Study Finds California’s Low Carbon Fuel Standard Replacing Biofuels Blends

A new study suggests that California’s low carbon fuel standard is winning out as a viable measure over the federal government’s biofuel blends.

While biofuel blends in gasoline and diesel have been the national standard for years, a new study by Lux Research finds that California’s low carbon fuel standard may become the norm for government policies to meet emissions reduction goals. The study says that “a new generation of policies is based on technology-agnostic carbon intensity metrics.”

The report examined 470 fuel pathways in California Air Resources Board’s (CARB) Low-Carbon Fuel Standard (LCFS) to identify technology developments and opportunities in low-carbon fuels. There will be no preferred feedstock (such as corn from the Midwest), conversion process, or final fuel product. Lux believes that well-to-wheel analysis will become the analytical model as more government regulations and policies use a fuel’s carbon intensity as the benchmark.

Renewable diesel and conventional electricity will be the near-term winners in low-carbon transportation fuels according to the report, followed by renewable electricity in a close third. Renewable electricity comes from renewable energy sources such as wind and solar, while conventional electricity can come from coal, natural gas, nuclear, and petroleum.

Canada seems to agree with Lux Research. In late November, Canada’s Minister of Environment and Climate Change Catherine McKenna announced that the country will adopt a national clean fuels standard. The national standard looked at adoption of similar guidelines in California, Oregon, and British Columbia, according to a report.

The carbon intensity model measures the amount of carbon by weight emitted per unit of energy consumed. By measuring well-to-wheels, feedstock, process technology, and power sources are included. Lux Research also included technology viability in its assessment.

“Energy companies with diversified energy portfolios are well-positioned to take advantage of this paradigm change, shifting towards renewable sources to reduce carbon intensity values,” said Yuan-Sheng Yu, Lux Research Analyst and lead author of the report titled, “Identifying Winners in Low-Carbon Fuels.”

“With electricity a near-term winner, pioneers for the ‘utility of the future’ hold a strong position moving forward,” he added.

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California has been seeing a lot of applications of the low carbon fuel standard by municipalities, fleets, and several fuel suppliers, operating in the state. Currently, the state is allowing seven different low-carbon fuels from 26 different feedstocks, making up 11.3 percent of its fuel consumption, according to the report.

The study found that waste oil halves biodiesel’s carbon intensity. Biodiesel derived from fats, oil and grease has the capacity to cut carbon intensity and have up to 2.5 billion gallons a year available. Processing poor quality waste adds to the cost, but this type of clean diesel remains a significant opportunity, the study said.

Lux also sees biogas, which can include renewable diesel and renewable natural gas, presenting commercially viable clean fuel opportunities.

“With California’s large transportation fuel market as a draw, improved biogas technologies as well as similar carbon-negative fuel pathways will emerge to expedite carbon emissions reduction,” the study said.


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