fuels, and show that a mixture of low- carbon fuels can attain up to 15 percent
emission reductions. In this case, innovation in biofuel production can help avoid the
environmental uncertainty by switching away from crop- based biofuels. Nearly 2.0 BGGE of
low- GHG fuels would be required to meet the 15 percent goal in scenario H15, a value that
seems feasible by 2020 if advances in vehicle and biomass conversion and other fuel
technologies become commercialized and expand in the next 5 years or so.
In addition to these reductions in carbon intensity in the light duty fleet, vehicles that use
diesel fuel today ( heavy duty on- road vehicles and a wide variety of off- road applications like
forklifts and construction equipment) might use low- carbon fuels. Three strategies seem feasible,
low- GHG diesel fuels, natural gas, and electrification. Assuming low- GHG diesel fuels are
commercialized, they could be blended with regular diesel fuel up to 10% if they are biodiesel
( FAME) or at higher levels if they are renewable diesel. However, large volumes of these fuels
would be needed to meet the 10 percent target by 2020. For some applications, such as fork lifts,
electrification is a second strategy. Based on work conducted for the electric power industry,
significant carbon intensity reductions could be achieved this way, possibly the equivalent of 1 to
2 percentage point reductions in the overall state average carbon intensity of diesel fuels.
There is considerable uncertainty associated with this analysis, and thus improvements in
the data and tools used to measure GWI are an important part of successful implementation of
the LCFS. Life cycle assessment ( LCA) is used to measure the carbon intensity ( and other
impacts more generally) of transportation fuels, but there is no widely- agreed upon LCA
methodology for measuring all of the important global warming impacts of transportation fuels.
In some cases, data about important effects are missing or uncertain ( e. g., carbon dioxide
emissions due to land use conversion from natural systems to agriculture, and nitrous oxide
emissions due to growing soybeans and other energy crops). However, life cycle assessment of
vehicle fuels is a complex and evolving field of study, and there remain uncertainties and in key
data and input assumptions. Table ES- 3 contains GWI estimates for several possible
transportation fuels using two models, GREET ( Wang 2006 as modified for application in
California for a study under AB1007 the CEC) and an unpublished version of LEM ( Delucchi
2003). Neither LEM nor the California version of GREET have undergone rigorous peer review
and their results are not directly comparable due to structural differences. These differences
A Low Carbon Fuel Standard For California
13
illustrate the range of results possible using different reasonable approaches to analyzing the
GWI of fuels.
Table ES- 3: Global Warming Impacts estimated by two LCA models, adjusted for energy
at the wheel ( g CO2 eq / MJ)
Fuel Fuel production pathway GREET LEM ( CEF)
CA RFG Marginal gallon produced in CA 92 85
Diesel Ultra- low- sulfur diesel produced in CA 71 73
Propane From petroleum 77 67
CNG From North American natural gas ( in spark ignition engines) 79 81
BTL Fischer- Tropsch diesel from California biomass ( poplar trees) - 3 –
CTL Fischer- Tropsch diesel from coal 167 –
Biodiesel FAME biodiesel from Midwest soybeans 30 224
Ethanol Midwest corn ethanol from a coal- fired dry- mill 114 –
Ethanol Midwest corn ethanol from a natural gas- fired dry- mill 70 97
Ethanol Midwest corn ethanol using stover as fuel in a dry- mill 47 –
Ethanol California corn from a gas- fired dry- mill, wetcake coproduct 52 –
Ethanol Cellulosic ethanol from California poplar trees - 12 –
Ethanol Cellulosic ethanol from Midwest prairie grass 7 –
Ethanol Cellulosic ethanol from municipal solid waste 5 –
Electricity CA average electricity 27 –
Electricity Natural gas combined cycle and renewable generation 21 34
Hydrogen Hydrogen from biomass, delivered by pipeline 22 –
Hydrogen Hydrogen from steam- reformation of onsite natural gas 48 26
Sources: Unnasch et al ( 2007) for CEC and unpublished analysis based on Delucchi ( 2003). See Section 2.3
Notes: Net GWI using the GREET and LEM models are not strictly comparable due to differences in boundaries
considered and other factors described in Section 2.4. “ CA RFG” is California reformulated gasoline. “ CNG” is
compressed natural gas. “ BTL” is biomass- to- liquids. “ CTL” is coal- to- liquids. “ FAME” is fatty acid methyl ester.
“ Stover” is an agricultural residue that can be used in limited quantities as an energy feedstock. “ Wetcake” is a form
of corn ethanol co- product that requires little energy to produce because it is not dried although care is needed to
avoid additional air pollution emissions in handling. Not all of the fuel production pathways shown are
commercialized and not all fuel production pathways are shown.
The GREET model is probably the best publicly available LCA model for fuel analysis,
but its shortcomings in the handling of land use changes are well recognized ( US EPA 2007).
LEM is more comprehensive, including more extensive and detailed treatment of land use-related
effects, though some of the analysis is fairly speculative. It tends to produce lower GWI
values for gasoline and higher GWI values for alternatives than the GREET model, especially for
soy- based biodiesel and corn- based ethanol. Advanced biofuels that use residues and wastes
have not yet been evaluated with LEM. Because residue- and waste- based biofuels do not cause
significant changes in land use, GREET and LEM results may be closer for these fuels.
As more research occurs and consensus develops around the correct approach to treating
land- use change ( and other climate- related and market- mediated effects) significantly different
outcomes for biofuels may occur. If the broader approach embodied in LEM proves to be more
representative of actual climate- related effects than the narrower framework used by GREET,
A Low Carbon Fuel Standard For California
14
most biofuels made from row crops may have little or no benefit in reducing the carbon intensity
of transportation fuels, and may actually increase emissions relative to gasoline. This study uses
a modified version of the GREET model, produced by TIAX for the CEC under AB 1007, since
this is the current basis for alternative fuel analysis by both the CEC and ARB and because it is
publicly available and therefore provides a level of transparency ( Unnasch et al. 2007).
These uncertainties do not prevent the implementation of an LCFS, but do necessitate a
careful approach to regulation and to compliance and they should be addressed by a significant,
robust, and continuing research effort. Because the greatest uncertainties are associated with the
expansion of biofuel production from crops and the attendant land use changes, strategies that
increase land requirements may have the least certain GWI reductions. Strategies less sensitive to
these GWI reduction uncertainties are those that reduce fossil fuel inputs and other sources of
GHG emissions in biofuel production ( e. g., by better management of fertilizers or using biomass
energy for processing), and those that focus on biofuels made from residues and wastes.
Strategies that do not use biomass as an energy source ( e. g., wind- generated electricity) probably
have the least uncertainties in measuring GWI.
Further, LCA may not be the best tool to measure some relevant phenomena ( e. g.,
changes in energy and agricultural markets resulting from biofuel production). Therefore,
improving the data and methods needed to measure the GWI of fuels is an important research
priority for the successful implementation of the LCFS. A good place to start would be to
conduct transparent, side- by- side comparisons of all relevant analyses to understand where they
differ in structure, data, assumptions, and so forth ( e. g., see Farrell et al. 2006). Such
comparisons will also be important to the design of sustainability standards to be used in
assessing commercial production practices and fuel products.
Using data from public sources, the average fuel carbon intensity ( AFCI) value for the
baseline year and the 2020 target AFCI can be calculated. For simplicity, and to match the
scenario analysis presented in Section 5, we assume that the LCFS will cover all transportation-related
gasoline and diesel fuel, but not LPG, jet fuel, residual oil, or lubricants. We calculate
this value to be 87.9 gCO2e/ MJ which implies that the 2020 target of a 10% reduction is 79.1
gCO2e/ MJ. The ARB and CEC may need to update these estimates with more recent or more
California- specific data.
Having established a baseline value for GHG content, one must specify target levels for
successive years leading up to 2020, which together make up the compliance pathway referred to
in the Executive Order. Two key issues are important here: rationalization and the overall shape
of the curve.
Figure ES- 1 illustrates some possible compliance pathways ( see section 2.5 for more
detail). The “ Rationalized” curve reflects a future in which biofuel purchases are rearranged in
such a way that existing low- carbon fuels are redirected to California initially, and high- carbon
fuels are redirected away from California. This rationalization ( or shuffling) may not have any
effect on net GHG emissions to the atmosphere, at least initially. Such cost- minimizing behavior
is unavoidable, though. Indeed, it is actually desirable because it quickly sends the appropriate
signal to fuel markets that more innovation and investment in new technologies will be needed.
The “ Two- Stage” compliance curves in Figure ES- 1 allow the slowest tightening of the
standard in the initial years. They are premised on the belief that industry will need more time to
A Low Carbon Fuel Standard For California
15
develop low- carbon fuel technologies and invest in new infrastructure, and that more time should
be allowed so that industry does not “ lock- in” technologies with small or modest GHG benefits.
Figure ES- 1: Possible LCFS compliance pathways
Taking all of the factors discussed above into consideration, we lean toward a compliance
path with more aggressive reductions in the early years – something similar to the “ Rationalized”
curve in Figure ES- 1.. Such a compliance path would account for the large amount of initial
shuffling, and would simply ratchet the compliance requirement down disproportionately in the
first year. In the next few years, emission reductions would be much smaller ( about – 0.7% per
year). The ARB and CEC may want to examine the potential for rationalization further before
determining a compliance schedule.
