LCFS to Drive New Advanced Biofuel Demand
California’s Low Carbon Fuel Standard, America’s second-largest driver of biofuels consumption after the federal Renewable Fuels Standard, could soon dramatically increase demand for low-carbon fuels under a proposed statewide decarbonization plan. The California Air Resources Board’s proposed scoping plan to reduce greenhouse gas emissions 40 percent below 1990 levels by 2030 sets one of the most ambitious targets in North America.
This action is part of the state’s overall effort to reduce emissions 80 percent by 2050, as mandated by state legislation, and low-carbon transportation is key to reaching the goal. Transportation, primarily on-road travel, generates 40 percent of total California greenhouse gas emissions—the single-largest source of statewide carbon dioxide emissions.
The LCFS was originally adopted in 2009, amended in 2011, and readopted in 2015. Under the LCFS, fuel producers are required to reduce the carbon intensity (CI) of their products 10 percent from a 1990 baseline by 2020, reducing petroleum dependency and reducing emissions and other air pollutants.
CI evaluates greenhouse gas emissions from producing and consuming fuel, measured in carbon dioxide equivalents, and is based on a complete lifecycle analysis including the direct effects of fuel use and production and the indirect effects associated with crop-based biofuels.
The LCFS has worked well so far. The University of California-Davis’ Institute of Transportation Studies estimated the 10 percent CI target displaced roughly 2.14 billion gallons of gasoline and 77 million gallon-equivalents of diesel with low-carbon transportation fuels through 2013.
Under the proposed scoping plan update, California’s transpor-tation fuel CI would become much more stringent. One alternative proposal would increase the LCFS target to an 18 percent CI reduction by 2030, which CARB says would avoid between $55 million and $340 million in economic damages related to climate change.
The new demand for advanced biofuels is potentially 400 million gallons. In the initial scoping plan discussion draft, released in December, CARB’s 18 percent CI scenario assumes an LCFS credit price of $80 per ton in 2030 and 980 million gallons of advanced biofuels in the transportation sector, including cellulosic ethanol. These assumptions are significantly higher than the 10 percent scenario, which assumes an LCFS credit price of $10 per ton in 2030 and 580 million gallons of advanced biofuels in the transportation sector, including cellulosic ethanol. The final 2017 scoping plan update won’t be released until late March or considered by CARB until late April.
Advanced biofuels like sugarcane ethanol are important to achieving the LCFS goals. Advanced biofuels reduce greenhouse gas emissions up to 90 percent compared to conventional gasoline and ethanol is the only fuel available today at commercial scale to contribute to the LCFS.
CARB’s transportation fuel life-cycle analysis boosts the need for advanced biofuels capable of providing more energy with fewer emissions. Sugarcane ethanol has one of the lowest carbon intensities of all the fuels that are commercially available in California, and the commodity’s designation as a low-carbon fuel under LCFS lifecycle CI assessments is an important attribute for increased supplies.
Sugarcane fields store roughly 60 tons of carbon and produce around 7,000 liters of ethanol per hectare. These fields only need to be replanted every six years, reducing tillage operation and the amount of carbon released from soil. Additionally, the Center for Cane Technology predicts sugarcane ethanol’s productivity will grow from 7,100 liters per hectare today to 24,500 liters per hectare by 2025.
Sugarcane ethanol has played a modest, but important, role supplying California with clean renewable fuel. Since 2011, Brazil has exported nearly 300 million gallons of sugarcane ethanol to California. Brazil is making investments to increase fuel production. Since 2004, Brazil’s sugarcane ethanol industry has invested more than $30 billion in production and capacity, and will produce an estimated 7 billion gallons of ethanol during the 2016 harvest season.
Regardless of the ultimate LCFS emissions reduction and CI targets set by CARB, it’s clear higher volumes of renewable fuel, particularly advanced biofuels, are necessary to meet California’s decarbonization goals. Brazil’s sugarcane ethanol industry remains committed to reducing transportation sector emissions through reliable biofuel supplies.
Author: Leticia Phillips
North American Representative
Brazilian Sugarcane Industry