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Mitigation Strategies to Achieve the Low Carbon Fuel
Standards
Journal: Environmental Science & Technology
Manuscript ID: es- 2009- 00262w. R1
Manuscript Type: Policy Analysis
Date Submitted by the
Author:
Complete List of Authors: Yeh, Sonia; University of California, Davis, Institute of
Transportation Studies
Lutsey, Nicolas; University of California, Institute of Transportation
Studies
Parker, Nathan; University of California, Institute of Transportation
Studies
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Assessment of Technologies for Compliance
with the Low Carbon Fuel Standard
Sonia Yeh*, Nicholas P. Lutsey, and Nathan C. Parker
Institute of Transportation Studies, University of California, Davis, One Shield Ave.,
Davis, CA 95616
Abstract
California’s low carbon fuel standard ( LCFS) was designed to incentivize a diverse array
of available strategies for reducing transportation greenhouse gas ( GHG) emissions. It
provides strong incentives for fuels with lower GHG emissions, while explicitly requiring
a 10% reduction in California’s transportation fuel GHG intensity by 2020. This paper
investigates the potential for cost- effective GHG reductions from electrification and
expanded use of biofuels. This analysis indicates that fuel providers could meet the
standard using a portfolio approach that employs both biofuels and electricity, which
would reduce the risks and uncertainties associated with the progress of cellulosic and
battery technologies, feedstock prices, land availability, and the sustainability of the
various compliance approaches. This research is based on the details of California’s
development of an LCFS; however, this research approach could be generalizable to a
national U. S. standard and to similar programs in Europe and Canada.
* Corresponding author: slyeh@ ucdavis. edu, Tel: ( 530) 754 9000, Fax: ( 530) 752- 6572.
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Keyword: Performance- based standard, carbon intensity, cost- effectiveness.
Briefs: A low carbon fuel standard can stimulate innovation in alternative low- carbon
fuel technologies that contribute toward climate mitigation and energy security goals in
California by 2020.
1. Introduction
The transportation sector is responsible for about 30% of U. S. and 40% of California’s
greenhouse gas ( GHG) emissions and is growing faster than any other major economic
sector. Transportation GHG emissions are primarily determined by vehicle efficiency,
fuel GHG intensity, and vehicle travel demand. Whereas vehicle efficiency standards and
vehicle travel demand reductions have often been addressed by government, the concept
of a low carbon fuel standard ( LCFS), which specifically aims to reduce transportation
fuels’ overall GHG emissions, is relatively novel. Economy- wide policies such as a
moderate carbon cap- and- trade program are unlikely to induce significant GHG
reductions from the transport sector, beyond efficiency improvement in the short- to
medium- term ( 1- 3). By regulating the GHG content of transportation fuel, the LCFS can
contribute to both GHG mitigation and energy security. Transportation fuel use in the
U. S. is mostly comprised of fossil fuels, predominantly gasoline and diesel, which have
high GHG emissions per unit of energy. Unlike the popular biofuel volumetric mandates
or blend requirements, such as the Renewable Fuel Standard program in the U. S. and the
Biofuel Directive in the European Union, an LCFS is a performance- based standard that
seeks to gradually reduce the GHG intensity of transportation fuels. This paper analyzes
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technologies that could be deployed to meet the requirements of California’s proposed
LCFS.
In California, Governor Schwarzenegger issued Executive Order S- 01- 07 in January
2007, which mandates a 10% reduction in lifecycle GHG intensity of transportation fuels
by 2020. Lifecycle GHG intensity is defined as grams of carbon dioxide equivalent per
megajoule of fuel energy ( gCO2e/ MJ). Aside from the predominant GHG emission – CO2
– other GHG emissions like methane ( CH4) and nitrous oxide ( N2O) are converted into
their CO2 equivalent emissions according to their global warming potential. This measure
captures all lifecycle emissions associated with fuels, including emissions from
cultivation and extraction, pipeline transport, processing, conversion and production,
distribution, and vehicle operation. California’s LCFS is the first major regulation of
emissions based on lifecycle GHG emissions. It allows for the use of market- based
emission- trading mechanisms for compliance, where companies can buy or sell credits
with other regulated parties that are below or above their compliance obligations. Credits
( in million tonnes) are generated from fuels with lower carbon intensity than gasoline or
diesel, the baseline fuels. All low- GHG transportation fuels, which may include low-
GHG fossil fuels ( e. g., compressed natural gas, oil derived from tar sands with carbon
capture and sequestration), biofuels ( e. g., ethanol, biodiesel), and other energy carriers
( e. g., electricity, hydrogen), can contribute to GHG emission reductions ( 4).
The regulated parties of California’s LCFS are refiners, blenders, fuel producers, and
importers. Aviation and maritime fuels are excluded because California has limited
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authority over these areas. Theoretically, the regulated parties have many options to meet
the standard. First, refiners can blend low- GHG biofuels, such as those derived from
cellulose or waste streams, into gasoline or diesel. Second, fuel providers can sell
alternative transport fuels such as high- level blends of biofuels ( e. g., ethanol blended in
gasoline above 10% by volume, biodiesel in diesel above 20% by volume), compressed
natural gas, electricity, and hydrogen fuels. And third, regulated parties can purchase
credits from those regulated parties that are over- compliant, or they can apply credits that
they banked in previous years. This hybrid of regulation and market mechanism can
stimulate innovation and provide incentives for fuel providers to produce more low- GHG
fuels at lower costs ( 5).
The final rules of the California LCFS were adopted by the California Air Resources
Board ( CARB) on April 23 2009 and will be implemented in January 2010 ( 4). Earlier
work has focused on the conceptual policy design ( 6, 7) and rationale for a performance-based
standard ( 5). This paper tackles the following questions: Are there enough low-
GHG fuels available to meet the standard? How much production of in- state resources
will be available or necessary to meet the LCFS? Given that the standard is flexible and
designed to promote innovation, what are the likely competing technologies for
compliance with the standard? What are the costs of compliance from fuel providers’
perspective? What are the incentives for lower- GHG fuels?
Because of the known, large- scale applications and large GHG reduction potential
before 2020, our evaluation focuses on biofuels ( i. e., ethanol and biodiesel) and
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electricity. We first explore the biofuel resource and GHG reduction potential in
California and in the western U. S. states and the potential electrification applications to
replace transportation fuels ( Section 2). We also estimate the cost- effectiveness of
compliance strategies for the regulated parties. In Section 3, we propose a possible
portfolio- based scenario utilizing both biofuels and electricity to achieve the LCFS
targets. We discuss future research needs and the implication for a national LCFS in
Section 4.
2. Resource Potentials: Biofuel and Electricity
2.1 The Design of the LCFS
In California’s LCFS, the baseline transportation fuels ( gasoline and diesel) and their
alternatives have been assigned “ carbon intensity” ( CI) ratings ( gCO2e/ MJ) based on
lifecycle GHG intensity, adjusted for associated vehicle drive- train efficiency over
conventional gasoline- engine vehicles ( 4). California adopted the default and opt- in
approach, adapted from the United Kingdom’s Renewable Transport Fuel Obligation
( RTFO), which allows companies to “ opt in” a lower CI value if they can provide
evidence that the fuel they produce has a significantly lower GHG intensity than the
default value. California’s LCFS has two regulated fuel types – gasoline and gasoline
substitutes, and diesel and diesel substitutes – and the average fuel carbon intensity
( AFCI) of each fuel type is required to be 10% lower by 2020. Excess emission credits
can be traded between these two targets ( 4). It is expected that in 2010, the reference year
for California’s LCFS, GHG emission from the use of transportation fuels will be 267
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million tonnes CO2e/ yr ( on a lifecycle basis), of which 76% will come from gasoline fuel,
6% from corn ethanol, and 17% from diesel.
We first examine the resources available in California and other western U. S. states to
increase deployment of low- GHG biofuels. Second, we consider the potential of utilizing
electricity to displace conventional transportation fuels. Third, in Section 2.4, we discuss
the GHG reduction cost- effectiveness of the two pathways.
2.2 GHG Reduction through Expanded Biofuel Use
We evaluate resource availability and explore the potential GHG emission reduction
from biofuels, based on the work recently published by University of California, Davis
researchers and collaborators for the Western Governors’ Association ( WGA) ( 8- 10).
The researchers use a Geographic Information System ( GIS) modeling approach in
conjunction with a full supply- chain optimization model to develop a set of biofuel
supply curves by feedstock within the WGA region, which covers the 18 western U. S.
states with an eastern border from Texas in the south to North Dakota in the north. The
methodology and results of the study are described in detail in Parker et al. ( 10). The
study concluded that biofuels produced from resources in the Western states by 2015
could provide between 5% and 10% of the projected transportation fuel demand in the
region at a price between $ 2.40 and $ 3.00 per gasoline gallon equivalent ( gge), excluding
local distribution and marketing costs and taxes. These fuels will rely on a diverse
resource base with significant contributions from municipal solid waste, agricultural
residue, herbaceous energy crop, forest thinning, corn, and tallow resources. The study
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attempted to characterize the best available knowledge on biofuel technologies and
feedstock supply. However, major uncertainties remain including the economic
performance of the different conversion technologies, the adequacy of the supporting
feedstock and biofuel delivery infrastructure, and the added costs for biomass feedstocks
to meet sustainability requirements. Table 1 shows the potential for biofuel production to
contribute toward compliance with the LCFS. Parker et al. ( 10) estimated that the western
states have biofuel potential total of 14 billion gge per year ( equivalent to approximately
20 billion volumetric gallons of biofuel).