In summary, a 10 percent Low Carbon Fuel Standard target seems plausible, though it
requires innovation in fuel and/ or vehicle technologies. Because innovation in the transportation
sector is necessary to achieve long- term climate stabilization in any case, the fact that the LCFS
will stimulate innovation in the near term is an advantage, not a problem. A 15 percent LCFS
target may be possible if some of the low- carbon fuel technologies currently being developed are
successful and the regulations are flexible enough to allow fuel suppliers and consumers to take
advantage of them. Uncertainties exist in the measurement of the global warming intensity of
transportation fuels, necessitating a careful approach to regulation and a robust research effort.
Other environmental effects and other approaches to reducing global warming are also important
and deserve study. The Air Resources Board should include the LCFS as an early action measure
under AB 32 ( Núñez/ Pavley), the Global Warming Solutions Act.
References
Delucchi, M. A. 2003. A Lifecycle Emissions Model ( LEM): Lifecycle Emissions from
Transportation Fuels, Motor Vehicles, Transportation Modes, Electricity Use, Heating and
Cooking Fuels, and Materials: University of California, Davis.
75
78
81
84
87
90
2005 2010 2015 2020
AFCI ( gCO2e/ MJ)
Slow 2- stage
Late 2- stage
Linear
Rationalized
A Low Carbon Fuel Standard For California
16
Farrell, A. E., R. J. Plevin, B. T. Turner, A. D. Jones, M. O'Hare, and D. M. Kammen. 2006.
Ethanol can contribute to energy and environmental goals. Science 311 ( 5760): 506- 508.
Unnasch, S., J. Pont, M. Chan, and L. Waterland. 2007. Full Fuel Cycle Assessment Well To
Wheels Energy Inputs, Emissions, And Water Impacts. Sacramento: California Energy
Commission.
US EPA. 2007. Regulatory Impact Analysis: Renewable Fuel Standard Program. Washington,
DC: Assessment and Standards Division, Office of Transportation and Air Quality, U. S.
Environmental Protection Agency.
Wang, M. Q. GREET 1.7 ( beta) Spreadsheet Model. Center for Transportation Research, Energy
Systems Division, Argonne National Laboratory, January 2006 .
A Low Carbon Fuel Standard For California
17
1 Introduction
Rising concentrations of greenhouse gases ( GHGs) in the atmosphere have already caused
perceptible changes in climate and will lead to further climate change in the future
( Intergovernmental Panel on Climate Change 2007; Intergovernmental Panel on Climate Change
2001). The impact of climate change on California’s water resources, agriculture, and sensitive
coastal and forest ecosystems may be particularly significant ( Roos 2003; Shaw for CEC 2002;
Hayhoe et al. 2004). In turn, these impacts could have serious repercussions for the economy and
public health, and for California’s agricultural and recreation industries.
On June 1, 2005, recognizing and responding to dangers posed to California by climate change,
Governor Schwarzenegger signed Executive Order # S- 3- 05 ( Schwarzenegger 2005). The
Executive Order established the following GHG emission reduction targets for California:
! " by 2010, reduce GHG emissions to 2000 levels;
! " by 2020, reduce GHG emissions to 1990 levels; and,
! " by 2050, reduce GHG emissions to 80 percent below 1990 levels.
Climate scientists agree that avoiding significant risks of dangerous climate change will require
stabilizing GHG emissions at levels far below today’s emissions rate ( Wagner and Sathaye 2006;
Schafer 2000; Wigley, Richels, and Edmonds 1996). Governor Schwarzenegger’s ambitious
2050 target for California is the sort of climate stabilization target needed to accomplish this
task. Future research may show that more or less ambitious efforts are needed, but the 2050
climate stabilization target in Executive Order S- 3- 05 sets the framework for an appropriate
public policy response to the risks posed by climate change.
The California Legislature passed AB 32 ( Núñez/ Pavley) the Global Warming Solutions Act on
August 31, 2006 ( AB 32: California Global Warming Solutions Act of 2006 2006). This law
enacted the 2020 goals, which require a reduction of approximately 25% below “ business as
usual” projections. It also charged the California Air Resources Board ( ARB) with adopting
regulations to control GHG emissions, starting no later than 2012. In addition, AB 32
( Núñez/ Pavley) authorizes CARB to identify “ discrete early action measures” that can be put
into place by 2010. All rules and regulations must achieve maximum feasible and cost- effective
GHG emission reductions. These goals are set in a long- term context of innovative energy and
environmental analysis and policy in California ( Bakker, Buckingham et al. 2003; Jones, Smith
et al. 2005)
Governor Schwarzenegger issued a subsequent executive order ( S- 1- 07) for the Low Carbon
Fuel Standard ( LCFS) on January 18, 2007, setting a statewide goal to reduce the carbon
intensity of California’s transportation fuels at least 10 percent by 2020, and ordering CARB to
determine if the LCFS could be adopted as a discrete early action ( Schwarzenegger 2007). Under
the LCFS, fuel providers would be required to measure the impact of their products on global
warming on a per- unit basis and reduce this impact. A unit of measure for this task might be
pounds of carbon dioxide ( CO2) per gallon, or grams of CO2 equivalent ( to account for other
effects besides CO2) per megajoule ( an energy unit). As discussed in this report, choosing an
appropriate and manageable metric is a challenging task, but a feasible one ( Bauen, Howes, and
Franzosi 2006; Turner et al. 2007).
A Low Carbon Fuel Standard For California
18
Reducing the carbon intensity of transportation fuels is a key element within a set of strategies to
reduce total greenhouse gas emissions. Note that the quantity of greenhouse gases emitted from
vehicles is equal to the carbon intensity of the fuel multiplied by the amount of fuel consumed;
which depends, in turn, on the characteristics of vehicles and how much those vehicles are used.
The first step in meeting this goal was for the University of California to work with various state
agencies to study the LCFS. Key among the state agencies are CARB; the California Energy
Commission ( CEC), which is supervising the development of the State Alternative Fuels Plan
per AB 1007; and the California Public Utility Commission, which is implementing a GHG
emissions cap in the electric power sector.
Preventing the negative effects of climate change will require global action. California’s
emissions are only a small share of the global total, though they are as large as all but a handful
of entire nations. California is taking leadership in pursuing new policies and new technologies
to mitigate climate change, including the LCFS. The intention is to provide an inspiration and
model for the rest of the US and, in the case of the low carbon fuel standard, the rest of the
world. The California LCFS is being designed to be consistent with fuel standards developed
elsewhere and to serve as a model for those other efforts.
This report is the first of two parts of the study called for by Governor Schwarzenegger’s
Executive Order S- 01- 07. It evaluates multiple compliance pathways for an LCFS by developing
a variety of potential future scenarios. The second part of the study will evaluate key policy
issues associated with implementing the LCFS.
1.1 Goals
Figure 1- 1 indicates the extent of the challenge. It presents recent trends in California’s GHG
emissions, a baseline forecast for 2010 and 2020, and the goals established by the Governor and
Legislature. The 2020 and 2050 goals are similar to those adopted elsewhere, including
internationally. They are roughly compatible with future emission pathways that are considered
by climate scientists necessary to avoid dangerous climate change while still allowing for global
economic growth and development ( Wigley, Richels, and Edmonds 1996; Hayhoe et al. 2004;
Baer et al. 2000; Intergovernmental Panel on Climate Change 2007).
Transportation currently accounts for over 40% of California’s GHG emissions, the vast majority
from motor vehicles ( Bemis and Allen for CEC 2005 Figure 2 and Table A- 4). Figure 1- 2
compares the GHG emissions in California and the United States by end- use sector, including
electricity generation as an end- use. Because transportation is such a large part of California’s
GHG emissions, significant changes in the transportation sector can help to meet the 2020 GHG
reduciton goal, and will be essential in meeting the 2050 climate stabilization goal.
The largest proportion of GHG emissions from the transportation sector are associated with
gasoline, as shown in Table 1- 1 ( Bemis for CEC 2006). In 2004, gasoline accounted for 70% of
total GHG emissions from the transport sector. Gasoline is almost entirely consumed in light
duty vehicles. Diesel fuel, mostly used in trucks but also some off- road construction and
A Low Carbon Fuel Standard For California
19
agricultural equipment, accounts for another 17%. In this study we consider the use of these two
fuels by light duty vehicles, ignoring other fuel uses due to limits of time and analytical
resources ( specifically, the VISION model used in Section 5).
Figure 1- 1: Historical and forecast GHG emissions, and Governor Schwarzenegger’s goals
Source: Bemis and Allen, California Energy Commission ( 2005)
Figure 1- 2: GHG emissions by end- use sector, including electricity generation, 2002
Source: U. S. data from U. S. Environmental Protection Agency ( 2005); California data from Bemis and Allen,
California Energy Commission ( 2005)
California GHG Emissions ( MMTCO2E/ yr)
0
100
200
300
400
500
600
1990 2000 2010 2020 2030 2040 2050
Historical with electricity imports
Historical, no electricity imports
Forecast baseline emissions
Goals ( with imports)
40%
20%
32%
41%
16%
28%
7% 5%
4% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
U. S. California
Other
Commercial
Residential
Industrial
Transportation
Electric power
A Low Carbon Fuel Standard For California
20
Table 1- 1: California transportation fuel GHG emissions in the baseline year, 2004
Fuel Emissions
( MMTCO2e)
Percent of total Included in this study?
LPG 0.19 0.10% No
Motor gasoline 131.92 70% Yes. Scenarios in Section 5
Jet fuel 22.24 12% No
Diesel 32.16 17% Yes. Separate analysis in Section 5
Residual oil 0.61 0.33% No
Lubricants 0.75 0.40% No
TOTAL 187
Source: CEC- 600- 2006- 013- SF Table A- 4 pg. 64. Motor gasoline includes ethanol.
