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World Map of Regional Policies

Northeast/Mid-Atlantic Clean Fuels Standard

On June 2, 2008 Gov. Deval Patrick of Massachusetts invited the Regional Greenhouse Gas Initiative governors to join together in creating a regional Low Carbon Fuel Standard, and in 2009 governors representing Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont signed a memorandum of understanding (MOU) committing to develop a regional LCFS.

Today, all the Northeast and Mid-Atlantic states have statutory obligations and/or commitments to achieve an 80 percent reduction from 1990 levels in GHG emissions, or are taking other steps to reduce emissions (funding energy efficiency, renewable energy, and climate-friendly transportation programs).

The transportation sector, principally reliant on petroleum-based fuels, is one of the largest sources of GHG emissions in the Northeast/Mid-Atlantic region and is the fastest-growing source of emissions.

Northeast States for Coordinated Air Use Management (NESCAUM) is providing technical and policy support to the state governments to evaluate LCFS policy for the region. NESCAUM completed and published an analysis in August 2011, with key findings indicating that the program could have a small but positive economic benefit while reducing greenhouse gas emissions. Two stakeholder meetings were also held in September 2011 to discuss findings of the report – stakeholder comments have been published on the NESCAUM website.

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Midwest Low Carbon Fuel Policy

The Low Carbon Fuel Policy (LCFP) Advisory Group was formed by the Midwestern Governors Association (MGA) and group discussions were facilitated by the Great Plains Institute. The advisory group convened over the course of a year to devise recommendations for a Midwestern approach to a low-carbon fuel policy, and a report was issued in 2010 detailing the results and recommendations from the group.

The advisory group included participants from the oil industry, environmental community, biofuels industry, utility industry, and auto industry, and represented a wide spectrum of views on the direction Midwestern fuel policy should take.

The MGA report recommended a federal LCFP as opposed to a patchwork of state policies, but given uncertainty with federal policy, a regional approach was viewed as the next best option. The MGA report recommended that policy should:

  • Create a framework and incentives for development of, and demand for, low-carbon fuels in the Midwest
  • Decrease the carbon intensity of transportation fuels
  • Take advantage of the agricultural and industrial strengths to benefit the regional economy while protecting the natural resources of the Midwest
  • Complement other policies focused on improving transportation efficiency and reducing carbon intensity emissions in the region.

Furthermore, based on recommendations from a previous working group, the advisory group worked under the following numeric targets in making its recommendations:

  • The overall carbon intensity should be reduced by at least 10 percent within 10 years after implementation by jurisdictions in the Midwest
  • The program should use the average carbon intensity of the 2005 fuel supply as the baseline for future reductions.

No low-carbon fuel policy has been implemented in the Midwest region, and it is up to member states to determine what action to take next.

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Washington Low Carbon Fuel Standard

In May 2009, Gov. Christine Gregoire issued Executive Order 09-05, Washington's Leadership on Climate Change. The order directs the Washington Department of Ecology to assess whether the California Low Carbon Fuel Standard (LCFS) or a modification thereof would best meet Washington's greenhouse gas emissions reduction targets.

Meetings took place throughout 2009 and 2010 to assess what an LCFS for Washington might look like, and a final report was released in 2011.

The LCFS considered in the report assumes that transportation fuel carbon intensity will be reduced 10 percent from 2007 levels by 2023, with reductions beginning in 2014. The compliance curve assumed a gentle start to the 2023 goal with minimal reductions required in the first several years. The key results found from the study were:

  • Increased biofuel and electricity consumption in the transportation sector
  • Decreased petroleum consumption
  • Decreased greenhouse gas emissions
  • Small impacts on the state economy

No LCFS policy has been implemented, and the state has not yet decided how to proceed.

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Oregon Low Carbon Fuel Standard

In 2009, the Oregon legislature authorized the state Environmental Quality Commission to develop low carbon fuel standards for Oregon. The goal was to reduce the average carbon intensity of Oregon's transportation fuels by 10 percent over a 10-year period.

In April 2012, Gov. John Kitzhaber asked the Oregon Department of Environmental Quality to begin the rulemaking process for the Oregon Clean Fuels Program. DEQ engaged potential regulated parties, a wide range of fuel users, local governments and other interested stakeholders to gather input on the design of the program and its estimated fiscal impacts. DEQ is currently accepting formal written comments on the proposed rules through August 31, 2012. The draft rules are scheduled to go to the Environmental Quality Commission in December 2012.