Recent studies have shown that massive consumption of biofuels in the U. S. could lead
to expansion of farm lands throughout the world, at the expense of other crop lands and
non- crop lands such as forest lands and grass lands ( 11- 13). Moreover, when lands with
rich soil and biomass carbon deposits are initially converted to agricultural production, a
large amount of carbon is emitted. This initial “ carbon debt” can take years or even
decades of cultivation to pay back ( 14- 16).
The conversion of land, induced by market- mediated effect, can be direct or indirect.
The indirect effect, or indirect land use change ( iLUC), represents the overall impacts
from an increased demand for crop- based biofuel production, leading to both
extensification ( expansion of cultivated land area) and intensification ( increasing inputs
to increase yields) of agriculture that would not occur in the absence of biofuels
production. Extensification modifies global land forms ( e. g., farmland, forest, marginal
lands) and their carbon stocks. These iLUC effects, which cannot be empirically
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observed, are estimated from global land use models ( 17- 19) and can potentially be
mitigated by policy responses ( 20). Attempting to determine the magnitude of the overall
market- mediated impact on GHG emissions per MJ of particular biofuels is an intense
research area ( 21, 22) but is beyond the scope of this study. Instead we adopt the
preliminary iLUC values proposed by CARB for food crop- based biofuels including corn
ethanol, Brazilian sugarcane ethanol, and biodiesel from soybean and for energy crops as
placeholders to capture the possible iLUC effects on the lifecycle GHG emissions of
biofuels ( 4). These placeholders are meant to reflect the consensus that reliance on food
crop- based biofuels would have large iLUC effects; energy crop- based biofuels would
have more moderate effects; and biofuels from waste streams, agricultural residue, algae,
or biomass crops grown on degraded lands would have negligible effects ( 23).
The estimated total GHG reduction ( in million tonnes CO2e per year) is calculated
based on the potential biofuel resources by feedstock ( in MJ/ yr, converted from gge/ yr)
and multiplied by the difference between the biofuel and the reference fuel GHG
intensity levels ( gCO2e/ MJ/ 10 6 ). Fuel providers can use biofuels produced elsewhere,
including imports, but the analysis here suggests sufficient quantity of biofuels within the
western region to achieve the LCFS carbon reduction target. We found that by including
gasoline and diesel fuels together, an estimated 46% of the targeted GHG reduction could
be met with California- grown fuels. When the potential biofuel production of all the
western states is considered, the potential GHG reduction is equivalent to over twice the
targeted California LCFS emission reduction ( Table 1).
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2.3 GHG Emissions Reduction from Using Electricity- Fuel
There are numerous ways in which electricity generation can be used as an energy
source to supplant transportation fuels. Applications for electrification in light- duty
vehicles include plug- in hybrid electric vehicles ( PHEVs) and full battery electric
vehicles ( BEVs or EVs). In heavy- duty truck applications, electrification includes the
plugging in of long- haul Class 8 trucks that would otherwise idle their main propulsion
engines to power accessories in the truck cabin. Another option is to use electrified
transport refrigeration units ( TRUs) to power the refrigeration cycle for the cooling of
cargo space, rather than TRUs powered by diesel- fueled engines. There can also be
electrification at ports and in non- road engines, including in industrial ( e. g., forklifts) and
in smaller ( e. g., lawn and garden equipment) applications.
Because electricity used in vehicle technologies is typically more efficient than
gasoline or diesel, CARB has assigned proposed “ default” energy economy ratio ( EER)
values for PHEVs, BEVs, and other onroad and offroad electrification. The EER is
defined as “ the ratio of the number of miles driven per unit energy consumed for a fuel of
interest to the miles driven per unit energy for a reference fuel” ( 4). The total GHG
reduction is estimated based on the following equation:
( ) 2 tonnes CO e
GHG reduction ( )
gram CO e
tonne CO e
EER
CI
Q CI Q elc
Ref Ref elc
2
6
2
10
1 ⋅
= ⋅ − ⋅ ( Equation 1)
where:
Q Ref = Quantity reduction of reference fuel, gasoline or diesel ( MJ/ yr)
Q elc = Quantity increase of electricity use ( MJ/ yr)
CI Ref = Fuel carbon intensity of reference fuel ( gCO2e/ MJ)
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CI elc = Fuel carbon intensity of electricity ( gCO2e/ MJ)
EERi = Energy Economy Ratio ( dimensionless)
The PHEVs, which can use both grid- supplied electricity and liquid fuels, offer
substantial potential GHG emission reductions ( 24- 27). Based on a widely cited Electric
Power Research Institute ( EPRI) study, PHEV20 ( those vehicles with a battery capacity
of 20 miles of all- electric range) efficiency when in all- electric ( i. e., “ charge- depleting”)
mode is about 4.3 miles/ kWh for a compact car and 2.6 miles/ kWh for a mid- size sport
utility vehicle ( 24). Over the lifecycle, the use of electricity in light- duty vehicles offers
an estimated 57– 64% improvement in carbon intensity over gasoline fuel. This
improvement is based on 35– 41 gCO2e/ MJ for electricity ( after EER adjustment) for
average and marginal additions to the California grid electricity mix ( which is 43%
natural gas, 27% renewable, 15% nuclear, 15% coal) ( 4, 28), compared to 96 gCO2e/ MJ
for gasoline.
A summary of potential applications for expanded use of electricity to supplant higher
carbon fuels is shown in Table 2. Of the electricity applications investigated here, PHEVs
and forklifts offer the greatest potential for decreased GHG emissions. The PHEV
category includes 90% PHEV20 ( which are assumed to cover 36% of their distance in
all- electric mode) and 10% PHEV40 ( 64% all- electric mileage) ( 24). Electrification of
truckstops and marine ports also offer relatively high potential GHG reductions.
Together, the electrification actions examined here would equate to a 2.3 to 5.3 million
tonnes CO2e, an 8% to 19% contribution toward the total required LCFS target for 2020.
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Based on estimates from the full use of all the electrification applications from Table 2,
these new electric demands could result in an additional 2 GW of “ summer peak load
before mitigation” ( 29). The required amount of annual electricity usage ( about 11
TWh/ yr) and peak capacity increase ( about 2 GW) are 3– 4% of the California electricity
demand and peak capacity, respectively. Provided that peak- time charging is avoided,
several million PHEVs could be deployed in California without requiring new generation
capacity ( 30). However, issues related to the future grid capacity, the specific charge
timing of the different electric applications, and the local distribution network would
need to be examined.
2.4 Cost- effectiveness of Compliance from Fuel Providers’ Perspective
The “ cost- effectiveness” of compliance is defined as the relative cost of the alternative
fuel compared with reference petroleum, per amount of GHG abatement. For the same
level of abatement cost, it is more cost- effective ( i. e., lower cost per tonne of GHG
reduction) to adopt measures that achieve higher GHG reductions. A performance- based
LCFS provides higher economic incentives ( i. e., lower abatement cost per tonne of CO2e
reduction) for lower- GHG fuels than for fuels that have only marginal GHG reduction
potential. A cost- effectiveness ratio that is below zero would deliver a net financial
benefit while reducing GHG emissions. This is consistent with several studies on lower
GHG technologies ( see, e. g., ( 31)).