Achieving the 2020 and 2050 goals will not be easy. A central element will be technological
innovation, the process of inventing new products, bringing them to market, and enabling them
to become widely used ( Taylor, Rubin, and Nemet 2006). The 2020 target requires a reversal of
historical trends, while the 2050 climate stabilization target calls for a profound change in energy
supply and other parts of the economy. Because the 2020 goal is only slightly more than a
decade away, and because energy technologies tend to be large, complex, and slow to change,
California will need to rely not only on mature technologies that are already in the market but are
under- used, but also technologies that can be commercialized within the next several years,
along with a variety of non- technological solutions.
The more distant but far more ambitious 2050 climate stabilization goal requires a very different
approach. The products ( such as cars and fuels) needed to achieve the 2050 goal are not available
today, so technological innovation is needed to get them. Attaining the 2050 climate stabilization
goal therefore requires major innovations and investments in new technologies, as well as
changes in behavior. Government action is appropriate and necessary to bring these changes
about because climate change is a market externality and, like most environmental protection, a
public good. Without government intervention, markets ignore externalities and provide less of
public goods than socially and economically optimal. In addition, innovation designed to achieve
public goods also requires government action ( Arrow et al. 1995; Norberg- Bohm 1999)
Meeting the state’s GHG emission reduction goals will affect many other key priorities,
including economic growth, improved air quality, affordable energy prices, environmental
justice, energy source diversification, environmental protection and others. These related goals
are explicitly identified by AB 32 and Executive Orders S- 3- 05 and S- 01- 07. The California Air
Resources Board ( CARB) is directed to maximize their achievement within climate policies.
While the LCFS addresses only the GHG intensity of fuels, it is part of the State’s larger efforts
to reduce total GHG emissions. Thus, the LCFS must be considered in the context of changes in
vehicle technology and usage.
The design of the Low Carbon Fuel Standard ( LCFS) should therefore respond to the following
goals :
1. Encourage investment and improvement in current and near- term technologies that will
help meet the 2020 goal,
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21
2. Stimulate innovation and development of new technologies that can dramatically lower
GHG emissions at low costs and can start to be deployed by 2020 or soon thereafter,
creating the conditions for meeting the later 2050 goal,
3. Contribute to attainment of related objectives as much as possible, including economic
growth, air quality and other environmental protection goals, affordable energy prices,
environmental justice, and diverse and reliable energy sources.
1.2 Strategies
The LCFS fits into a larger set of strategies being undertaken in California to reduce GHGs. It is
necessary to understand this context in order to evaluate the LCFS. California’s overall approach
includes a research portfolio and sector- specific policies such as those listed in Table 1- 2 below,
and eventually will likely include multi- sectoral policies such as cap and trade and perhaps even
carbon taxes. The research portfolio includes work supported by CARB and by CEC’s Public
Interest Energy Research ( PIER) program ( Franco et al. for CEC 2003). Sector- specific policies
have been identified for electricity, manufacturing, transportation, and other activities ( Climate
Action Team 2006). Some of these are regulatory, such as energy efficiency standards for
buildings and appliances; others may be market- based.
As indicated in Table 1- 2, three broad strategies may be used to reduce GHG emissions from the
transportation sector: vehicle technology, fuel- related GHG emissions, and amount of usage of
vehicles and fuels. All three strategies will likely be necessary to achieve the state’s 2020 goals,
and almost definitely to achieve the 2050 goals.
The first set of strategies was addressed when California enacted AB 1493 ( Pavley) in 2002.
That law resulted in vehicle performance standards that require a 30 percent reduction in
emissions from new light duty vehicles by 2016. The AB 1493 regulations are currently being
contested in the courts by the automotive industry. Heavy duty vehicles have not yet been
addressed.
This report addresses the second strategy, reduction of emissions from fuels. The LCFS, like the
AB 1493 vehicle law, is a performance standard. It calls for a reduction in emissions per unit of
fuel sold in the state. This report examines the different fuels that might be used to meet the
standard. A subsequent Part 2 report elaborates upon the design of the LCFS.
The third strategy to reduce GHG emissions from transportation relates to usage, which
addresses how much travel and goods movement are demanded, and how they are provided.
Usage- related strategies include switching to lower- carbon modes of travel, managing land use
to reduce the demand for travel, using less carbon- intense transport infrastructure, and providing
new and better transportation services that would reduce demand for carbon- intense travel. Some
examples of the latter include greater use of telecommunications, neighborhood vehicles, smart
growth, car- sharing, smart paratransit services, and much more. This third set of strategies is part
of California’s Climate Action Plan ( Climate Action Team 2006) and will be addressed in future
deliberations.
A Low Carbon Fuel Standard For California
22
Table 1- 2: California’s climate change policies and initiatives
Overall goals
Executive Order S- 3- 05 ( 2005)
Global Warming Solutions Act 2006 ( AB 32 Núñez/ Pavley)
Energy Action Plan ( CEC and CPUC)
Bioenergy Action Plan ( CARB, CEC, CPUC, and other agencies)
Energy research portfolio
California Air Resources Board Research Division
California Energy Commission Public Interest Energy Research program
Buildings and appliances
Energy efficiency standards ( e. g., Title 24)
Electricity and other large sources
Carbon Adder ( CPUC)
Renewable portfolio standard for electricity ( SB 107)
GHG performance standard ( CPUC and SB1368)
GHG emissions cap ( CPUC)
Energy efficiency targets for utility companies ( AB 2021)
Transportation
Vehicle GHG performance standard ( AB 1493, CARB)
Low Carbon Fuel Standard ( Executive Order S- 1- 07, CARB, CEC, and others)*
Alternative Fuels Plan ( AB 1007, CEC)
Reduce vehicle usage
Other policies
* Only this policy is included in this report, even though a combined strategy that addresses vehicle performance
and vehicle usage is needed to meet the climate stabilization targets.
It may be worth noting that other jurisdictions that are actively attempting to reduce GHG
emissions and counteract global warming are adopting or considering similar sectoral strategies.
In Europe, for instance, the multi- sectoral cap and trade system for large stationary sources is
combined with sector- specific high taxes on transportation fuels, new and stringent fuel economy
standards for vehicles, and requirements in some countries to use biofuels. One example is the
United Kingdom’s Renewable Transportation Fuel Obligation, which will require regulated
companies to measure the global warming impact of their fuels. In addition, the European
Commission has proposed to issue a low carbon fuel standard.
1.3 Why sector- specific strategies for transportation
The sectoral approach is important in part because it may better achieve all three goals of the
LCFS ( reduce emissions, encourage technological innovation, and promote related objectives)
than would an economy- wide approach that addresses all emissions with a single policy, such as
a cap- and- trade system. Some argue that transportation should be treated together with other
sectors in these economy- wide approaches. According to economic principles, such economy-wide
approaches are more efficient than narrower sectoral approaches at reducing emissions. But
there are a wide variety of reasons why this would not be true in practice, and especially with
respect to the transport sector. We believe the unique aspects of the transportation sector call for
a unique approach, including the proposed LCFS.
A Low Carbon Fuel Standard For California
23
The problem is, first, that multi- sectoral strategies that impose uniform carbon- based costs ( such
as carbon taxes) will have much less effect on GHG reductions in transportation than in other
sectors. Such a strategy is likely to fail to induce sufficient technological innovation. Second,
encompassing strategies such as a cap and trade program are not well suited to transportation.
Transportation activities are very diffuse, and both fuel supply and fuel use is relatively
insensitive to fuel price increases.
Compare, for instance, the electricity and transportation sectors. In electricity generation,
multiple energy sources with very different GHG emissions compete. Some have very low
emissions, such as renewable and nuclear power, while coal has very high emissions. Natural gas
is intermediate. Thus, even relatively minor increases in cost can begin to affect the electric
power sector in a profound way. A charge of $ 25 per metric ton of CO2, for instance, would have
only a minor effect on the cost of nuclear and renewable power. But the same charge on coal-fired
electricity would have a significant effect on its cost, increasing the retail price about 17
percent, as indicated in Table 1- 3. That $ 25 charge might make carbon capture and storage
( CCS) economically attractive for many coal- fired power plants ( Katzer 2007). Because of these
cost and GHG differences among different electricity supply options, CO2 prices over $ 25 per
tonne- CO2 would induce an enormous amount of innovation and new investment in electricity
supply. It would accelerate decarbonization of the electricity sector, and create the conditions for
deep GHG reductions within that sector. However, this innovation and investment would not
necessarily spread to the rest of the economy.
Table 1- 3: Effect of a $ 25/ tonne CO2e price on energy prices
Energy type Price change and
percentages of retail prices
Electricity
Nuclear and renewables <$ 0.1/ MWh < 1%
Integrated coal gasification combined cycle with carbon capture and storage $ 02.5/ MWh 2%
Natural gas combined cycle $ 12.5/ MWh 11%
Pulverized coal $ 20/ MWh 17%
Transportation
Gasoline $ 0.21/ gallon 8%
Heating
Natural gas $ 1.27/ million Btu 11%
Notes: Percentages are for retail prices in California including PG& E residential electricity $ 0.1144/ kWh, gasoline
$ 2.50/ gallon, and PG& E residential gas $ 1.14/ therm. Electricity values calculated from ( Pacca and Horvath 2002).
