CARB addresses California’s increasingly severe climate impacts.

By Joshua T. Bledsoe and Kevin Homrighausen

On May 10, 2022, the California Air Resources Board (CARB) released its Draft 2022 Scoping Plan Update (Draft Scoping Plan) for public review and comment. Assembly Bill 32, the California Global Warming Solutions Act of 2006, requires CARB to develop and update every five years a scoping plan that describes the approach California will take to reduce greenhouse gas (GHG) emissions to achieve the goal of reducing emissions to 1990 levels by 2020. Senate Bill 32 subsequently strengthened the state’s GHG emissions reductions target to at least 40% below 1990 levels by 2030.

Latham & Watkins’ first post in this series discusses CARB’s Proposed Scenario to achieve the state’s GHG targets, which adopts a carbon neutrality target for 2045. The second post discusses how the Cap-and-Trade Program features in the Draft Scoping Plan. The third post discussed how California’s Low Carbon Fuel Standard (LCFS) Program factors into the state’s GHG reduction goals and how the LCFS Program may be amended in the near future. This fourth and final post describes how the Draft Scoping Plan responds to some of California’s most significant climate impacts, like wildfires, drought, and extreme heat.

CARB addresses California’s increasingly severe climate impacts.

By Joshua T. Bledsoe and Kevin Homrighausen

On May 10, 2022, the California Air Resources Board (CARB) released its Draft 2022 Scoping Plan Update (Draft Scoping Plan) for public review and comment. Assembly Bill 32, the California Global Warming Solutions Act of 2006, requires CARB to develop and update every five years a scoping plan that describes the approach California will take to reduce greenhouse gas (GHG) emissions to achieve the goal of reducing emissions to 1990 levels by 2020. Senate Bill 32 subsequently strengthened the state’s GHG emissions reductions target to at least 40% below 1990 levels by 2030.

Latham & Watkins’ first post in this series discusses CARB’s Proposed Scenario to achieve the state’s GHG targets, which adopts a carbon neutrality target for 2045. The second post discusses how the Cap-and-Trade Program features in the Draft Scoping Plan. The third post discussed how California’s Low Carbon Fuel Standard (LCFS) Program factors into the state’s GHG reduction goals and how the LCFS Program may be amended in the near future. This fourth and final post describes how the Draft Scoping Plan responds to some of California’s most significant climate impacts, like wildfires, drought, and extreme heat.

CARB doubles down on LCFS Program and liquid transportation fuels.

By Joshua T. Bledsoe and Jennifer Garlock

On May 10, 2022, the California Air Resources Board (CARB) released its Draft 2022 Scoping Plan Update (Draft Scoping Plan) for public review and comment. Assembly Bill (AB) 32, the California Global Warming Solutions Act of 2006 (AB 32), requires CARB to develop and update every five years a scoping plan that describes the approach California will take to reduce greenhouse gas (GHG) emissions to achieve the goal of reducing emissions to 1990 levels by 2020. Senate Bill (SB) 32 subsequently strengthened the state’s GHG emissions reductions target to at least 40% below 1990 levels by 2030. Our first post in this series discusses CARB’s Proposed Scenario to achieve the state’s GHG targets, which adopts a carbon neutrality target for 2045. Our second post explores how the Cap-and-Trade Program features in the Draft Scoping Plan. In this third post, we examine how California’s Low Carbon Fuel Standard (LCFS) Program factors into the state’s GHG reduction goals and how the LCFS Program may be amended in the near future. The Draft Scoping Plan states that CARB will initiate a rulemaking on the LCFS to ensure it continues to support low-carbon fuels that will displace petroleum fuels.[1]

The Draft 2022 Scoping Plan Update takes an all-of-the-above approach to decarbonize California.

By Joshua T. Bledsoe and Brian McCall

On May 10, 2022, the California Air Resources Board (CARB) released its Draft 2022 Scoping Plan Update for public review and comment. Originally, the California Global Warming Solutions Act of 2006 required CARB to develop a scoping plan, to be updated every five years, that describes the approach California will take to reduce Greenhouse Gas (GHG) emissions to achieve the goal of reducing emissions to 1990 levels by 2020.

Subsequently, Senate Bill 32 strengthened the state’s GHG emissions reductions target to at least 40% below 1990 levels by 2030 and former Governor Jerry Brown’s Executive Order B-55-18 established a second statewide goal to achieve carbon neutrality as soon as possible, and no later than 2045. Recognizing the need to achieve GHG emissions reductions more quickly, in July 2021, Governor Gavin Newsom directed CARB to accelerate efforts to achieve the state’s climate stabilization and GHG reduction goals, including to “identify a pathway for achieving carbon neutrality a full decade earlier than the existing target of 2045.” The Draft Scoping Plan Update identifies CARB’s proposed path for how California can reach both its interim goal of reducing GHGs by at least 40% below 1990 levels by 2030, and its ultimate goal of carbon neutrality by 2045 along with pathways that would achieve carbon neutrality by 2035.