The cost- effectiveness of any expansion of the use of alternative fuels for
transportation, from the perspective of fuel providers, is subject to the uncertainties of the
prices of the biomass feedstocks, the cost of electricity, and the costs of competing
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petroleum products. We compare the costs of the biofuels and electricity against
petroleum costs of $ 2 and $ 3 per gge ( crude and refining cost, excluding distribution,
marketing, and taxes, which add another 50– 70 cents) to estimate the cost- effectiveness
of utilizing these two abatement strategies to reduce the GHG emission contribution of
transportation fuels under an LCFS. The finished gasoline production cost of $ 2.00/ gge
corresponds to about $ 2.60/ gge retail in California and roughly $ 60 per barrel at the
world oil price. The GHG- reduction cost- effectiveness of compliance is calculated by the
following equation:
( )
( ) tonne CO e
gram CO e
CI CI EER
Cost EER Cost
tonne CO e
Cost effectiveness
f LCF
LCF Ref
2
2
6
2 Re 1
10
/
/
($ / )
⋅
−
−
=
( Equation 2)
where:
Cost Ref = Cost of reference fuel, gasoline or diesel ($/ MJ)
Cost LCF = Cost of low carbon fuel ($/ MJ)
CI Ref = Fuel carbon intensity of reference fuel ( gCO2e/ MJ)
CI LCF = Fuel carbon intensity of low carbon fuel ( gCO2e/ MJ)
EERi = Energy Economy Ratio ( dimensionless)
2.4.1 Cost- Effectiveness of Compliance Using Biofuels
The cost- effectiveness of biofuels is determined by the cost difference between the
production cost of biofuels ( based on the WGA study ( 8- 10)) and the production costs of
reference petroleum fuels, divided by the resulting emission reduction from the use of the
alternative fuels for a fixed amount of energy required by vehicles. For example, at a
price difference of $ 0.50/ gge between the gasoline fuel and the biofuels, the compliance
costs are $ 276/ tonne CO2e for today’s low- GHG corn ethanol ( CI = 80.7 gCO2e/ MJ
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including indirect emissions of 30 gCO2e/ MJ ( 32)) versus $ 57/ tonne CO2e for cellulosic
biofuel from forest waste ( CI = 22.2 gCO2e/ MJ). Figure 1 shows fuel providers’ GHG-reduction
compliance cost curves for biofuels produced in California and from the
western states. Based on the cost assumptions presented in Parker et al. ( 10), an 18– 50
million tonnes CO2e reduction ( 63– 180% of the target LCFS reduction) could be met at a
cost less than or comparable to that of conventional petroleum fuels at $ 2 to $ 3 per gallon
( or $ 2.6 to $ 3.6 per gallon including distribution, marketing, and taxes).
Even though the estimated costs of LCFS compliance for the regulated parties range
from - 125 to 24 $/ tonne CO2e depending on the assumptions of gasoline and diesel costs,
there are significant uncertainties associated with technologies, feedstock costs, and
infrastructure availability, as well the environmental impacts of large- scale biofuel
feedstock production such as excess nitrous oxide emissions, feedstock water use, and
water pollution ( 33). The CO2e compliance cost curves depend critically on many cost
assumptions, including those related to the costs of feedstock and production. The
biomass feedstock and production costs are based on engineering cost estimates ( 10) that
do not account for more dynamic market effects. Many reasons might explain higher
prices of feedstock and production costs. For example, the increased demand for corn
ethanol contributed to increased corn prices in the U. S. from 2006 to summer of 2008,
when high oil prices, government subsidies, and industry growth made corn ethanol a
cost- competitive substitute for gasoline. High oil prices also increase the costs of
fertilizer and energy. In reality, the actual supply curves are likely to start from lower
feedstock costs when biofuel demands are lower and to move toward higher feedstock
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and production costs as demand for biofuel increases. The resource supply curves
presented here also assume production cost at significant economies of scale, although
experience suggests that the cost at the beginning of production is likely to be higher due
to technology uncertainties and the lack of economy of scale ( 34, 35).
2.4.2 Cost- Effectiveness of Compliance Using Electricity
We calculate the cost- effectiveness of compliance of electricity use strictly from a fuel
provider’s perspective. The cost- effectiveness from a vehicle user’s perspective, which
would also account for the additional cost of batteries and other electric components, has
been addressed in many studies [ e. g., ( 24, 36)] and is outside the scope of this study.
Figure 2 shows the GHG abatement cost – from a fuel provider’s perspective – of
replacing transportation fuels with electricity as an energy source. Over the ranges of
gasoline prices and electricity rates ( which can vary depending on the time- of- use ( hourly
and seasonally)) that we examined, the abatement costs of using electricity are negative
( i. e., it is cheaper to provide electricity to replace gasoline fuels) in most cases. So long as
electricity rates were at or below $ 0.18/ kWh and $ 0.27/ kWh with petroleum prices at
$ 2.00 per gallon and $ 3.00 per gallon, respectively, the fuel providers’ LCFS compliance
cost by substituting electricity for petroleum use is below zero.
Many industrial electrification applications ( e. g., forklifts, ports, truckstops) may
predominantly charge during the night and therefore benefit from off- peak electricity
prices. Electric or plug- in light- duty vehicles, however, may be charging at both
residential and workplace locations ( if available), and thus be subject to variable and
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uncertain timing and electricity rates. In addition to time- of- day variation, seasonal,
sectoral ( residential, commercial, industrial), and usage- level differences also contribute
to variation in electricity rates. For the California electricity rates we examined ( ranging
from 13.3 ¢/ kWh in non- peak winter hours to 17.8 ¢/ kWh in peak summer hours) ( 37,
38), electricity is an advantageous replacement for gasoline, with - 230 to - 160 $/ tonne
CO2e for $ 3/ gge petroleum fuel and - 80 to 0 $/ tonne CO2e for $ 2/ gge petroleum fuel. If
electricity is produced from renewable sources, the carbon abatement costs are even more
advantageous than calculated above.
The above cost- effectiveness assessment from a fuel provider’s compliance perspective
excludes the equipment costs ( e. g., incremental vehicle costs for batteries, motors,
charging equipment for grid- connection- capable vehicles) and the consumer fuel- saving
impacts ( e. g., cost- per- mile reductions for consumers using electricity versus gasoline)
that would be critical for a broader, more inclusive cost- effectiveness assessment.
3. A Portfolio Scenario for Lower GHG Intensity
Acknowledging that challenges and uncertainties may be associated with drastic scale-up
of both the biofuel and battery electric- vehicle technologies, we analyze a scenario in
which both biofuels and electricity fuels contribute to compliance with the California
LCFS. Figure 3 shows the fuel use change ( million gge) from business- as- usual ( BAU) in
the portfolio scenario that achieves the 10%- AFCI reduction targets. The BAU scenario
incorporates California’s AB1493 ( Pavley), which requires a 30% reduction in GHG
emissions rate from new light- duty vehicles by 2016 ( 39). Conventional and advanced
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gasoline and hybrid electric vehicles are projected to be 90.7% of the total fleet in 2020,
with the rest being E85 flex- fuel vehicles ( 5.8%), diesel and diesel hybrid vehicles
( 3.2%), and plug- in, electric, and other vehicles ( 0.3%). The portfolio scenario assumes
that a mix of second- generation biofuels and advanced electric- vehicle technologies,
primarily HEVs, hybrid flex- fuel E85 vehicles, and PHEVs, will be needed by 2020.
Growth of PHEVs from 2010– 2020 would be slightly higher the current sales growth
trend of HEVs in California ( which is twice as high as the national average), reaching
20% of new vehicle sales and a total of 1.7 million PHEVs on the road by 2020. The total
electric vehicles would reach 49,000 by 2020. The combined electricity use from PHEV
and electric vehicles would reach 3,950 GWh/ yr and reduce 473 million gallons of
gasoline use by 2020. These PHEV and electric- vehicle penetration rates represent an
optimistic technology deployment. Other policies, such as California’s zero emission
vehicle ( ZEV) program, may provide additional incentives for adoption. In addition,
other electrification options listed in Table 2 can substitute PHEV and electric vehicles
and achieve the same desired outcome.
Total advanced ethanol use and renewable biodiesel use would reach 2.06 billion
gge/ yr ( bgge/ yr) and 0.73 bgge/ yr, respectively, by 2020. This level can vary because the
performance- based LCFS does not specify a minimum amount of energy that alternative
fuels must provide: the more low- GHG fuels used, the smaller quantity needed to meet
the target. Although this scenario was developed for a 10% reduction in both gasoline
and diesel types, trading between the two categories could result in differing levels of
compliance for each category – but with overall aggregate compliance remaining at 10%.
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4. Discussion
The portfolio scenario presented here is intended to illustrate the contribution of
alternative transportation fuels from a variety of possible pathways and the changes
needed to attain these targets. Although the portfolio scenario as well as biofuel and
electricity pathways are treated as feasible compliance strategies and analyzed as such,
many other technologies and fuels can significantly reduce transportation GHG
emissions. Fuels from other states or countries, such as sugarcane ethanol from Brazil,
can contribute toward meeting California’s LCFS. The methodology illustrated here does
not assert the carbon reduction benefits or costs of specific feedstock, which are subject
to uncertainties. Rather, we intended to demonstrate feasible pathways to meet a
performance- based LCFS based on the best available science. Our paper does not
explicitly address the sustainability issues except the consideration of carbon emissions
associated with land- use conversion due to the market- mediated effect. Ongoing work
elsewhere has begun to consider policy options to address the sustainability issues within
the LCFS ( 4, 40).
The implications of this study are broad. The European Union adopted the LCFS- like
Fuel Quality Directive on December 17, 2008 ( 23). The Canadian provinces of British
Columbia and Ontario, the 11 northeast and mid- Atlantic states, and the U. S. government
( e. g., the April 2009 Waxman- Markey bill) have all considered an LCFS ( 5). We
estimate that if the U. S. were to adopt an LCFS similar to California’s ( 10% AFCI
reduction by 2020), CO2e could be reduced roughly 251 million tonnes from its reference
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2020 emissions of 3.1 billion tonnes ( on a lifecycle- basis), whereas the biofuel mandate
in the Energy Independence and Security Act ( 41) would reduce the average transport-fuel
carbon intensity by 5% by 2020 and 6.3% by 2023 ( See the Supporting Information).