Gasoline and Natural Gas values calculated from the Energy Information Agency’s emission coefficients. See
http:// www. eia. doe. gov/ oiaf/ 1605/ coefficients. html
In contrast, a $ 25 carbon charge would not generate a strong enough signal in the transportation
sector, either to produce fuel switching or reductions in demand. Transportation does not have
such low- GHG substitutes readily available. Almost all road vehicles are powered by petroleum-based
fuels. Petroleum is firmly entrenched. In addition, petroleum has much less carbon per unit
of energy than coal. A charge of $ 25 per tonne of CO2 would therefore induce very little
technological innovation in the transportation sector. As indicated in Table 1- 3, such a cost
translates to about an 8 percent increase in the price of gasoline. This price increase would at
most attract a small amount of low- GHG biofuels, such as ethanol from Brazil.
A Low Carbon Fuel Standard For California
24
The price signal associated with a $ 25 per tonne of CO2 would also be too small to induce
significant reductions in transportation demand, either for passengers or freight. Consumers
appear to be very insensitive to changes in gasoline prices, at least in the short term, with price
elasticity of demand of less than - 0.1 ( i. e., an increase in price of 10 percent would reduce
consumption by less than 1 percent) ( Hughes, Knittel, and Sperling 2006). And on the freight
side, transportation costs are a small fraction of the cost of goods sold, so price increases of this
size are unlikely to reduce consumer demand for goods. The experience with high fuel prices in
Europe provides further evidence that 10%- 20% increases in the cost of fuel would spur little
innovation in the transportation sector. Europe’s much higher fuel prices have led to the use of
smaller and more efficient vehicles ( including many diesel cars), but not the introduction of
alternative fuels, low carbon or otherwise.
Another complicating factor is that transportation fuels involve severe coordination and
investment problems between infrastructure and vehicles ( Winebrake and Farrell 1997). Both
experience and analysis suggest that transitions to new fuels are slow and difficult, in part
because of the cost and difficulty of changing energy distribution infrastructure ( McNutt and
Rodgers 2004; Leiby and Rubin 2004). This effect partly explains why ethanol in the US and
biodiesel in Europe have been more successful than other alternative fuels; both can be blended
in gasoline ( or diesel) and at low blends require no changes in vehicles or distribution
infrastructure. Plug- in hybrid vehicles also require little in the way of new infrastructure, but are
more difficult because new vehicle technologies are needed ( e. g., less costly batteries and power
electronics). Hydrogen is even more difficult because it requires both a new fuel distribution
system and new vehicle technologies. Therefore, low- carbon fuels that leverage existing capital
resources will tend to have a strong advantage, all else equal. Additional measures will likely be
needed, beyond the LCFS, to reduce infrastructure and other barriers for promising low- carbon
fuels.
1.4 Definitions
To develop the LCFS, we use the following metrics. First, the word “ carbon” in the LCFS name,
as generally used in this report, is shorthand for life cycle global warming impact. The term “ life
cycle” refers to all the activities of production and use of the fuel, including what happens at the
farm ( in the case of biofuels) and the refinery. The term “ global warming impact” means all of
the mechanisms that affect global climate including not only greenhouse gases, but also changes
in water cycling, land cover and other effects that increase the radiative forcing of the
atmosphere, most of which are associated only with biofuels because of their impact on land use.
Throughout this report and in all public presentations of the LCFS, the fuels are analyzed and
measured in terms of life cycle global warming impact. We will show that there is significant
uncertainty in some of these effects, and even in how they are measured. Second, to compare
different fuels and mixes of fuels to determine their net effect on the overall pool of transport
fuels, we use the term “ average fuel carbon intensity” ( AFCI). Technically, the AFCI is defined
as grams of CO2- equivalent per megajoule of fuel, adjusted for the greater efficiency of vehicle
drivetrains associated with particular fuels ( e. g., electricity and hydrogen), and adjusted to
include the global warming effects of non- CO2 gases and other effects. ( These units and
adjustments are explained in more detail in Section 2.4.) The AFCI can be interpreted as an
A Low Carbon Fuel Standard For California
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index of average GHG emissions associated with the use of transportation fuels. An LCFS target
of 10% reduction is equivalent to saying the AFCI is reduced by 10%.
In 2005, we calculate the AFCI for the pool of gasoline fuels in California to be 92.0 gCO2e/ MJ.
( The calculation of this value is explained in Section 2.4) The gasoline in this calculation
includes 5.7% ethanol, and an average value for Midwest corn- ethanol production is assumed,
using values developed for the CEC ( Unnasch et al. 2007). We assume that this is the value to
which any LCFS percentage reduction is applied ( as opposed to using a forecasted value for
2010 or some other baseline future). Thus, the 2020 goal of a 10% reduction by 2020 implies an
AFCI value of 82.9 by that date. In Section 5 of this report, six scenarios are presented that meet
or exceed the 10% target for light duty vehicles, with additional discussion presented on how it
could be met in heavy duty and off- road applications as well. These scenarios involve the use of
biofuels produced with low global warming impacts, electric vehicles, and hydrogen vehicles.
Options to reduce GHG emissions associated with the production or processing of fossil
resources are not evaluated due to limitations of time, however, these options will be evaluated
in Part 2 of this study.
1.5 Fuel carbon intensity after 2050
Large emission reductions will be needed to meet the 2050 climate stabilization target.
Achieving these reductions will require substantial technological innovation, and substantial
further reduction in the carbon content of transportation fuels.
Figure 1- 3 illustrates two possible emissions trajectories to 2050. Both are based on a projection
in which the total fuel consumption in California follows the dashed line labeled Reduced Fuel
Consumption ( RDF), with units of billion gallons of gasoline equivalent ( BGGE) per year. This
projection peaks and begins to decline in 2015 ( due to AB 1493), and continues a steady decline
to 6 BGGE by 2050. This Reduced Fuel Consumption projection could be achieved by a
combination of a reduction in vehicle usage and increased efficiency of fuel consumption per
mile driven. This reduced consumption projection is very aggressive; it represents a roughly 70
percent reduction below a projected BAU consumption of 20 BGGE by 2050.
The RFC projection has been calculated as the fuel consumption that would be required to meet
half of the 2050 GHG stabilization target if there were no change in the carbon intensity of
transportation fuels. This constant fuel carbon intensity is shown as a solid line labeled BAU
AFCI, with a value of 12.2 kgCO2eq./ GGE from 1990 to 2050. The resulting GHG emissions,
shown as the line with solid circles and labeled RFC GHG Emissions with BAU AFCI, are
reduced to 73 MMT CO2eq. by 2050. This is a 40 percent reduction below the estimated 1990
GHG emissions of 122 MMT CO2eq., and is therefore half of the 2050 stabilization goal.
In order for the RFC projection to meet the 2050 stabilization goal, the average carbon intensity
of transportation fuels must be reduced over time. The line with open triangles, labeled AFCI
Required to Stabilize RFC, indicates the change in the average carbon intensity that would be
necessary for total RFC GHG emissions to meet the 2050 reduction goal. The line with open
squares, labeled GHG Emissions with Required AFCI, indicates the GHG emissions over time
that meet the 80 percent reduction below 1990 levels by 2050. The carbon intensity required by
A Low Carbon Fuel Standard For California
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2050 is 4 kgCO2eq./ GGE. It should be noted that the AFCI required to stabilize the RCF
projection includes the 2020 target for the LCFS, and then declines at a slightly faster rate
between 2020 and 2050. This projection should be interpreted as a conservative rate of reduction
in the average carbon intensity of fuels in which the 2050 stabilization target can be achieved, in
part, with aggressive reductions in fuel consumption. If total future fuel consumption is higher
than the RFC projection out to 2050, which very likely, a more aggressive reduction in the
average carbon intensity will be required. For example, if the fuel consumption in 2050 is 20
BGGE, the average carbon intensity by 2050 would have to be 1.24 kgCO2eq./ GGE.
These trajectories were created with the VISION- CA model, the same model that was used to
develop the scenarios in Section 5 of this report. This model estimates GHG emissions from light
duty vehicles based on a number of pre- set inputs, and accounts for population growth, vehicle
stock turnover, and other phenomena, including existing CA climate policy such as AB 1493.
These trajectories illustrate how the state’s 2050 climate stabilization goals can only be met in
the transportation sector if there is a substantial reduction in both fuel consumption and the
emissions per unit of fuel consumed, or carbon intensity, and that a balanced strategy addressing
fuels, vehicles, and usage is necessary. They also illustrate the critical importance of
technological innovation.
0
5
10
15
20
25
1990 2000 2010 2020 2030 2040 2050
Fuel Consumption ( BGGE) and
Carbon Intenstiy ( kgCO2eq./ GGE)
0
50
100
150
200
250
GHG Emissions ( MMT CO2 eq.)
Reduced Fuel Consumption ( RFC)
BAU AFCI
AFCI Required to Stabilize RFC
RFC GHG Emissions with BAU AFCI
GHG Emissions with Required AFCI
Figure 1- 3: Trajectories for light duty vehicle GHG emissions to 2050
BGGE= billion gallons of gasoline equivalent; GGE= gallons of gasoline equivalent; MMT= million metric tons
A Low Carbon Fuel Standard For California
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1.6 Structure of this report
This report focuses on technical aspects of regulating the carbon intensity of transportation fuels.
Following this introduction, the second section presents short descriptions of the key methods
used in this study, specifically the VISION model and the practice of life cycle assessment,
especially as represented in the GREET model. The third section contains brief descriptions of
some ( but by no means all) of the fuels that might be used to comply with the LCFS. The fourth
section discusses the potential for the production of these fuels in California. The fifth section
may be among the most important because it presents the scenarios that were explored with the
VISION model. The regulatory design and various policy issues of the LCFS will be addressed
in a second report, referred to as Part 2.
