On September 27, 2018, the California Air Resources Board (CARB) passed Resolution 18-34, extending the Low Carbon Fuel Standard (LCFS) Program to 2030 and making significant changes to the design and implementation of the Program. This blog outlines seven takeaways for market participants and stakeholders.
1. CARB Appears Committed to the LCFS
While California’s Cap-and-Trade Program attracts the lion’s share of attention in the trade press, CARB may view the LCFS as an equally important greenhouse gas (GHG) emissions reduction measure. According to CARB, the Cap-and-Trade Program’s traditional role in the state’s overarching scheme has been to backstop GHG reductions, not drive them. Under this interpretation, the Cap-and-Trade Program has acted as an insurance policy guaranteeing the state’s GHG emissions reduction trajectory via operation of the program’s hard cap in the event that other, more direct emissions reduction measures fail to achieve expected reductions (e.g., the Renewables Portfolio Standard, Advanced Clean Car Standards, Title 24 Energy Efficiency Standards, the LCFS, etc.).