Even though more research is needed to carefully examine whether the 10% target by
2020 is feasible for the U. S., an LCFS provides a more flexible framework compared to
the RFS as it encourages the participation of other low- carbon fuels, such as electricity
and hydrogen, economically rewards the use of ultra- low carbon fuels, provides
flexibility by allowing companies to choose their own implementation strategy, and
encourages innovation by allowing companies to provide opt- in values for truly low-
GHG biofuels.
The success of the policy will also partly depend on consumers’ adoption of vehicles
and transportation applications that use alternative fuels. As with other biofuel programs,
the implementation of an LCFS also faces several key challenges, especially with regard
to sustainability, such as competition between biofuel crops and food crops for land and
water. Additional policies may be needed to address the sustainability issues ( 4, 40).
Acknowledgements
This research was supported by a contract with the California Air Resources Board and a
grant from the Energy Foundation and the Packard and Lucile Foundation. The authors
also acknowledge the support by the Sustainable Transportation Energy Pathways
( STEPS) program. The views and opinions expressed in this paper are those of the
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authors alone and do not necessarily represent those of any sponsoring organization or
outside reviewer.
Supporting Information Available
Detailed information on transportation fuel carbon intensity, the vehicle and fuel
assumptions, and GHG emission calculations for the California LCFS can be found in the
Supporting Information ( SI). The underlying assumptions of bioenergy conversion
technology and resulting supply curves of the WGA study are summarized in the SI. The
SI also includes a first- order calculation of a national LCFS. This material is available
free of charge via the Internet at http:// pubs. acs. org.
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Table 1. Potential resources and greenhouse gas reductions from use of biofuels in
California’s transportation sector.
Biofuel resources
Potential resource
level a ( million
gge/ yr)
GHG reduction b
( thousand
tonnes CO2e/ yr)
Percentage of
California LCFS
target for 2020
Corn 210 370 1.7%
LCE- Forest 250 2,230 11%
LCE- Orchard/ vineyard
waste
130 1,100 5%
LCE- Agricultural residue 51 450 2%
LCE- Municipal solid waste 440 3,880 18%
Subtotal - Gasoline
substitutes
1,080 8,040 39%
FAHC- Tallow 15 150 2%
FAHC- Grease 23 220 3%
FT- Municipal solid waste 450 4,400 65%
Subtotal - Diesel substitutes 490 4,760 71%
Resources
within
California
Total estimated biofuel
substitutes within
California
1,570 12,800 46%
Total estimated biofuel substitutes from
western U. S. states c
14,100 63,400 230%
2020 gasoline target d 21,200
2020 diesel target d 6,700
Total LCFS reduction target 27,900
Abbreviations: LCE= lignocellulosic ethanol; FAHC= fatty acid to hydrocarbon; FT= Fischer- Tropsch
a Based on Parker et al. ( 10).
b GHG emissions of 30, 46, and 42 gCO2e/ MJ from indirect land use change are added to corn ethanol,
Brazilian sugarcane ethanol, and soybean biodiesel, respectively, and 18 gCO2e/ MJ to energy crops.
c Includes 18 western states that are part of the WGA region of the U. S.
d Based on projected demand of 18.5 billion gge gasoline and gasoline substitutes and 5.4 billion gge
diesel and diesel substitutes in 2020. This estimate varies depending on the projections of fuel uses in the
BAU case and in the compliance scenario.
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Table 2. Potential applications and greenhouse gas reductions from replacing
transportation fuel with electricity.
Category Technology Scenario
Additional
electricity
use in 2020
a ( GWh/ yr)
Greenhouse gas
emission
reduction toward
LCFS b ( thousand
tonnes CO2e/ yr)
Calculated
Energy
Economy
Ratio
( EER) c
Light- duty
vehicles
Plug- in hybrid EVs
2.1 million new vehicles by
2020
4,750 1,070 3.7
Full- size, city, and
neighborhood BEVs
455k vehicles by 2020; ~ 20x
increase from expected 2010
990 240 4.1
Marine
Ports: cold ironing
( alternative marine
power)
115 new berths, 1200 new
vessels by 2020
1,770 330 to 770 2.5
Electrified
transportation
refrigeration units
( eTRUs)
29k units by 2020; ~ 7x
increase from expected 2010
76 14 to 130 2 to 6.4
Truck stop
electrification ( TSE)
35k spaces, 26k trucks by
2020; ~ 5x increase from
expected 2010
310 58 to 470 6
Transport
- non- road
Electric forklifts
( Classes 1- 3)
37k units by 2020; ~ 10x
increase from expected 2010
2,360 440 to 1090 2.3 to 3.8
Tow tractors /
industrial tugs
7k new units by 2020 140 26 to 240 6
Electric personnel
and burden carriers
13k new units by 2020 120 22 to 170 6
Turf trucks 27k new units by 2020 81 15 to 170 7
Miscellaneous
Electric sweepers/ scrubbers,
lawn and garden equipment,
golf carts, airport ground-support
equipment
410 76 to 900 6
Total - all applications 11,000 2,290 to 5,250 4.4 to 7.4
a Adapted from TIAX analyses ( 29, 42- 46).
b The range in GHG values is based on whether the GHG accounting of CARB ( lower values) or the TIAX
( higher value) is applied. ARB assigns EER = 3.0 for light/ medium- duty vehicles and 2.7 for heavy- duty
vehicles and off- road applications. We also assume an average California electricity carbon intensity of
124.1 gCO2e/ MJ ( 4).
c Calculated based on the estimated petroleum use reduction divided by the estimated electricity use
( converted to MJ/ yr) for off- road application for which ARB has not specifically developed EERs ( 29, 42-
46).
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Figure Captions
Figure 1. Fuel providers’ biofuel GHG compliance cost curves in California and from
western states at gasoline fuel costs of $ 2/ gge and $ 3/ gge ( production cost, excluding
distribution, marketing, and taxes).
Figure 2. Fuel providers’ abatement costs of reducing GHG emissions ($/ tonne CO2e)
with the use of electricity as a transportation energy source, as a function of electricity
rate and gasoline production costs.
Figure 3. Fuel use change ( million gge) between the business- as- usual ( BAU) and the
portfolio scenario.
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- 200
- 100
0
100
200
300
400
500
600
700
0 10 20 30 40 50 60 70
Compliance Cost- effectiveness for Fuel
Providers ($/ tonne CO2e)
Potential GHG Reductions ( million tonnes CO2 equivalent per year)
$ 3/ gal.
gasoline
Biofuels from
California
Biofuels from
western U. S. states
Reduction required to achieve
10% fuel carbon intensity
reduction in California
transportation fuels
$ 2/ gal.
gasoline
$ 3/ gal.
gasoline
$ 2/ gal.
gasoline
Figure 1.
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$ 0.09 $ 0.12 $ 0.15 $ 0.18 $ 0.21 $ 0.24 $ 0.27
$ 1.50
$ 2.00
$ 2.50
$ 3.00
$ 3.50
Average electricity rate ($/ kWh)
Petroleum price ($/ gge) .
$ 0 to $ 100/ tonne
Electricity- based compliance
strategies for GHG reductions are
advantageous for fuel providers
> -$ 300/ tonne
$ 100 to $ 200/ tonne
-$ 100 to $ 0/ tonne
-$ 300 to -$ 200/ tonne
-$ 200 to -$ 100/ tonne
Figure 2.
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- 1200
- 800
- 400
0
400
800
1200
2010 2012 2014 2016 2018 2020
Fuel use change from BAU ( million
gallons gasoline equivalent)
Year
Ethanol
Electricity
Diesel
Gasoline
Biodiesel
Figure 3.
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Phase II Project. TIAX LLC. 2007.
45. Rutherford, D.; Jackson, M. D. Transport Refrigeration Units' Cost Effectiveness.
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46. Rutherford, D.; Jackson, M. D. Truck Stop Electrification Cost Effectiveness.
