Low Carbon Fuels Coalition: Connector of industries and interests

By Katie Fletcher | October 07, 2014

The most recent California legislative session concluded with policy developments spurring the launch of the Low Carbon Fuels Coalition. The LCFC advocates for policies that facilitate the rapid deployment of low carbon fuels, and supports the development of industry-wide policy positions. The coalition has a policy tracking service that monitors, analyzes and reports on proposed state legislation and regulatory proceedings that may impact producers, developers and suppliers of conventional and advanced ethanol, biodiesel, drop-in biofuels, biogas and other low carbon transportation fuels.

Graham Noyes, acting director of the coalition and attorney with Keyes, Fox & Wiedman LLP, said the coalition grew out of reactions to three significant policy developments in California. The first budget decision on cap-and-trade revenue was one, because a significant amount of the funds were allocated to programs other than low carbon fuels. Success was not had in obtaining any long-term funding for low carbon fuels either, even though they are providing a majority of greenhouse gas (GHG) reductions in the transportation sector here in California, Noyes said.  “We saw that as a policy shortfall, and also an opportunity.”

Participation interest grew out of this opportunity. Another policy development that brought the coalition together had to do with attention received from proposed legislation to roll back cap-and-trade in the fuels sector with Assembly Bill 69, proposed by Assemblyman Henry Perea. The bill would have delayed a rule requiring the energy industry to purchase permits for transportation fuels for three years. Even though it did not pass, Noyes said, it was obviously made clear that this was a significant issue for the industry in terms of the cap-and-trade program. Besides these developments, activity surrounding the re-adoption of the overall low carbon fuel standard (LCFS) program in California is motivating member participation in the coalition.

The LCFC hopes it can add value to the industry by serving as a connector between the different trade associations and sub-industries. “Working together to try to find consensus policies that would help the larger industry as a whole,” Noyes said.

Diversity was sought after with initial membership. Noyes said, because of the diversity of biofuels and bioenergy sources and other low carbon fuel sources they had a good amount of participation from lots of different trade associations participating on behalf of their specific industries. Currently Agilyx Corp., Propel Inc., Canergy LLC, Promus Energy LLC and North Star Biofuels LLC are members. “We’re hoping to expand that membership significantly and continue that diversity, so we’re looking really at the programs that help the industry as a whole,” Noyes said. “We think that we’re going to be able to be effective by leveraging that larger industry and hopefully working with those trade associations for some top-level priorities out here in California, and then also in Washington and Oregon where we have low carbon fuel programs in development.”

LCFS programs in California, Washington and Oregon is where the coalition is keeping busy in the coming year. Noyes said there has been interest from some of the mid-Atlantic and northeastern states in following the LCFS programs, and longer-term could expand to reach areas where there is activity.

The coalition as a whole will draw upon membership diversity, focusing more upon the key issues of LCFS re-adoption, rather than issues related to a specific industry. According to Noyes, the issues the coalition thinks will be key with the California re-adoption are cost containment, low carbon fuel availability, as well as seeing where the compliance curve is at. In Oregon the proposed LCFS program just came out and has gone into public comment. Noyes also expressed the coalition is hopeful there will be a proposed program later this year in Washington.

California’s new legislative session starts Dec. 1, and Noyes said the coalition perceives 2015 as very important in terms of the expansion of the LCFS and cap-and-trade. “We are looking forward to working with the industry as a whole to try to build good long-term programs that continue the expansion of low carbon fuels through good policy support here, particularly, as we move into now the transportation being within the scope of cap and trade,” Noyes said.