1.7 References
AB 32: California Global Warming Solutions Act of 2006. Núñez/ Pavley 2004- 6, AB 32.
Arrow, Kenneth, Bert Bolin, Robert Costanza, Partha Dasgupta, Carl Folke, C. S. Holling, Bengt- Owe
Jansson, Simon Levin, Karl- Goren Maler, Charels Perrins, and David Pimentel. 1995. Economic
Growth, Carrying Capacity, and the Environment. Science 268: 520- 521.
Bakker , S., R. Buckingham, et al. ( 2003) " Integrated Energy Policy Report." California Energy
Commission, 47 http:// www. energy. ca. gov/ energypolicy/.
Baer, Paul, John Harte, Barbara Haya, Antonia V. Herzog, John Holdren, Nathan E. Hultman, Daniel M.
Kammen, Richard B. Norgaard, and Leigh Raymond. 2000. Equity and Greenhouse Gas
Responsibility. Science 289: 2287.
Bauen, A., J. Howes, and M. Franzosi. 2006. A methodology and tool for calculating the carbon intensity
of biofuels. London: E4tech, ECCM, Themba.
Bemis, Gerry. 2006. Inventory of California Greenhouse Gas Emissions and Sinks: 1990 to 2004.
Sacramento: California Energy Commission.
Bemis, Gerry, and Jennifer Allen. 2005. Inventory of California Greenhouse Gas Emissions and Sinks:
1990 to 2002 Update. In 2005 Integrated Energy Policy Report. Sacramento: California Energy
Commission.
Climate Action Team. 2006. Report to Governor Schwarzenegger and the Legislature, edited by 2005-
06_ GHG_ STRATEGIES_ FS. PDF. Sacramento: California Environmental Protection Agency.
Franco, Guido, Robert Wilkinson, Alan H. Sanstad, Mark Wilson, and Edward Vine. 2003. Climate
Change Research, Development, and Demonstration Plan. In Public Interest Energy Research
Program. Sacramento: California Energy Commission.
Hayhoe, K., D. Cayan, C. B. Field, P. C. Frumhoff, E. P. Maurer, N. L. Miller, S. C. Moser, S. H.
Schneider, K. N. Cahill, E. E. Cleland, L. Dale, R. Drapek, R. M. Hanemann, L. S. Kalkstein, J.
Lenihan, C. K. Lunch, R. P. Neilson, S. C. Sheridan, and J. H. Verville. 2004. Emissions pathways,
climate change, and impacts on California. Proceedings of the National Academy of Sciences of the
United States of America 101 ( 34): 12422- 12427.
Hughes, J. E., C. R. Knittel, and D. Sperling. 2006. Evidence of a Shift in the Short- Run Price Elasticity
of Gasoline Demand. In Institute of Transportation Studies. Davis: University of California.
Intergovernmental Panel on Climate Change. 2001. Third Assessment Report: The Scientific Basis. New
York: Cambridge University Press.
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———. 2007. Climate Change 2007: Impacts, Adaptation, and Vulnerability. In Fourth Assessment
Report
Jones, M., M. Smith, et al. ( 2005) " Integrated Energy Policy Report." California Energy Commission, 208
http:// www. energy. ca. gov/ energypolicy/
Katzer, James. 2007. The Future of Coal. Cambridge, MA: MIT.
Leiby, Paul N., and Jonathan Rubin. 2004. Understanding the Transition to New Fuels and Vehicles. In
The Hydrogen Energy Transition, edited by D. Sperling and J. S. Cannon. San Francisco: Elsevier.
McNutt, B. and D. Rodgers. 2004. Lessons Learned from 15 Years of Alternative Fuel Experience. In The
Hydrogen Energy Transition, edited by D. Sperling and J. S. Cannon. San Francisco: Elsevier.
Norberg- Bohm, V. 1999. Stimulating ' green' technological innovation: An analysis of alternative policy
mechanisms. Policy Sciences 32 ( 1): 13- 38.
Pacca, S., and A. Horvath. 2002. Greenhouse gas emissions from building and operating electric power
plants in the upper Colorado River Basin. Environmental Science & Technology 36 ( 14): 3194- 3200.
Roos, Michael. 2003. The Effects of Global Climate Change on California Water Resources. In Public
Interest Energy Research Program - Research Development and Demonstration Plan. Sacramento,
CA: California Energy Commission.
Schafer, A. 2000. Carbon dioxide emissions from world passenger transport - Reduction options. In
Energy Air Quality, and Fuels 2000.
Schwarzenegger, Arnold. 2007. Executive Order S- 01- 07: Low Carbon Fuel Standard. Sacramento, CA.
Shaw, Rebecca. 2002. Ecological Impacts of a Changing Climate. In PIER Environmental Area Report.
Sacramento: California Energy Commission.
Taylor, M. R., E. S. Rubin, and G. F. Nemet. 2006. Technological Innovation and public policy. In
Managing Greenhouse Gas Emissions In California, edited by M. Hanemann and A. E. Farrell.
Berkeley: University of California.
Turner, Brian T., Richard J. Plevin, Michael O'Hare, and Alexander E. Farrell. 2007. Creating Markets
for Green Biofuels. In Transportation Sustainability Research Center. Berkeley: University of
California.
Unnasch, Stefan, Jennifer Pont, Michael Chan, and Larry Waterland. 2007. Full Fuel Cycle Assessment
Well To Wheels Energy Inputs, Emissions, And Water Impacts. Sacramento: California Energy
Commission.
Wagner, F., and J. A. Sathaye. 2006. Sharing the burden of climate change stabilization: An energy sector
perspective. Energy Policy 34 ( 15): 2217- 2231.
Wigley, T. M. L., R. Richels, and J. A. Edmonds. 1996. Economic and environmental choices in the
stabilization of atmospheric CO2 concentrations. Nature 379 ( 6562): 240- 243.
Winebrake, James J., and Alex Farrell. 1997. The AFV Credit Program and Its Role in Future AFV
Market Development. Transportation Research D 2 ( 2): 125- 132.
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2 Methods
In analyzing the technical feasibility of the LCFS, several policy choices must be assumed.
These choices will be further evaluated in Part 2 of the study.
2.1 Baseline
The baseline used in Part 1 is the most recent year for which adequate greenhouse gas ( GHG)
emission data exist for California. The most recent data is used so that the analysis most
accurately reflects recent fuel production in California before any steps were taken to reduce
carbon intensity. Before January 2007, there was little to no discussion of a potential LCFS and
no steps had been taken to measure, let alone control the global warming impact of fuels.
Therefore, the most recent year for which adequate data exist is the most appropriate baseline
year. The most recent CEC data available are for 2004, so this year is chosen as the baseline for
the following analysis ( Bemis 2006). This source also contains data on fuel consumption.
In order to avoid contamination of ground water, ARB regulations required removal of a widely
used gasoline additive, methyl- tertiary butyl ether ( MTBE), from gasoline by 2004. MTBE was
used to meet a requirement for gasoline to contain oxygen ( and not just hydrogen and carbon).
The petroleum industry responded beginning in 2002, replacing MTBE with ethanol. According
to CEC data, approximately 12 percent of the gasoline pool was converted in 2002, 65 percent in
2003 and 98 percent in 2004 ( Bemis 2006 p. 40).
Approximately 15.7 billion gallons of gasoline were consumed in the transportation sector in
2004 ( Bemis 2006 Appendix B; California Board of Equalization 2007). This implies
approximately 893 million gallons of ethanol were consumed that year in California, equivalent
to 589 million gallons of gasoline in terms of energy content. Accounting for the denaturant and
energy content, about 3.6% of the energy in California’s gasoline came from ethanol in 2004.
The GWI of the ethanol used in California is not known, but a reasonable and straightforward
assumption is that this ethanol was essentially the same as that used in the rest of the United
States. In this study we assume that the “ average Midwest ethanol” determined in the AB 1007
study under the authority of the CEC is representative of the average ethanol used in 2004
( Unnasch, Pont et al. 2007). 1
2.2 Scope of the standard
This section evaluates three questions about the scope of the LCFS: Which transportation fuels
does the standard apply to? Should upstream emissions ( those from fuel production, such as
refinery emissions) be included? Should electricity be included?
1 This estimate may understate the GWI by several g/ MJ due to assumed energy efficiency improvements in the AB
1007 analysis, which is for 2012, not 2004. Further analysis should resolve this issue.
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2.2.1 Which fuels
Executive Order S- 1- 07 refers to “ California’s transportation fuels,” which a plain reading of the
text suggests includes all types of fuels. However, it may not be practical for CARB to regulate
every fuel type, or CARB may not have the statutory authority to do so. For instance, aircraft
emissions are controlled by international agreements, not state regulation. The potential scope of
regulation under the LCFS can be described by the following possibilities:
! " Gasoline- powered vehicles
! " Light duty vehicles
! " On- road vehicles ( light and heavy duty)
! " On- road and off- road vehicles ( including trains, construction equipment, forklifts, etc.)
! " All transportation fuels
Currently, the first two categories are essentially the same, but automobile manufacturers are
expected to introduce diesel passenger vehicles that comply with California’s air quality
regulations, in part to comply with AB 1493. Many fuel retailers have installed diesel dispensing
infrastructure in preparation for the deployment of such vehicles.