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| Rating | |
| Title | Assessment of technologies for compliance with the low carbon fuel standard |
| Subject | Greenhouse gas mitigation--California.; Energy policy--California.; Motor fuels--Standards--California. |
| Description | Text document in PDF format.; Title from PDF title page (viewed on August 26, 2009).; "February 2009."; "Submitted to Environmental Science & Technology [as "Mitigation strategies to achieve the low carbon fuel standards]."; Includes bibliographical references (p. 26-32). |
| Creator | Yeh, Sonia. |
| Publisher | Institute of Transportation Studies, University of California, Davis |
| Contributors | Lutsey, Nicholas P.; Parker, Nathan C.; University of California, Davis. Institute of Transportation Studies. |
| Type | Text |
| Language | eng |
| Relation | http://worldcat.org/oclc/433609020/viewonline; http://pubs.its.ucdavis.edu/publication_detail.php?id=1271 |
| Title-Alternative | Assessment of technologies for compliance with the LCFS; Mitigation strategies to achieve the low carbon fuel standards |
| Date-Issued | [2009] |
| Format-Extent | 32 p. : digital, PDF file (291.46 KB) with col. charts. |
| Relation-Requires | Mode of access: World Wide Web. |
| Relation-Is Part Of | Research report ; UCD-ITS-RR-09-03; Research report (University of California, Davis. Institute of Transportation Studies) ; UCD-ITS-RR-09-03. |
| Transcript | Mitigation Strategies to Achieve the Low Carbon Fuel Standards Journal: Environmental Science & Technology Manuscript ID: es- 2009- 00262w. R1 Manuscript Type: Policy Analysis Date Submitted by the Author: Complete List of Authors: Yeh, Sonia; University of California, Davis, Institute of Transportation Studies Lutsey, Nicolas; University of California, Institute of Transportation Studies Parker, Nathan; University of California, Institute of Transportation Studies ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 Assessment of Technologies for Compliance with the Low Carbon Fuel Standard Sonia Yeh*, Nicholas P. Lutsey, and Nathan C. Parker Institute of Transportation Studies, University of California, Davis, One Shield Ave., Davis, CA 95616 Abstract California’s low carbon fuel standard ( LCFS) was designed to incentivize a diverse array of available strategies for reducing transportation greenhouse gas ( GHG) emissions. It provides strong incentives for fuels with lower GHG emissions, while explicitly requiring a 10% reduction in California’s transportation fuel GHG intensity by 2020. This paper investigates the potential for cost- effective GHG reductions from electrification and expanded use of biofuels. This analysis indicates that fuel providers could meet the standard using a portfolio approach that employs both biofuels and electricity, which would reduce the risks and uncertainties associated with the progress of cellulosic and battery technologies, feedstock prices, land availability, and the sustainability of the various compliance approaches. This research is based on the details of California’s development of an LCFS; however, this research approach could be generalizable to a national U. S. standard and to similar programs in Europe and Canada. * Corresponding author: slyeh@ ucdavis. edu, Tel: ( 530) 754 9000, Fax: ( 530) 752- 6572. Page 2 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 2 Keyword: Performance- based standard, carbon intensity, cost- effectiveness. Briefs: A low carbon fuel standard can stimulate innovation in alternative low- carbon fuel technologies that contribute toward climate mitigation and energy security goals in California by 2020. 1. Introduction The transportation sector is responsible for about 30% of U. S. and 40% of California’s greenhouse gas ( GHG) emissions and is growing faster than any other major economic sector. Transportation GHG emissions are primarily determined by vehicle efficiency, fuel GHG intensity, and vehicle travel demand. Whereas vehicle efficiency standards and vehicle travel demand reductions have often been addressed by government, the concept of a low carbon fuel standard ( LCFS), which specifically aims to reduce transportation fuels’ overall GHG emissions, is relatively novel. Economy- wide policies such as a moderate carbon cap- and- trade program are unlikely to induce significant GHG reductions from the transport sector, beyond efficiency improvement in the short- to medium- term ( 1- 3). By regulating the GHG content of transportation fuel, the LCFS can contribute to both GHG mitigation and energy security. Transportation fuel use in the U. S. is mostly comprised of fossil fuels, predominantly gasoline and diesel, which have high GHG emissions per unit of energy. Unlike the popular biofuel volumetric mandates or blend requirements, such as the Renewable Fuel Standard program in the U. S. and the Biofuel Directive in the European Union, an LCFS is a performance- based standard that seeks to gradually reduce the GHG intensity of transportation fuels. This paper analyzes Page 3 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 3 technologies that could be deployed to meet the requirements of California’s proposed LCFS. In California, Governor Schwarzenegger issued Executive Order S- 01- 07 in January 2007, which mandates a 10% reduction in lifecycle GHG intensity of transportation fuels by 2020. Lifecycle GHG intensity is defined as grams of carbon dioxide equivalent per megajoule of fuel energy ( gCO2e/ MJ). Aside from the predominant GHG emission – CO2 – other GHG emissions like methane ( CH4) and nitrous oxide ( N2O) are converted into their CO2 equivalent emissions according to their global warming potential. This measure captures all lifecycle emissions associated with fuels, including emissions from cultivation and extraction, pipeline transport, processing, conversion and production, distribution, and vehicle operation. California’s LCFS is the first major regulation of emissions based on lifecycle GHG emissions. It allows for the use of market- based emission- trading mechanisms for compliance, where companies can buy or sell credits with other regulated parties that are below or above their compliance obligations. Credits ( in million tonnes) are generated from fuels with lower carbon intensity than gasoline or diesel, the baseline fuels. All low- GHG transportation fuels, which may include low- GHG fossil fuels ( e. g., compressed natural gas, oil derived from tar sands with carbon capture and sequestration), biofuels ( e. g., ethanol, biodiesel), and other energy carriers ( e. g., electricity, hydrogen), can contribute to GHG emission reductions ( 4). The regulated parties of California’s LCFS are refiners, blenders, fuel producers, and importers. Aviation and maritime fuels are excluded because California has limited Page 4 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 4 authority over these areas. Theoretically, the regulated parties have many options to meet the standard. First, refiners can blend low- GHG biofuels, such as those derived from cellulose or waste streams, into gasoline or diesel. Second, fuel providers can sell alternative transport fuels such as high- level blends of biofuels ( e. g., ethanol blended in gasoline above 10% by volume, biodiesel in diesel above 20% by volume), compressed natural gas, electricity, and hydrogen fuels. And third, regulated parties can purchase credits from those regulated parties that are over- compliant, or they can apply credits that they banked in previous years. This hybrid of regulation and market mechanism can stimulate innovation and provide incentives for fuel providers to produce more low- GHG fuels at lower costs ( 5). The final rules of the California LCFS were adopted by the California Air Resources Board ( CARB) on April 23 2009 and will be implemented in January 2010 ( 4). Earlier work has focused on the conceptual policy design ( 6, 7) and rationale for a performance-based standard ( 5). This paper tackles the following questions: Are there enough low- GHG fuels available to meet the standard? How much production of in- state resources will be available or necessary to meet the LCFS? Given that the standard is flexible and designed to promote innovation, what are the likely competing technologies for compliance with the standard? What are the costs of compliance from fuel providers’ perspective? What are the incentives for lower- GHG fuels? Because of the known, large- scale applications and large GHG reduction potential before 2020, our evaluation focuses on biofuels ( i. e., ethanol and biodiesel) and Page 5 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 5 electricity. We first explore the biofuel resource and GHG reduction potential in California and in the western U. S. states and the potential electrification applications to replace transportation fuels ( Section 2). We also estimate the cost- effectiveness of compliance strategies for the regulated parties. In Section 3, we propose a possible portfolio- based scenario utilizing both biofuels and electricity to achieve the LCFS targets. We discuss future research needs and the implication for a national LCFS in Section 4. 2. Resource Potentials: Biofuel and Electricity 2.1 The Design of the LCFS In California’s LCFS, the baseline transportation fuels ( gasoline and diesel) and their alternatives have been assigned “ carbon intensity” ( CI) ratings ( gCO2e/ MJ) based on lifecycle GHG intensity, adjusted for associated vehicle drive- train efficiency over conventional gasoline- engine vehicles ( 4). California adopted the default and opt- in approach, adapted from the United Kingdom’s Renewable Transport Fuel Obligation ( RTFO), which allows companies to “ opt in” a lower CI value if they can provide evidence that the fuel they produce has a significantly lower GHG intensity than the default value. California’s LCFS has two regulated fuel types – gasoline and gasoline substitutes, and diesel and diesel substitutes – and the average fuel carbon intensity ( AFCI) of each fuel type is required to be 10% lower by 2020. Excess emission credits can be traded between these two targets ( 4). It is expected that in 2010, the reference year for California’s LCFS, GHG emission from the use of transportation fuels will be 267 Page 6 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 6 million tonnes CO2e/ yr ( on a lifecycle basis), of which 76% will come from gasoline fuel, 6% from corn ethanol, and 17% from diesel. We first examine the resources available in California and other western U. S. states to increase deployment of low- GHG biofuels. Second, we consider the potential of utilizing electricity to displace conventional transportation fuels. Third, in Section 2.4, we discuss the GHG reduction cost- effectiveness of the two pathways. 