The DEQ approach to the Clean Fuels Program focuses on decreasing the greenhouse gas emissions from fuel over time. The approach proposes a two-phased program that phases in over a several-year timeframe. It begins with a two-year reporting-only period to gather data and refine the program. During the first phase, fuel producers and importers would report the "lifecycle" greenhouse gas emissions from each fuel they supply in Oregon. During the second phase, which would require approval by the legislature and Environmental Quality Commission to take effect, fuel producers and importers would gradually lower fuels' greenhouse gas emissions 10 percent by 2025.

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California Low Carbon Fuel Standard

California Executive Order S-1-07, the Low Carbon Fuel Standard (LCFS) (issued on January 18, 2007), calls for a reduction of at least 10 percent in the carbon intensity of California's transportation fuels by 2020. It instructed the California Environmental Protection Agency to coordinate activities between the University of California, the California Energy Commission and other state agencies to develop and propose a draft compliance schedule to meet the 2020 target. Furthermore, it directed the state Air Resources Board (ARB) to consider initiating a regulatory proceeding to establish and implement the LCFS. In response, ARB identified the LCFS as an early action item, and adopted LCFS regulations in 2010.

The LCFS is a market-based mechanism that allows providers to choose how they will reduce emissions while responding to consumer demand. Regulated parties have several possible ways to comply with the standard:

  • Sell more low-carbon fuels such as biofuels, natural gas, or electricity in their fuel mix
  • Reduce the carbon intensity of fossil fuels they sell through technological changes, such as reduced flaring or carbon capture and sequestration (CCS)
  • Purchase credits from other producers / fuel suppliers who are able to supply low carbon fuels at lower prices.

The California LCFS is back-loaded, where greater reductions are required in later years rather than evenly across the 10-year reduction timeframe. This makes compliance with the standard easier by allowing time for nascent technologies to develop.

The LCFS is presently implemented and undergoing regular review and updates to improve the effectiveness of the standard.

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British Columbia Renewable & Low Carbon Fuel Requirements Regulation

Effective as of January 2010, the Renewable and Low Carbon Fuel Requirements Regulation (RLCFRR) will reduce British Columbia's reliance on non-renewable fuels, help reduce the environmental impact of transportation fuels and contribute to a new, low-carbon economy.

The RLCFRR provides a regulatory framework that enables the Province to set benchmarks for the amount of renewable fuel in B.C.'s transportation fuel blends, reduce the carbon intensity of transportation fuels and meet its commitment to adopt a low-carbon fuel standard. This legislation further supports British Columbia's goal to lower provincial greenhouse gas (GHG) emissions by 33 percent by 2020.

The RLCFRR will reduce the carbon intensity of transportation fuels through two major requirements:
Renewable Fuel Requirement, requiring 5 percent renewable content in gasoline beginning in 2010 and 5 percent renewable content for diesel in 2012 onward; and Low Carbon Fuel Requirement, which requires 10 percent reduction in carbon intensity by 2020.

According to the government's estimate, the use of renewable fuel in 2010 saved 418,919 tons of greenhouse gas emissions from being released into the environment, the equivalent of about 82,000 cars being removed from the road.

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European Union Fuel Quality Directive

In April 2009, Directive 2009/30/EC was adopted which revises the Fuel Quality Directive (Directive 98/70/EC). It amends a number of elements of the petrol and diesel specifications as well as introducing in Article 7a a requirement on fuel suppliers to reduce the greenhouse gas intensity of energy supplied for road transport (Low Carbon Fuel Standard). In addition, the Directive establishes sustainability criteria that must be met by biofuels if they are to count towards the greenhouse gas intensity reduction obligation.

The Fuel Quality Directive sets a 6% reduction target for the carbon intensity of transportation fuel supplied to the European Union. This carbon intensity reduction can be achieved through any low carbon fuel options, such as hydrogen or electricity, but it is widely expected that the bulk of the target will be met through the use of biofuels.

The target of 6% is designed to be consistent with the use of 10% biofuels with an average 60% carbon reduction level from baseline fuels to comply with the Renewable Energy Directive. The Directive includes sustainability criteria (mirrored in the Renewable Energy Directive) that places a minimum threshold on the direct emissions savings from biofuels based on a lifecycle analysis methodology described in the directive, and defines categories of high biodiversity and high-carbon land that must not be converted for biofuels production. The Directive puts an obligation on European Member States to enforce both the overall targets and the sustainability conditions, and to allow the legal requirements of economic operators to vary from Member State to Member State.

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