In Part 1 of this study, twelve light duty vehicle scenarios were generated and evaluated using a
spreadsheet model, and a simpler method is used to evaluate GHG emissions from heavy- duty
and off- road transportation applications ( e. g., forklifts). This choice was made for simplicity and
to allow a relatively broad analysis of how the LCFS could be applied. In Part 2 of the study,
policy issues associated with the implementation of the LCFS will be explored, including what
the scope of the LCFS should be. The assumptions made in Part 1 are not endorsements of any
particular regulatory choice.
2.2.2 Upstream emissions
Oil refineries produce numerous products simultaneously from each barrel of petroleum,
including petrochemicals, asphalt, and various fuel products. It is difficult to attribute refinery
process emissions to specific products. AB 32 ( Núñez/ Pavley) could cover all the emissions from
refineries. For simplicity in Part 1 of this study, differences in oil production and refining
emissions ( i. e., “ upstream”) emissions are ignored. In Part 2 of the study, policy issues
associated with the implementation of the LCFS will be explored, including the scope of the
standard. The assumptions made in Part 1 are not endorsements of any particular regulatory
choice.
2.2.3 Electricity
New battery electric vehicle ( BEV) or plug- in hybrid electric vehicle ( PHEV) technologies could
bring about significant changes in transportation energy use by allowing electricity to power a
large number of light duty vehicles. ( There are a few BEVs in California already.) An
appropriate approach to promoting BEVs and PHEVs and regulating their GHG emissions is
necessary. In doing so, it is convenient to define “ fuel electricity” as electricity used to power
new electric transportation technologies and separate it from traditional applications such as
heavy duty rail.
For simplicity and to enable a broad analysis of the LCFS, Part 1 of this study includes the
electricity used to power on- road vehicles as part of the LCFS.
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2.3 Measuring GHG intensity
Executive Order S- 1- 07 states “( t) hat a statewide goal be established to reduce the carbon
intensity of California’s transportation fuels by at least 10 percent by 2020.” The terms of this
regulation must be further defined. We interpret carbon more broadly to mean the life cycle
global warming intensity ( GWI) associated with a unit of energy consumed in a particular fuel-vehicle
combination. The bounds of what is included in this life cycle emissions assessment and
the methods for measuring these emissions are discussed in detail in Part 2 of this study. Section
2.4 discusses several possible ways of defining carbon intensity, recommending that intensity be
measured per unit of energy at the wheel ( or motive energy). The phrase “ 10 percent by 2020”
refers to a baseline carbon intensity, which is discussed briefly in Section 2.1, and in more detail
in Part 2 of this report. The scope of the phrase “ California’s transportation fuels” is discussed
briefly in Section 2.2, and in more detail in Part 2.
The distinction between an absolute target and an intensity target is perhaps the most
fundamental characteristic of the LCFS. As an intensity target, the LCFS addresses GHG
emissions as a ratio of total GHGs to some denominator, such as per miles driven, or per quantity
of fuel consumed. An absolute target would require total GHG emissions from the transportation
sector to fall below some fixed value, such as 120 MMTCE ( million metric tons carbon
equivalent), or “ 10 percent below 1990 values.” An absolute target would be independent of any
future changes in annual VMT or fuel consumed. If VMT or fuel consumed were greater than
anticipated in the target year, an absolute target would be more difficult to meet than originally
expected. Alternatively, if VMT or fuel consumed were less than anticipated in the target year,
an absolute target could be met more easily ( see Box 1). In contrast, an intensity target
accommodates these changes.
BOX 1: What if the LCFS were an absolute target instead of an intensity target?
Given BAU projections of increases in VMT of 1.76% per year in California between 2003 and
2025 2 , California can expect an increase in VMT of approximately 25% between 2007 and 2020.
Absent any change in average vehicle fuel efficiency, this increase in total driving would result
in a 25% increase in fuel use. A 10% reduction in carbon intensity would result in an increase of
13% in absolute emissions 3 . Under the same assumptions, if the LCFS were defined as an
absolute 10% emissions reduction, it would in effect require a reduction in carbon intensity of
31% by 2020 4 .
Examples of intensity values include “ grams of carbon dioxide equivalent GHGs per vehicle
mile traveled” ( gCO2- eq/ mile), or “ tons of carbon dioxide equivalent GHGs per million British
thermal units of fuel energy” ( tCO2- eq/ MMBtu fuel). A number of these intensity formulations
were explored during our study. Our final recommendation, explained in more detail below,
uses fuel energy adjusted for the efficiency of the vehicle drive train as a basis for calculating
greenhouse gas intensity. We call this approach the motive energy basis.
2 Kavalec, C., J. Page, and L. Stamets, Forecasts of California Transportation Energy Demand 2005- 2025. 2005,
California Energy Commission.
3 125% * 90% = 113%
4 Assume current emissions are X tons. A 10% absolute reduction would cap emissions at 0.9 X. Given projected
growth to 1.25X by 2020, a 31% (( 1.25 – 0.90)/ 1.25) carbon intensity would be required.
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2.4 Scope of the intensity metric
Life cycle analysis studies of transportation fuels typically refer to two parts of the total fuel
cycle. The term “ well- to- tank” ( WTT) is used to discuss emissions specific to the fuel
production, processing and transportation, and the term “ tank- to- wheel” ( TTW) is used to
discuss emissions specific to the vehicle ( see Figure 2- 2). When discussing total life cycle
emissions for a vehicle- fuel combination, the term “ well- to- wheels” ( WTW) is used.
A full WTW assessment would be the most comprehensive approach to tracking GHG emissions
from the transportation sector ( WTW life cycle analysis assessments also have the shortcomings
discussed in section 2.2.). The life cycle intensity metric we recommend for the LCFS is a well-to-
tank GHG emissions per unit of fuel energy with an adjustment reflecting the associated
vehicle drive train efficiency. By adjusting for the drive train efficiency, the energy in the
denominator is the motive energy— the amount of energy delivered to the wheels to power the
vehicle associated with the fuel- vehicle combination. We discuss three main classes of
emissions intensity metrics below in order to clarify the advantages of the motive energy- based
intensity metric.
The three approaches considered are:
# " At- the- pump/ plug: Emissions are measured per MJ ( or MMBtu) entering into the vehicle, at
the tank for liquid fuels and at the battery for plug- in vehicles.
# " Per- mile: Emissions are measured per mile driven.
# " At- the- wheel ( motive energy): Emissions are measured per MJ ( or MMBtu) delivered to the
wheel to move the vehicle.
The fundamental difference between these metrics is how they take into account vehicle fuel
economy.
2.4.1 At- the- tank/ plug metric
On one end of the spectrum, measuring emissions intensity at- the- tank/ plug calculates emissions
per the amount of energy contained in the fuel as it enters the vehicle. It does not take into
account the differences in fuel economy of different vehicle types nor their use. While this metric
is the easiest to calculate, it is the least accurate representation of the overall relative GHG
characteristics of different fuels. For example, electricity is more carbon intensive than gasoline
per MJ entering the vehicle ( at- the- tank/ plug), but significantly less carbon intensive per mile
driven due to the higher inherent efficiency of electric drive trains. Diesel is another example of
a fuel that is more carbon intensive than gasoline at the tank, but less carbon intensive if the
higher efficiency of diesel engines is taken into account. While electricity and diesel are perhaps
the most prominent examples, discrepancies exist for all fuels that are more or less efficiently
converted to power in the vehicles that use them.
2.4.2 Per- mile metric
On the other end of the spectrum, the per- mile metric would take full account of the differences
in fuel economy of vehicles running on different fuels. Assuming the same distance traveled, this
metric most accurately represents the actual difference in emissions to the atmosphere resulting
from the choice of fuel ( and implied vehicle) holding everything else constant.
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The disadvantage of this metric is that it requires significantly more data than the other two
metrics and is therefore less transparent, less certain for the regulated entities, and more
cumbersome to calculate. Data are needed on the fuel economy of the vehicles on California’s
roads. While DMV data provide information about the cars that are registered in California,
determining the fuel economy of these vehicles is difficult 5 .
Another potential problem with a per- mile metric is that, without adjustments, the anticipated
improvements in vehicle fuel economy such as from AB 1493 would artificially weaken the
LCFS by decreasing each fuel provider’s calculated intensity. AB 1493 is expected to result in an
18 percent reduction in greenhouse gas emissions from the light duty fleet in 2020 1 . If this were
indeed achieved, a per- mile LCFS standard would not require any reductions in emissions
intensity beyond those achieved through these non- LCFS related fuel economy improvements.
This can be prevented by creating a dynamic baseline that follows fuel economy improvements.
Regulated entities would be required to reduce fuel emissions by 10 percent beyond those
improvements. Correcting for fuel economy improvements is possible with the data available,
but involves a relatively complicated procedure and is therefore less transparent.
2.4.3 At- the- wheel ( motive energy) metric
The at- the- wheel intensity metric sits between the at the plug/ tank and per- mile options in the
fuel cycle. The key advantages of this approach are simplicity, relative to the per- mile metric,
and improved accuracy in estimating emissions, relative to the at- the tank/ plug approach. This
metric takes into account differences in engine and drive train efficiency, representing the
efficiency with which the fuel is converted to motive power for a to- be- determined set of
fuel/ vehicle categories. However, it does not take into account other vehicle efficiency losses,
such as those due to vehicle weight, air drag, rolling resistance and accessories, which are
included in the per- mile metric.