2.2 GHG Reduction through Expanded Biofuel Use We evaluate resource availability and explore the potential GHG emission reduction from biofuels, based on the work recently published by University of California, Davis researchers and collaborators for the Western Governors’ Association ( WGA) ( 8- 10). The researchers use a Geographic Information System ( GIS) modeling approach in conjunction with a full supply- chain optimization model to develop a set of biofuel supply curves by feedstock within the WGA region, which covers the 18 western U. S. states with an eastern border from Texas in the south to North Dakota in the north. The methodology and results of the study are described in detail in Parker et al. ( 10). The study concluded that biofuels produced from resources in the Western states by 2015 could provide between 5% and 10% of the projected transportation fuel demand in the region at a price between $ 2.40 and $ 3.00 per gasoline gallon equivalent ( gge), excluding local distribution and marketing costs and taxes. These fuels will rely on a diverse resource base with significant contributions from municipal solid waste, agricultural residue, herbaceous energy crop, forest thinning, corn, and tallow resources. The study Page 7 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 7 attempted to characterize the best available knowledge on biofuel technologies and feedstock supply. However, major uncertainties remain including the economic performance of the different conversion technologies, the adequacy of the supporting feedstock and biofuel delivery infrastructure, and the added costs for biomass feedstocks to meet sustainability requirements. Table 1 shows the potential for biofuel production to contribute toward compliance with the LCFS. Parker et al. ( 10) estimated that the western states have biofuel potential total of 14 billion gge per year ( equivalent to approximately 20 billion volumetric gallons of biofuel). Recent studies have shown that massive consumption of biofuels in the U. S. could lead to expansion of farm lands throughout the world, at the expense of other crop lands and non- crop lands such as forest lands and grass lands ( 11- 13). Moreover, when lands with rich soil and biomass carbon deposits are initially converted to agricultural production, a large amount of carbon is emitted. This initial “ carbon debt” can take years or even decades of cultivation to pay back ( 14- 16). The conversion of land, induced by market- mediated effect, can be direct or indirect. The indirect effect, or indirect land use change ( iLUC), represents the overall impacts from an increased demand for crop- based biofuel production, leading to both extensification ( expansion of cultivated land area) and intensification ( increasing inputs to increase yields) of agriculture that would not occur in the absence of biofuels production. Extensification modifies global land forms ( e. g., farmland, forest, marginal lands) and their carbon stocks. These iLUC effects, which cannot be empirically Page 8 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 8 observed, are estimated from global land use models ( 17- 19) and can potentially be mitigated by policy responses ( 20). Attempting to determine the magnitude of the overall market- mediated impact on GHG emissions per MJ of particular biofuels is an intense research area ( 21, 22) but is beyond the scope of this study. Instead we adopt the preliminary iLUC values proposed by CARB for food crop- based biofuels including corn ethanol, Brazilian sugarcane ethanol, and biodiesel from soybean and for energy crops as placeholders to capture the possible iLUC effects on the lifecycle GHG emissions of biofuels ( 4). These placeholders are meant to reflect the consensus that reliance on food crop- based biofuels would have large iLUC effects; energy crop- based biofuels would have more moderate effects; and biofuels from waste streams, agricultural residue, algae, or biomass crops grown on degraded lands would have negligible effects ( 23). The estimated total GHG reduction ( in million tonnes CO2e per year) is calculated based on the potential biofuel resources by feedstock ( in MJ/ yr, converted from gge/ yr) and multiplied by the difference between the biofuel and the reference fuel GHG intensity levels ( gCO2e/ MJ/ 10 6 ). Fuel providers can use biofuels produced elsewhere, including imports, but the analysis here suggests sufficient quantity of biofuels within the western region to achieve the LCFS carbon reduction target. We found that by including gasoline and diesel fuels together, an estimated 46% of the targeted GHG reduction could be met with California- grown fuels. When the potential biofuel production of all the western states is considered, the potential GHG reduction is equivalent to over twice the targeted California LCFS emission reduction ( Table 1). Page 9 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 9 2.3 GHG Emissions Reduction from Using Electricity- Fuel There are numerous ways in which electricity generation can be used as an energy source to supplant transportation fuels. Applications for electrification in light- duty vehicles include plug- in hybrid electric vehicles ( PHEVs) and full battery electric vehicles ( BEVs or EVs). In heavy- duty truck applications, electrification includes the plugging in of long- haul Class 8 trucks that would otherwise idle their main propulsion engines to power accessories in the truck cabin. Another option is to use electrified transport refrigeration units ( TRUs) to power the refrigeration cycle for the cooling of cargo space, rather than TRUs powered by diesel- fueled engines. There can also be electrification at ports and in non- road engines, including in industrial ( e. g., forklifts) and in smaller ( e. g., lawn and garden equipment) applications. Because electricity used in vehicle technologies is typically more efficient than gasoline or diesel, CARB has assigned proposed “ default” energy economy ratio ( EER) values for PHEVs, BEVs, and other onroad and offroad electrification. The EER is defined as “ the ratio of the number of miles driven per unit energy consumed for a fuel of interest to the miles driven per unit energy for a reference fuel” ( 4). The total GHG reduction is estimated based on the following equation: ( ) 2 tonnes CO e GHG reduction ( ) gram CO e tonne CO e EER CI Q CI Q elc Ref Ref elc 2 6 2 10 1 ⋅ = ⋅ − ⋅ ( Equation 1) where: Q Ref = Quantity reduction of reference fuel, gasoline or diesel ( MJ/ yr) Q elc = Quantity increase of electricity use ( MJ/ yr) CI Ref = Fuel carbon intensity of reference fuel ( gCO2e/ MJ) Page 10 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 10 CI elc = Fuel carbon intensity of electricity ( gCO2e/ MJ) EERi = Energy Economy Ratio ( dimensionless) The PHEVs, which can use both grid- supplied electricity and liquid fuels, offer substantial potential GHG emission reductions ( 24- 27). Based on a widely cited Electric Power Research Institute ( EPRI) study, PHEV20 ( those vehicles with a battery capacity of 20 miles of all- electric range) efficiency when in all- electric ( i. e., “ charge- depleting”) mode is about 4.3 miles/ kWh for a compact car and 2.6 miles/ kWh for a mid- size sport utility vehicle ( 24). Over the lifecycle, the use of electricity in light- duty vehicles offers an estimated 57– 64% improvement in carbon intensity over gasoline fuel. This improvement is based on 35– 41 gCO2e/ MJ for electricity ( after EER adjustment) for average and marginal additions to the California grid electricity mix ( which is 43% natural gas, 27% renewable, 15% nuclear, 15% coal) ( 4, 28), compared to 96 gCO2e/ MJ for gasoline. A summary of potential applications for expanded use of electricity to supplant higher carbon fuels is shown in Table 2. Of the electricity applications investigated here, PHEVs and forklifts offer the greatest potential for decreased GHG emissions. The PHEV category includes 90% PHEV20 ( which are assumed to cover 36% of their distance in all- electric mode) and 10% PHEV40 ( 64% all- electric mileage) ( 24). Electrification of truckstops and marine ports also offer relatively high potential GHG reductions. Together, the electrification actions examined here would equate to a 2.3 to 5.3 million tonnes CO2e, an 8% to 19% contribution toward the total required LCFS target for 2020. Page 11 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 11 Based on estimates from the full use of all the electrification applications from Table 2, these new electric demands could result in an additional 2 GW of “ summer peak load before mitigation” ( 29). The required amount of annual electricity usage ( about 11 TWh/ yr) and peak capacity increase ( about 2 GW) are 3– 4% of the California electricity demand and peak capacity, respectively. Provided that peak- time charging is avoided, several million PHEVs could be deployed in California without requiring new generation capacity ( 30). However, issues related to the future grid capacity, the specific charge timing of the different electric applications, and the local distribution network would need to be examined. 