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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.”

By Joshua T. Bledsoe and Max Friedman

Two related cases, advancing in parallel, have the potential to upend California’s Low Carbon Fuel Standard (LCFS), whether via full suspension of the LCFS or carving out diesel fuels from the deficit and crediting regime.[1]

Both cases involve challenges by POET, LLC (POET), a South Dakota-based ethanol producer, against the LCFS rules adopted by the California Air Resources Board (ARB). ARB first adopted LCFS rules in 2009 and amended them in 2011, but these rules successfully were challenged by POET, leading the California Court of Appeal for the Fifth Appellate District (Court of Appeal) on July 15, 2013, to find deficiencies in ARB’s California Environmental Quality Act (CEQA) review process.  The Court of Appeal issued a peremptory writ of mandate (Writ) in this case (POET I), requiring ARB to remedy legal defects in the initial adoption of the regulation, but opting to leave the LCFS in place while ARB reworked its analysis and repeated the necessary procedural steps and substantive analysis.  Over the next two years, ARB reviewed and revised the LCFS, before re-adopting the regulation on September 25, 2015.  Shortly thereafter, on October 30, 2015, POET once again brought suit in Fresno County Superior Court (Superior Court) to challenge the re-adopted regulations (POET II), arguing that ARB both failed to comply with the Writ issued in POET I and that it violated CEQA, the California Administrative Procedure Act (APA), and the Health & Safety Code.

By Joshua Bledsoe and Max Friedman

After a lengthy process of policy review and revision, the California Air Resources Board (ARB) re-adopted the state’s Low Carbon Fuel Standard (LCFS) on September 25, 2015. The LCFS is expected to contribute approximately 20% of the statewide greenhouse gas (GHG) reductions required by 2020 under Assembly Bill 32. Moreover, the LCFS has been identified by Governor Brown as a key regulatory tool both to reduce petroleum consumption 50% by 2030…

By Ann Claassen and Eli Hopson

On May 29, EPA took long-awaited action on the Renewable Fuel Standard (RFS), with the unusual step of proposing standards for several years at once. EPA is reproposing the 2014 RFS—its original proposal of November 2013 having been heavily criticized—and is proposing, for the first time, the 2015 and 2016 RFSs. EPA proposes to set the compliance levels for 2014 at the level of production that actually occurred, while recognizing that some reallocation of…

By Ann Claassen and Eli Hopson

Last week EPA finalized the Renewable Fuel Standard (“RFS”) levels for 2013.[1]  Although EPA missed the statutory deadline of November 30, 2012, for setting levels for the 2013 RFS, EPA notes that the statute does not provide any penalty for missing the deadline, nor does it remove the general requirements of the RFS if the deadline is missed.[2]  In light of the significant delay, EPA has extended the deadline for obtaining sufficient credits for gallons of ethanol equivalent fuels (known by the term Renewable Identification Number, or RIN) from February 28 to June 30, 2014.  EPA also intends to meet the statutory deadline of November 30, 2013 for the 2014 standards, and therefore will have released the 2014 standards well in advance of the 2013 compliance deadline.  This will allow obligated parties to make informed decisions about their 2013 compliance strategies, such as whether to use banked RINs, or save certain RIN categories for 2014 compliance.[3]

By Joshua T. Bledsoe and Aron Potash

California’s low carbon fuel standard (LCFS), a core component of the state’s greenhouse gas (GHG) emission reduction strategy, likely will survive a legal challenge and remain in effect despite an appellate court’s order indicating that the regulation was improperly adopted.

The California Court of Appeal for the Fifth Appellate District issued a tentative disposition on June 3, 2013, in POET, LLC et al. v. Goldstene, et al. finding that the California Air Resources…

By Marc Campopiano and Tim Henderson

On March 11, 2013, the California Energy Commission (CEC) released a proposed Seventh Edition of the Renewables Portfolio Standard (RPS) Eligibility Guidebook (proposed Guidebook).  As we discussed in a previous blog entry, on March 28, 2012, the CEC suspended the RPS eligibility of power plants generating electricity using biomethane. 

In response to the passage of AB 2196, which created a pathway for using biomethane to generate RPS-eligible electricity, the proposed Guidebook would lift…

By Michael Dreibelbis, Eli Hopson, and Aron Potash

A California appellate court signaled on February 26, 2013, that it might find that California’s low carbon fuel standard (LCFS) was improperly adopted.  The court sent a request for supplemental briefing in POET, LLC et al. v. Goldstene, et al. indicating that the California Air Resources Board (CARB) may have violated the California Environmental Quality Act (CEQA) in adopting the LCFS.  Although the court has not yet issued its decision…

By Marc T. Campopiano and Tim B. Henderson

On August 9, 2012, the California Energy Commission (CEC) adopted a revised Sixth Edition of the Renewables Portfolio Standard Eligibility Guidebook (RPS Guidebook) to clarify changes to the RPS Guidebook Fifth Edition, which was recently adopted on May 9, 2012, as described in our prior blog discussion.  Highlights of the changes include the following:

  • The CEC clarified additional RPS requirements for generating facilities with a first point of interconnection to the

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By Marc Campopiano and Tim Henderson

On May 9, 2012, the California Energy Commission (CEC) adopted a revised Renewables Portfolio Standard (RPS) Eligibility Guidebook.  The update implements several key modifications to the RPS eligibility criteria, including but not limited to:

  •  Incorporating changes required by Senate Bill X1-2, which raised the RPS to 33 percent by 2020.  Signed by Governor Brown on April 12, 2011, Senate Bill X1-2 made other significant revisions to the RPS, including covering publicly-owned utilities

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