Intensity using the motive energy metric is calculated per unit energy entering the tank or battery
of the vehicle, adjusted for the drive chain efficiency in order to measure the amount of energy
reaching the wheels to power the vehicle. Intuitively, the adjustment factors are determined by
comparing the difference in fuel economy resulting from different drive trains in two otherwise
identical vehicles. This metric is much more accurate than measuring carbon intensity at- the-tank/
plug since an essential feature of a vehicle fuel is the efficiency of the technology associated
with its conversion to power. Drive train efficiencies do not vary significantly among vehicles
using the same drive train technology and therefore can be estimated for a relatively small
number of vehicle/ fuel categories. Another positive feature of this metric is that over time as
technologies change, it easily accommodates updates to efficiency factors and the creation of
new vehicle/ fuel categories. As with the per- mile metric described above, a key consideration is
whether the baseline vehicle efficiency will be a set value, or if it will dynamically follow
improvements in vehicle engine and drive train efficiency within each fuel/ vehicle category that
could result from policies such as AB 1493. Allowing the baseline vehicle efficiency value to
change over time ( e. g., as gasoline vehicle efficiencies improve) would make the LCFS more
difficult to meet, as the vehicle efficiency values would not decrease as quickly over time
relative to the baseline efficiency.
5 Two major uncertainties are the actual on- road fuel economy, which is a function of driver behavior and vehicle
age, and differences in vehicle utilization ( annual VMT) if for example, utilization declines with vehicle age.
A Low Carbon Fuel Standard For California
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The motive energy metric can avoid the cumbersome data requirements of accounting for the
fuel economy of all vehicles on the California roads. The LCFS accounting framework can be
greatly simplified by relying on imputed efficiency adjustments for particular fuels. These
values would need to be updated periodically as vehicle drivetrain efficiencies improve over
time. However, this leads to some level of inaccuracy in weighting the GHG emissions of
different fuels. For example, if diesel engines are generally utilized in heavier vehicles or plug- in
drive trains are preferentially used in lightweight or low- drag platforms, the additional
differences in emissions resulting from other vehicle characteristics are not factored into the
relative carbon intensities calculated with the at- the- wheel metric. There is a large potential for
improvements in vehicle fuel economy beyond improvements in the engine and drive train
efficiencies, such as through the use of very light materials and more aerodynamic frames. If
such technologies become widely adopted for some types of vehicles more than others, the
inaccuracies of the motive energy metric will increase. If these inaccuracies are deemed
significant, it is also possible to track drivetrain efficiencies through the vehicle fleet using DMV
data as new vehicles are introduced over time. This would reintroduce the data requirements and
cumbersome accounting of the per- mile metric, but would preserve the intensity basis of the
LCFS ( i. e., vehicle mass, aerodynamic drag, rolling resistance, and accessories would still be
excluded. For a discussion of energy flows through vehicles, see ( Ross 1997)).
2.4.4 Example regulatory approach
Below is an example of one equation that could be used to calculate carbon intensity using the
motive energy metric. Under the LCFS system, each firm’s average fuel carbon intensity ( AFCI)
must not exceed a set standard ( LCFS ), such that AFCI ! LCFS . The LCFS can be the same
for all fuels, vary by fuel, or vary by firm. A firm’s AFCI is calculated as the weighted average
of each fuel’s carbon intensity using one of the three metrics described above or a comparable
scheme. A fuel’s at- the- wheel carbon intensity equals the carbon intensity at the tank or plug
( CIi) measured in gCO2e/ MJ, divided by a unitless drivetrain efficiency adjustment factor ( * i "
),
which is the ratio of the vehicle’s drivetrain efficiency ( i "
) to that of a baseline drivetrain
efficiency ( * " ), where drivetrain efficiency is the percentage of energy input at the tank or plug
that reaches the wheel. The CI includes a fuel’s life cycle fuel carbon emissions per MJ delivered
at the tank ( or the plug) plus the emissions resulting from the combustion of the fuel. In the
equation below, the adjusted CI value is weighted by the total amount of motive energy of each
fuel ( Eim), measured in MJ. Eim is calculated as the Eit * i "
, where Eit is the total amount of
energy in MJ entering the vehicle at the tank or plug.
# $
LCFS
E
CI E
AFCI n
i
im
i
i i im
% !
&
&
% 1
* / "
2.5 Baseline AFCI, 2020 target and compliance pathways
Using data from public sources, the AFCI value for the baseline year and the 2020 target AFCI
can be calculated. For simplicity, and to match the scenario analysis presented in section 5, we
assume that the LCFS will cover all transportation- related gasoline and diesel fuel, but not LPG,
A Low Carbon Fuel Standard For California
35
jet fuel, residual oil, or lubricants. In Part 2 of the study, policy issues associated with the
implementation of the LCFS will be explored, including what the scope of the LCFS should be.
The assumptions made in Part 1 are not endorsements of any particular regulatory choice. To
perform this calculation GHG emission and fuel composition data are used to estimate the
weighted AFCI value in 2004, as shown in Table 2- 1 below. This calculation is preliminary and
may need to be updated or improved. Target AFCI values for 2020 are also shown.
Table 2- 1: Baseline and 2020 target AFCI values
GHG emissions ( Bemis for CEC 2006) MMTCO2- e Included?
LPG 0.19 0.10% No
Gasoline 130.92 70% Yes
Jet fuel 22.24 12% No
Diesel 32.16 17% Yes
Residual oil 0.61 0.33% No
Lubricants 0.75 0.40% No
TOTAL 186.87
Included total 163.08
Fuel composition ( Bemis for CEC 2006)
Gasoline Gasoline blendstock ( including denaturant in fuel ethanol) 94.4%
Pure ( neat) ethanol in fuel ethanol 5.6%
Diesel Petroleum- based diesel 100%
Biodiesel and renewable diesel 0%
AFCI values ( Unnasch, Chan et al. for CEC 2007) gCO2e/ MJ
Gasoline blendstock 92.7
Pure ( neat) Ethanol 75.9
Retail gasoline 92.0
Diesel 70.7
Weighted AFCI gCO2e/ MJ
Average for baseline year, 2004 87.9
2020 AFCI targets gCO2e/ MJ
- 5% 83.5
- 10% 79.1
- 15% 74.7
2.5.1 Targets and rate of progress
Having established a baseline value for GHG content, it remains to specify target levels for
successive years. 6 The central conceptual issue here is whether the standard should decline from
the baseline in equal annual steps linearly, faster at the beginning and more slowly in later years,
or slowly at the start and then more quickly.
A key factor to consider in designing a trajectory is the time required to develop new
technologies and invest in new infrastructure. Most of the potentially regulated liquid fuel firms
have suggested that their primary compliance strategy will likely be to blend biofuels, including
6 A single target to take effect only in 2020 would satisfy the literal mandate of the executive order but such an
approach would at the least lose all the benefits of progressive reductions until that time and, in our view, ignore a
legitimate state mandate for a consistent and explicit incentive program to help the industry innovate and adapt
quickly. Businesses that invest in GHG- reducing practices need to be reassured that their competitors will face a
cost structure that rewards this favored behavior.
A Low Carbon Fuel Standard For California
36
ethanol. With this compliance strategy, it will take time to build more tanks, upgrade terminals,
install E- 85 pumps, etc. Note that recent changes to the ARB’s air pollution regulations are likely
to cause refiners to increase the ethanol content in California gasoline to 10 percent by volume,
which would necessitate an increase in the capacity to make ethanol in California, or import it.
A second factor to consider is avoiding “ lock- in” of near term capital intensive technologies with
modest GHG improvements, and the inability to find markets for more advanced technologies
that may offer greater long- term gains.
The third factor is the potential for rearranging biofuel purchasing so that existing low- carbon
fuels are redirected to California, a practice called shuffling or rationalization. The former term
is used to implicitly criticize the practice because it leads to compliance on paper without any
change in net GHG emissions to the atmosphere. The latter term is used here in recognition of
the fact that such cost- minimizing behavior is not avoidable and is in fact desirable because it
begins to send the appropriate signal to fuel markets.
Bushnell et al argue that rationalization could become very large in the electricity sector as GHG
regulations are enacted, in part because of pre- existing low- carbon electricity generation in the
western grid and in part because compliance with of pre- existing renewable portfolio standard in
California and other states ( Bushnell, Peterman, and Wolfram 2007). Because of these factors,
they find that no new innovation or investment is needed to meet a significant GHG emission
reduction in electric power in California. Further, they find that existing technologies
( specifically natural gas combined cycle, nuclear, and wind power plants) could allow California
and other western states to return to 1990- level GHG emissions in the electric power sector by
2020, which would create little incentives to develop new technologies that might be needed to
stabilize GHG concentrations in the atmosphere in the future.
In transportation fuels, pre- existing regulation and low- carbon technologies are probably less
significant. The global warming intensity of fuels will be affected somewhat by the renewable
fuel standard ( RFS). However the RFS will cause the GWI of renewable fuels to go down only if
market responses to this law coincidently focus on low- GWI biofuels. Because the GWI of
biofuels varies from very high ( above gasoline) to potentially negative values, and the lowest-cost
fuels have among the highest GWI values ( corn ethanol processed in coal- burning facilities),
this is extremely unlikely ( Farrell 2006).
Section 3 of this study includes estimates of the amount of pre- existing low- GHG fuels in the
United States ( Table ES- 1) and enough information to calculate approximately how much these
resources might be able to contribute to LCFS compliance ( Table ES- 2). By 2012, production
facilities that currently exist, are in construction, or have been funded by the U. S. Department of
Energy as pilot projects are expected to be able to supply up to 299 million gallons of low- GHG
ethanol and 175 million gallons of low- GHG renewable diesel in the United States each year
( Anonymous 2007). If all of these fuels were sold in California instead of average ethanol, the
statewide AFCI would fall by about 4 percent or more. It is not clear, however, that all of the
biofuels from these pilot plants could be readily shipped to California.