2.4 Cost- effectiveness of Compliance from Fuel Providers’ Perspective The “ cost- effectiveness” of compliance is defined as the relative cost of the alternative fuel compared with reference petroleum, per amount of GHG abatement. For the same level of abatement cost, it is more cost- effective ( i. e., lower cost per tonne of GHG reduction) to adopt measures that achieve higher GHG reductions. A performance- based LCFS provides higher economic incentives ( i. e., lower abatement cost per tonne of CO2e reduction) for lower- GHG fuels than for fuels that have only marginal GHG reduction potential. A cost- effectiveness ratio that is below zero would deliver a net financial benefit while reducing GHG emissions. This is consistent with several studies on lower GHG technologies ( see, e. g., ( 31)). The cost- effectiveness of any expansion of the use of alternative fuels for transportation, from the perspective of fuel providers, is subject to the uncertainties of the prices of the biomass feedstocks, the cost of electricity, and the costs of competing Page 12 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 12 petroleum products. We compare the costs of the biofuels and electricity against petroleum costs of $ 2 and $ 3 per gge ( crude and refining cost, excluding distribution, marketing, and taxes, which add another 50– 70 cents) to estimate the cost- effectiveness of utilizing these two abatement strategies to reduce the GHG emission contribution of transportation fuels under an LCFS. The finished gasoline production cost of $ 2.00/ gge corresponds to about $ 2.60/ gge retail in California and roughly $ 60 per barrel at the world oil price. The GHG- reduction cost- effectiveness of compliance is calculated by the following equation: ( ) ( ) tonne CO e gram CO e CI CI EER Cost EER Cost tonne CO e Cost effectiveness f LCF LCF Ref 2 2 6 2 Re 1 10 / / ($ / ) ⋅ − − = ( Equation 2) where: Cost Ref = Cost of reference fuel, gasoline or diesel ($/ MJ) Cost LCF = Cost of low carbon fuel ($/ MJ) CI Ref = Fuel carbon intensity of reference fuel ( gCO2e/ MJ) CI LCF = Fuel carbon intensity of low carbon fuel ( gCO2e/ MJ) EERi = Energy Economy Ratio ( dimensionless) 2.4.1 Cost- Effectiveness of Compliance Using Biofuels The cost- effectiveness of biofuels is determined by the cost difference between the production cost of biofuels ( based on the WGA study ( 8- 10)) and the production costs of reference petroleum fuels, divided by the resulting emission reduction from the use of the alternative fuels for a fixed amount of energy required by vehicles. For example, at a price difference of $ 0.50/ gge between the gasoline fuel and the biofuels, the compliance costs are $ 276/ tonne CO2e for today’s low- GHG corn ethanol ( CI = 80.7 gCO2e/ MJ Page 13 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 13 including indirect emissions of 30 gCO2e/ MJ ( 32)) versus $ 57/ tonne CO2e for cellulosic biofuel from forest waste ( CI = 22.2 gCO2e/ MJ). Figure 1 shows fuel providers’ GHG-reduction compliance cost curves for biofuels produced in California and from the western states. Based on the cost assumptions presented in Parker et al. ( 10), an 18– 50 million tonnes CO2e reduction ( 63– 180% of the target LCFS reduction) could be met at a cost less than or comparable to that of conventional petroleum fuels at $ 2 to $ 3 per gallon ( or $ 2.6 to $ 3.6 per gallon including distribution, marketing, and taxes). Even though the estimated costs of LCFS compliance for the regulated parties range from - 125 to 24 $/ tonne CO2e depending on the assumptions of gasoline and diesel costs, there are significant uncertainties associated with technologies, feedstock costs, and infrastructure availability, as well the environmental impacts of large- scale biofuel feedstock production such as excess nitrous oxide emissions, feedstock water use, and water pollution ( 33). The CO2e compliance cost curves depend critically on many cost assumptions, including those related to the costs of feedstock and production. The biomass feedstock and production costs are based on engineering cost estimates ( 10) that do not account for more dynamic market effects. Many reasons might explain higher prices of feedstock and production costs. For example, the increased demand for corn ethanol contributed to increased corn prices in the U. S. from 2006 to summer of 2008, when high oil prices, government subsidies, and industry growth made corn ethanol a cost- competitive substitute for gasoline. High oil prices also increase the costs of fertilizer and energy. In reality, the actual supply curves are likely to start from lower feedstock costs when biofuel demands are lower and to move toward higher feedstock Page 14 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 14 and production costs as demand for biofuel increases. The resource supply curves presented here also assume production cost at significant economies of scale, although experience suggests that the cost at the beginning of production is likely to be higher due to technology uncertainties and the lack of economy of scale ( 34, 35). 2.4.2 Cost- Effectiveness of Compliance Using Electricity We calculate the cost- effectiveness of compliance of electricity use strictly from a fuel provider’s perspective. The cost- effectiveness from a vehicle user’s perspective, which would also account for the additional cost of batteries and other electric components, has been addressed in many studies [ e. g., ( 24, 36)] and is outside the scope of this study. Figure 2 shows the GHG abatement cost – from a fuel provider’s perspective – of replacing transportation fuels with electricity as an energy source. Over the ranges of gasoline prices and electricity rates ( which can vary depending on the time- of- use ( hourly and seasonally)) that we examined, the abatement costs of using electricity are negative ( i. e., it is cheaper to provide electricity to replace gasoline fuels) in most cases. So long as electricity rates were at or below $ 0.18/ kWh and $ 0.27/ kWh with petroleum prices at $ 2.00 per gallon and $ 3.00 per gallon, respectively, the fuel providers’ LCFS compliance cost by substituting electricity for petroleum use is below zero. Many industrial electrification applications ( e. g., forklifts, ports, truckstops) may predominantly charge during the night and therefore benefit from off- peak electricity prices. Electric or plug- in light- duty vehicles, however, may be charging at both residential and workplace locations ( if available), and thus be subject to variable and Page 15 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 15 uncertain timing and electricity rates. In addition to time- of- day variation, seasonal, sectoral ( residential, commercial, industrial), and usage- level differences also contribute to variation in electricity rates. For the California electricity rates we examined ( ranging from 13.3 ¢/ kWh in non- peak winter hours to 17.8 ¢/ kWh in peak summer hours) ( 37, 38), electricity is an advantageous replacement for gasoline, with - 230 to - 160 $/ tonne CO2e for $ 3/ gge petroleum fuel and - 80 to 0 $/ tonne CO2e for $ 2/ gge petroleum fuel. If electricity is produced from renewable sources, the carbon abatement costs are even more advantageous than calculated above. The above cost- effectiveness assessment from a fuel provider’s compliance perspective excludes the equipment costs ( e. g., incremental vehicle costs for batteries, motors, charging equipment for grid- connection- capable vehicles) and the consumer fuel- saving impacts ( e. g., cost- per- mile reductions for consumers using electricity versus gasoline) that would be critical for a broader, more inclusive cost- effectiveness assessment. 3. A Portfolio Scenario for Lower GHG Intensity Acknowledging that challenges and uncertainties may be associated with drastic scale-up of both the biofuel and battery electric- vehicle technologies, we analyze a scenario in which both biofuels and electricity fuels contribute to compliance with the California LCFS. Figure 3 shows the fuel use change ( million gge) from business- as- usual ( BAU) in the portfolio scenario that achieves the 10%- AFCI reduction targets. The BAU scenario incorporates California’s AB1493 ( Pavley), which requires a 30% reduction in GHG emissions rate from new light- duty vehicles by 2016 ( 39). Conventional and advanced Page 16 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 16 gasoline and hybrid electric vehicles are projected to be 90.7% of the total fleet in 2020, with the rest being E85 flex- fuel vehicles ( 5.8%), diesel and diesel hybrid vehicles ( 3.2%), and plug- in, electric, and other vehicles ( 0.3%). The portfolio scenario assumes that a mix of second- generation biofuels and advanced electric- vehicle technologies, primarily HEVs, hybrid flex- fuel E85 vehicles, and PHEVs, will be needed by 2020. Growth of PHEVs from 2010– 2020 would be slightly higher the current sales growth trend of HEVs in California ( which is twice as high as the national average), reaching 20% of new vehicle sales and a total of 1.7 million PHEVs on the road by 2020. The total electric vehicles would reach 49,000 by 2020. The combined electricity use from PHEV and electric vehicles would reach 3,950 GWh/ yr and reduce 473 million gallons of gasoline use by 2020. These PHEV and electric- vehicle penetration rates represent an optimistic technology deployment. Other policies, such as California’s zero emission vehicle ( ZEV) program, may provide additional incentives for adoption. In addition, other electrification options listed in Table 2 can substitute PHEV and electric vehicles and achieve the same desired outcome. Total advanced ethanol use and renewable biodiesel use would reach 2.06 billion gge/ yr ( bgge/ yr) and 0.73 bgge/ yr, respectively, by 2020. This level can vary because the performance- based LCFS does not specify a minimum amount of energy that alternative fuels must provide: the more low- GHG fuels used, the smaller quantity needed to meet the target. Although this scenario was developed for a 10% reduction in both gasoline and diesel types, trading between the two categories could result in differing levels of compliance for each category – but with overall aggregate compliance remaining at 10%. Page 17 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 17 4. Discussion The portfolio scenario presented here is intended to illustrate the contribution of alternative transportation fuels from a variety of possible pathways and the changes needed to attain these targets. Although the portfolio scenario as