The program will include a multi-jurisdictional cap-and-invest program and aims to address environmental justice and equity concerns.

By Jean-Philippe Brisson, Joshua T. Bledsoe, Benjamin Einhouse, and Brian McCall

On December 21, 2020, the Governors of Massachusetts, Rhode Island, and Connecticut, as well as the Mayor of the District of Columbia, announced that their respective jurisdictions would establish the Transportation & Climate Initiative Program (TCI-P) and released a memorandum of understanding (MOU) describing the agreed-upon principles for adoption and implementation of the TCI-P. While not part of the MOU, the states of New York, New Jersey, Delaware, Maryland, Virginia, Vermont, Pennsylvania, and North Carolina released a statement signaling their desire to work with the states party to the MOU and the Transportation & Climate Initiative (TCI) in general. On March 1, 2021, the TCI released draft Model Rules for public review. Once finalized, the Model Rules are intended to be adapted for use by each TCI-P signatory jurisdiction via state-specific rulemaking processes.

The Governor has issued an Executive Order with sweeping implications for the oil and gas industry and others.

By Jean-Philippe Brisson, Joshua T. Bledsoe, Nikki Buffa, and Brian F. McCall

On September 23, 2020, California Governor Gavin Newsom signed Executive Order N-79-20, which will have sweeping implications for the oil and gas industry, automakers, low-carbon fuel producers, the logistics industry, and public transit agencies, among others (the Executive Order). Newsom announced the Executive Order against the backdrop of what he called “simultaneous crises,” none of which he argued is more impactful and forceful as the climate crisis. The press conference included Mary Nichols, Chair of the California Air Resources Board (CARB), standing before a small fleet of zero-emission vehicles.

In what will likely be viewed as the most far-reaching measure, the Executive Order requires all passenger vehicle sales starting in 2035 to have zero emissions — a mandate that essentially bans sales of new internal-combustion-powered passenger vehicles in California. As discussed below, the Executive Order raises several significant issues.

By Joshua T. Bledsoe and Kimberly D. Farbota

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.).

By Joshua Bledsoe and Kimberly Farbota

Two recent developments in the interrelated legal challenges commonly known as POET I and POET II may create additional uncertainty for the future of the Low Carbon Fuel Standard Program (LCFS).

Earlier this year, the California Court of Appeal for the Fifth Appellate District (Court of Appeal) issued two opinions in the POET I case, both of which were adverse to the California Air Resources Board (ARB). As we have discussed in previous posts, the POET I case arises from petitioner POET, LLC’s challenges to the original LCFS regulation adopted by ARB in 2009. On April 10, 2017, the Court of Appeal ruled that ARB had failed to faithfully execute a writ of peremptory mandate (the Writ) requiring it to remedy violations of the California Environmental Quality Act (CEQA) that occurred during adoption of the original LCFS. In the opinion, the Court of Appeal largely agreed with petitioner POET, LLC, finding that ARB failed to comply with CEQA’s requirement that it analyze the degree to which nitrogen oxide (NOx) emissions would be impacted by implementation of the LCFS.

In response to ARB’s petition for a rehearing, the Court of Appeal reissued its opinion on May 30, 2017. The revised opinion narrows the holding to focus more squarely on the facts of the case, but does not substantively alter the April 10, 2017 opinion. In the revised opinion, the Court of Appeal assigned continuing jurisdiction to the Fresno County Superior Court (Superior Court) over POET I pending ARB’s completion of the revised NOx analysis and discharge of a reissued writ.

By Joshua T. Bledsoe and Max Friedman

Big changes appear to be imminent for California’s Low Carbon Fuel Standard (LCFS).

As discussed in greater detail in our recent post, the LCFS currently is the subject of two interrelated legal challenges commonly known as POET I and POET II. Here we provide an update on recent proceedings before the California Court of Appeal for the Fifth Appellate District (Court of Appeal) in POET I. These proceedings concern the California Air Resources Board’s (ARB) attempts to comply with a peremptory writ of mandate (the Writ) that primarily required ARB to remedy violations of the California Environmental Quality Act (CEQA) that occurred during promulgation of the original LCFS regulation.

On March 20, 2017, three days before oral argument occurred, the Court of Appeal issued a tentative ruling in the POET I Writ appeal. The tentative ruling alerted the parties that the Court of Appeal intended to overturn the Superior Court’s discharge of the Writ and suggested that some or all of the existing LCFS regulatory regime was in jeopardy. The tentative ruling found that ARB failed to comply with the Writ by excluding from its CEQA analysis information relating to nitrogen oxide (NOx) emissions from biodiesel, resulting in the utilization of an improper baseline for measuring NOx emissions. The tentative ruling also found that ARB’s treatment of NOx emissions was not a “good faith” attempt at corrective action because it relied on an objectively unreasonable interpretation of the CEQA term “project.” The Court of Appeal then further underscored its dim view of ARB’s response to the Writ: “ARB’s actions do not appear to be a sincere attempt to provide the public and decision makers with the information required by CEQA and omitted from the earlier documents.”