A Low Carbon Fuel Standard For California
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In addition, large volumes of mid- GHG ethanol and biodiesel are available in the United States,
which could also be used in California, so rationalization could also come about simply by using
Brazilian ethanol in California instead of any US- manufactured ethanol. However, doing so
might require new transportation infrastructure to deliver Brazilian ethanol to California. Last
year, the US imported approximately 400 million gallons of ethanol from Brazil, which may
have very low GHG emissions ( depending on how land use change is treated). Production
capacity in Brazil is expanding in hopes of exporting more ethanol. However, the GWI of this
fuel is not clear, as the most reliable studies analyze “ best practices” rather than average
production. Acknowledging this data gap in its rulemaking for the RFS, the US EPA estimated
the GWI of average Brazilian ethanol to be halfway between cellulosic and corn- based ethanol
( EPA 2007, p. 248). However, this doesn’t account for the climate effects of land use change,
which is discussed in Section 2.7.4.
2.6 Compliance paths
Table 2- 2 and Figure 2- 1 illustrate four possible compliance paths. The first and simplest, Linear
compliance, uses equal absolute reductions in state AFCI values to reach the target. This results
in an annual decrease of 0.84 gCO2e/ MJ, which is a percentage reduction of 0.91% to 1.00%
annually over the compliance period.
The Slow 2- stage compliance path has an initial reduction in AFCI that is only about 1/ 5 that of
the linear reduction. This slow implementation is assumed to last only three years ( 2010- 2012)
so that the program review in 2014 has the opportunity to review at least one year of compliance
( 2013) during which a high rate of reduction in the state- wide AFCI value takes place. The rate
of decline for the second stage is chosen to achieve approximately the same level as the linear
reduction. The Late 2- stage simply uses half the linear rate of decline for the first half of the
compliance period ( actually 6 of 11 years) and the rate needed after that to catch up and achieve
about the same reduction in AFCI as the simple linear reduction. Note that on both 2- stage
compliance pathways that rationalization may account for most of the compliance activities
through 2014 or later.
The Rationalized compliance pathway assumes that sufficient rationalization ( or shuffling) is
feasible in the first year to lower the AFCI by 2.3 percent and that it is appropriate to require all
of this effect to occur in the first year so that the effect is limited to one year and no additional
credits are created by rationalization. Once this effect is accounted for, a simple linear decrease
in AFCI is imposed each year.
Taking all of the factors discussed above into consideration, the compliance pathway similar to
the “ Rationalization” pathway ( dashed line) may be the best choice. It accounts for
rationalization in the first year and then presents a relatively modest emission reduction ( about
– 0.7% per year) for the next several years. The ARB and CEC may want to examine the
potential for rationalization further before determining a compliance schedule.
A Low Carbon Fuel Standard For California
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Table 2- 2: Possible LCFS compliance schedules
Linear Slow 2- stage ( 2013) Late 2- stage ( 2016) Rationalized
Change in AFCI value Change in AFCI value Change in AFCI value Change in AFCI value
Annual Stage 1 Stage 2 Stage 1 Stage 2 Initial Annual
- 0.84 - 0.17 - 1.09 - 0.42 - 1.34 - 2.30 - 0.63
AFCI Change AFCI change AFCI change AFCI change
2004 87.9 87.9 87.9 87.9
2005 87.9 87.9 87.9 87.9
2006 87.9 87.9 87.9 87.9
2007 87.9 87.9 87.9 87.9
2008 87.9 87.9 87.9 87.9
2009 87.9 87.9 87.9 87.9
2010 87.1 - 0.91% 87.5 - 0.45% 87.5 - 0.45% 85.1 - 3.26%
2011 86.3 - 0.92% 87.1 - 0.46% 87.1 - 0.46% 84.5 - 0.67%
2012 85.5 - 0.93% 86.7 - 0.46% 86.7 - 0.46% 83.9 - 0.67%
2013 84.7 - 0.93% 85.7 - 1.15% 86.3 - 0.46% 83.4 - 0.68%
2014 83.9 - 0.94% 84.7 - 1.17% 85.9 - 0.46% 82.8 - 0.68%
2015 83.1 - 0.95% 83.7 - 1.18% 85.5 - 0.47% 82.2 - 0.69%
2016 82.3 - 0.96% 82.7 - 1.19% 84.3 - 1.46% 81.6 - 0.69%
2017 81.5 - 0.97% 81.7 - 1.21% 83.0 - 1.48% 81.1 - 0.70%
2018 80.7 - 0.98% 80.7 - 1.22% 81.8 - 1.51% 80.5 - 0.70%
2019 79.9 - 0.99% 79.7 - 1.24% 80.5 - 1.53% 79.9 - 0.71%
2020 79.1 - 1.00% 78.7 - 1.25% 79.3 - 1.55% 79.4 - 0.71%
Figure 2- 1: Possible LCFS compliance schedules
75
78
81
84
87
90
2005 2010 2015 2020
AFCI ( gCO2e/ MJ)
Slow 2- stage
Late 2- stage
Linear
Rationalized
A Low Carbon Fuel Standard For California
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2.7 Mid- GHG and low- GHG biofuels
One of the key assumptions that must be made for each scenario is how the GWI of different
fuels change over time. Possibly most important in this regard are biofuels, because there is great
variety in possible biofuel production pathways and much current research, and because biofuels
may require the fewest changes in vehicle and fuel infrastructure. We considered seven possible
ways in which biofuels production could change from 2008 to 2020, including both
improvements in ethanol production and the potential for other biofuels that could be produced
with very low GHGs. From this analysis, we created two representative categories, “ mid- GHG
biofuels” and “ low- GHG biofuels”.
In the scenarios in section 5, we assume that biofuels start out in 2010 with GWI values that are
the average for current U. S. produced biofuels, per the AB1007 study developed by the CEC
( Unnasch 2007). The production pathways are identified below.
When mid- GHG ethanol is specified, we assume that over time that ethanol production shifts to
an equal mix of four production pathways that are in commercial operation today. All use corn in
dry- mill plants, and include: a natural gas- fired plant ( Et3), a natural gas- fired plant that sells wet
distillers grains ( Et4), a plant that uses biomass ( stover) for energy ( Et5), and a plant in
California that uses natural gas and sells wet distillers grains ( Et74). This results in an AFCI
value for mid- GHG ethanol of 58 gCO2e/ MJ. We assume that mid- GHG diesel fuel is fatty acid
methyl ester biodiesel made from Midwestern soybeans. This results in an AFCI value for mid-
GHG biodiesel of 38 gCO2e/ MJ.
When low- GHG ethanol is specified, we assume that over time that ethanol production shifts to
an equal mix of three cellulosic production pathways that are currently under development.
These include ethanol made from California poplar ( Et21), California switchgrass ( Et23) and
Midwestern prairie grass ( Et24). This results in an AFCI value for mid- GHG ethanol of 4
gCO2e/ MJ. We assume that mid- GHG diesel are produced by a Fischer- Tropsch process from
California poplar. This results in an AFCI value for mid- GHG biodiesel of - 4 gCO2e/ MJ.
2.8 Life cycle assessment
The distinguishing feature of a “ life cycle” environmental impact analysis is that it estimates
environmental impacts associated with the entire life cycle of a particular product, as opposed to
impacts from just consumer end use. For fuels, the life cycle includes the production of the fuel
as well as its combustion. A life cycle comprises all of the physical and economic processes
involved directly or indirectly in the “ life” of the product, from the recovery of raw materials
used to make pieces of the product to recycling of the product at the end of its life. A life cycle
analysis ( LCA) of emissions formally characterizes the inputs, outputs, and emissions for each
stage of the life cycle, links the stages together, and aggregates the emission results over all of
the linked stages. 7
7 The LCA process described here is sometimes characterized as a “ process” LCA because it involves detailed
engineering analysis ( Hendrickson, Lave, and Matthews 2006). A more aggregated approach uses emission factors
and economic input- output models ( Hendrickson et al. 1998), but this approach is not discussed in this study.
A Low Carbon Fuel Standard For California
40
The basic building block in LCA is a set of energy and material inputs associated with a
particular output of interest for a particular stage in a life cycle, with emission factors attached to
some of the inputs. A life cycle is then a particular combination of I- O building blocks ( or
stages) linked together, where the output of one block ( or stage) is one of the inputs to another
stage, and the output of the last stage is the product or quantity of interest. An LCA aggregates
the emissions attached to the inputs over all of the linked stages, to produce an estimate of total
emissions per unit of final product output from the life cycle.
Consider, for example, the simplified depiction of the life cycle of gasoline shown in Figure 2- 2:
crude oil production and shipment, petroleum refining, and gasoline combustion. In the first
stage, fuels and materials are input to the crude- oil recovery process, which results in an output
of crude oil. This crude oil output is input to the next stage, petroleum refining. ( The petroleum
refining stage also has other energy and material inputs.)
Figure 2- 2: Fuel life cycle analyses
The output of the petroleum refining stage is a vehicle fuel, which is input to the last stage, end
use. Each process requires energy and material inputs ( Ein and Min), and each process has energy
losses due to conversion efficiencies ( Elosses) and greenhouse gas emissions ( GHGs). Adding up
the emissions associated with all of the inputs for crude oil recovery, petroleum refining, and
gasoline end use gives us a picture of the life cycle emissions impact of gasoline. Other types of
gaseous emissions and wastes may also be generated from each process, but are not indicate