well as biofuel and electricity pathways are treated as feasible compliance strategies and analyzed as such, many other technologies and fuels can significantly reduce transportation GHG emissions. Fuels from other states or countries, such as sugarcane ethanol from Brazil, can contribute toward meeting California’s LCFS. The methodology illustrated here does not assert the carbon reduction benefits or costs of specific feedstock, which are subject to uncertainties. Rather, we intended to demonstrate feasible pathways to meet a performance- based LCFS based on the best available science. Our paper does not explicitly address the sustainability issues except the consideration of carbon emissions associated with land- use conversion due to the market- mediated effect. Ongoing work elsewhere has begun to consider policy options to address the sustainability issues within the LCFS ( 4, 40). The implications of this study are broad. The European Union adopted the LCFS- like Fuel Quality Directive on December 17, 2008 ( 23). The Canadian provinces of British Columbia and Ontario, the 11 northeast and mid- Atlantic states, and the U. S. government ( e. g., the April 2009 Waxman- Markey bill) have all considered an LCFS ( 5). We estimate that if the U. S. were to adopt an LCFS similar to California’s ( 10% AFCI reduction by 2020), CO2e could be reduced roughly 251 million tonnes from its reference Page 18 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 18 2020 emissions of 3.1 billion tonnes ( on a lifecycle- basis), whereas the biofuel mandate in the Energy Independence and Security Act ( 41) would reduce the average transport-fuel carbon intensity by 5% by 2020 and 6.3% by 2023 ( See the Supporting Information). Even though more research is needed to carefully examine whether the 10% target by 2020 is feasible for the U. S., an LCFS provides a more flexible framework compared to the RFS as it encourages the participation of other low- carbon fuels, such as electricity and hydrogen, economically rewards the use of ultra- low carbon fuels, provides flexibility by allowing companies to choose their own implementation strategy, and encourages innovation by allowing companies to provide opt- in values for truly low- GHG biofuels. The success of the policy will also partly depend on consumers’ adoption of vehicles and transportation applications that use alternative fuels. As with other biofuel programs, the implementation of an LCFS also faces several key challenges, especially with regard to sustainability, such as competition between biofuel crops and food crops for land and water. Additional policies may be needed to address the sustainability issues ( 4, 40). Acknowledgements This research was supported by a contract with the California Air Resources Board and a grant from the Energy Foundation and the Packard and Lucile Foundation. The authors also acknowledge the support by the Sustainable Transportation Energy Pathways ( STEPS) program. The views and opinions expressed in this paper are those of the Page 19 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 19 authors alone and do not necessarily represent those of any sponsoring organization or outside reviewer. Supporting Information Available Detailed information on transportation fuel carbon intensity, the vehicle and fuel assumptions, and GHG emission calculations for the California LCFS can be found in the Supporting Information ( SI). The underlying assumptions of bioenergy conversion technology and resulting supply curves of the WGA study are summarized in the SI. The SI also includes a first- order calculation of a national LCFS. This material is available free of charge via the Internet at http:// pubs. acs. org. Page 20 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 20 Table 1. Potential resources and greenhouse gas reductions from use of biofuels in California’s transportation sector. Biofuel resources Potential resource level a ( million gge/ yr) GHG reduction b ( thousand tonnes CO2e/ yr) Percentage of California LCFS target for 2020 Corn 210 370 1.7% LCE- Forest 250 2,230 11% LCE- Orchard/ vineyard waste 130 1,100 5% LCE- Agricultural residue 51 450 2% LCE- Municipal solid waste 440 3,880 18% Subtotal - Gasoline substitutes 1,080 8,040 39% FAHC- Tallow 15 150 2% FAHC- Grease 23 220 3% FT- Municipal solid waste 450 4,400 65% Subtotal - Diesel substitutes 490 4,760 71% Resources within California Total estimated biofuel substitutes within California 1,570 12,800 46% Total estimated biofuel substitutes from western U. S. states c 14,100 63,400 230% 2020 gasoline target d 21,200 2020 diesel target d 6,700 Total LCFS reduction target 27,900 Abbreviations: LCE= lignocellulosic ethanol; FAHC= fatty acid to hydrocarbon; FT= Fischer- Tropsch a Based on Parker et al. ( 10). b GHG emissions of 30, 46, and 42 gCO2e/ MJ from indirect land use change are added to corn ethanol, Brazilian sugarcane ethanol, and soybean biodiesel, respectively, and 18 gCO2e/ MJ to energy crops. c Includes 18 western states that are part of the WGA region of the U. S. d Based on projected demand of 18.5 billion gge gasoline and gasoline substitutes and 5.4 billion gge diesel and diesel substitutes in 2020. This estimate varies depending on the projections of fuel uses in the BAU case and in the compliance scenario. Page 21 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 21 Table 2. Potential applications and greenhouse gas reductions from replacing transportation fuel with electricity. Category Technology Scenario Additional electricity use in 2020 a ( GWh/ yr) Greenhouse gas emission reduction toward LCFS b ( thousand tonnes CO2e/ yr) Calculated Energy Economy Ratio ( EER) c Light- duty vehicles Plug- in hybrid EVs 2.1 million new vehicles by 2020 4,750 1,070 3.7 Full- size, city, and neighborhood BEVs 455k vehicles by 2020; ~ 20x increase from expected 2010 990 240 4.1 Marine Ports: cold ironing ( alternative marine power) 115 new berths, 1200 new vessels by 2020 1,770 330 to 770 2.5 Electrified transportation refrigeration units ( eTRUs) 29k units by 2020; ~ 7x increase from expected 2010 76 14 to 130 2 to 6.4 Truck stop electrification ( TSE) 35k spaces, 26k trucks by 2020; ~ 5x increase from expected 2010 310 58 to 470 6 Transport - non- road Electric forklifts ( Classes 1- 3) 37k units by 2020; ~ 10x increase from expected 2010 2,360 440 to 1090 2.3 to 3.8 Tow tractors / industrial tugs 7k new units by 2020 140 26 to 240 6 Electric personnel and burden carriers 13k new units by 2020 120 22 to 170 6 Turf trucks 27k new units by 2020 81 15 to 170 7 Miscellaneous Electric sweepers/ scrubbers, lawn and garden equipment, golf carts, airport ground-support equipment 410 76 to 900 6 Total - all applications 11,000 2,290 to 5,250 4.4 to 7.4 a Adapted from TIAX analyses ( 29, 42- 46). b The range in GHG values is based on whether the GHG accounting of CARB ( lower values) or the TIAX ( higher value) is applied. ARB assigns EER = 3.0 for light/ medium- duty vehicles and 2.7 for heavy- duty vehicles and off- road applications. We also assume an average California electricity carbon intensity of 124.1 gCO2e/ MJ ( 4). c Calculated based on the estimated petroleum use reduction divided by the estimated electricity use ( converted to MJ/ yr) for off- road application for which ARB has not specifically developed EERs ( 29, 42- 46). Page 22 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 22 Figure Captions Figure 1. Fuel providers’ biofuel GHG compliance cost curves in California and from western states at gasoline fuel costs of $ 2/ gge and $ 3/ gge ( production cost, excluding distribution, marketing, and taxes). Figure 2. Fuel providers’ abatement costs of reducing GHG emissions ($/ tonne CO2e) with the use of electricity as a transportation energy source, as a function of electricity rate and gasoline production costs. Figure 3. Fuel use change ( million gge) between the business- as- usual ( BAU) and the portfolio scenario. Page 23 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 23 - 200 - 100 0 100 200 300 400 500 600 700 0 10 20 30 40 50 60 70 Compliance Cost- effectiveness for Fuel Providers ($/ tonne CO2e) Potential GHG Reductions ( million tonnes CO2 equivalent per year) $ 3/ gal. gasoline Biofuels from California Biofuels from western U. S. states Reduction required to achieve 10% fuel carbon intensity reduction in California transportation fuels $ 2/ gal. gasoline $ 3/ gal. gasoline $ 2/ gal. gasoline Figure 1. Page 24 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 24 $ 0.09 $ 0.12 $ 0.15 $ 0.18 $ 0.21 $ 0.24 $ 0.27 $ 1.50 $ 2.00 $ 2.50 $ 3.00 $ 3.50 Average electricity rate ($/ kWh) Petroleum price ($/ gge) . $ 0 to $ 100/ tonne Electricity- based compliance strategies for GHG reductions are advantageous for fuel providers > -$ 300/ tonne $ 100 to $ 200/ tonne -$ 100 to $ 0/ tonne -$ 300 to -$ 200/ tonne -$ 200 to -$ 100/ tonne Figure 2. Page 25 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 25 - 1200 - 800 - 400 0 400 800 1200 2010 2012 2014 2016 2018 2020 Fuel use change from BAU ( million gallons gasoline equivalent) Year Ethanol Electricity Diesel Gasoline Biodiesel Figure 3. Page 26 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 26 References 1. Yeh, S.; Farrell, A.; Plevin, R.; Sanstad, A.; Weyant, J. Optimizing U. S. mitigation strategies for the light- duty transportation sector: what we learn from a bottom- up model. Environmental Science & Technology 2008, 42 ( 22), 8202– 8210. 2. EIA. 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Page 32 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 32 44. Rutherford, D.; Jackson, M. D. PHEV Cost Effectiveness. CalETC Electric Drive Phase II Project. TIAX LLC. 2007. 45. Rutherford, D.; Jackson, M. D. Transport Refrigeration Units' Cost Effectiveness. CalETC Electric Drive Phase II Project. TIAX LLC. 2007. 46. Rutherford, D.; Jackson, M. D. Truck Stop Electrification Cost Effectiveness. CalETC Electric Drive Phase II Project. TIAX LLC. 2007. Page 33 of 33 ACS Paragon Plus Environment Submitted to Environmental Science & Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 |
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