The Low Carbon Fuel Standard Needs To Change Course, Critics Argue

By Paul Rosenberg, Senior Editor

As Hurricane Helene and its aftermath draw attention to the disastrous impacts of climate change, the right is exploding with conspiracy theories and fake news stories that only make matters worse. Even the Red Cross felt it necessary to warn against “sharing rumors online without first vetting the source.”

Meanwhile, here in supposedly reality-based California, a serious effort to combat climate change faces significant difficulties. California’s Low Carbon Fuel Standard (LCFS) is one of the most significant climate change regulations in the world, but it’s woefully underperforming in advancing zero emissions technology, according to dozens of environmental organizations, while failing to fulfill the state’s environmental justice principles. Amendments that have been in the works for more than a year not only leave some major flaws in place but may actually make them even worse.

“We urge you to vote NO on November 8th,” one coalition of groups wrote to CARB’s board unless a number of key changes were made.

“The fundamental concern we have is that these amendments are not based on science, and we think CARB is supposed to be a science-based decision-making entity,” Nina Robertson, an Earthjustice senior attorney who signed the letter, told Random Lengths in an interview centered on comments she co-authored submitted by Earthjustice on Sept. 30.

“We’ve pointed out a lot of areas where CARB ignored data, shoved data under the rug, failed to analyze key effects,” Robertson said. “What it needs to do is update the analysis and give it another try, with public comment.” If CARB doesn’t do that, “We’re evaluating all our options right now, and litigation is one of them,” she said.

Key areas of concern are over-reliance on biofuels and ignoring their negative impacts, similar concerns with dairy methane, inadequate analysis of two different types of hydrogen generation, as well as direct air capture (DAC) technology, and failures to update the health impact analysis and to properly analyze alternatives.

Disproportionate funding for biofuels has long been a fundamental flaw. “For EVs and EV infrastructure, it’s about $17 billion from the program over its lifetime since 2011, and biofuels have gotten about $22, $23 billion,” NRDC’s Kiki Velez told Random Lengths last October, in our first story on the process of revising the LCFS.

The Dairy Methane Problem
A key part of that imbalance comes from what’s called “avoided methane crediting” given to dairies that use digesters to capture methane from cow manure lagoons. Methane has 86 times the global warming potential of CO2 on a 20-year timescale, so reducing it is a high priority. But instead of being regulated to reduce methane output, dairies using digesters are being richly rewarded as prime beneficiaries of the program. They’ve received almost 20% of LCFS credits while accounting for “less than 1% of fuel energy used in the state,” Earthjustice noted in comments last February.

The reason is simple: credits are tied to “carbon intensity” (CI), which is positive for all fuels except renewable electricity — which is zero — and digester methane which is -245, because it’s removing such a high-impact greenhouse gas. As a result it “overvalues the environmental benefits of fuel produced from livestock manure,” a group of nine state legislators wrote in September. “This is creating nonsensical preferences for such fuels over cleaner fuels.” If dairy methane were directly regulated, its carbon intensity would be positive, just like all other methane. Its negative intensity score simply reflects the fact that it’s not directly regulated, a practice known as “avoided methane crediting,” which activists are calling to end.

But it’s not just activists. “This exceptionalism seriously distorts our LCFS CI crediting,” CARB Board Member Gideon Kracov said at CARB’s Sept. 28, 2023 meeting. He was just one of six CARB board members Earthjustice quoted in an earlier, Aug. 27 comment letter, going to say, “To our knowledge, it is unprecedented for the Staff to advance a major policy change that runs directly counter to the stated concerns of many Board members.”

“We are not saying that the LCFS should not allow dairies to participate in the program,” Robertson explained. “The LCFS could still give money to dairies. What we’re saying is what they shouldn’t do is give them these negative CI scores. … They could still get subsidies through just having a low CI score compared to fossil diesel.”

State law didn’t allow CARB to regulate dairy methane until January of this year, and so activists wanted CARB to do just that, and revise its accounting accordingly. Instead, “It’s gotten much worse, they have yet again moved the goalpost to extend avoided methane crediting for dairies for additional time periods,” she explained.

The Biofuel Modeling Problem
But the whole biofuel sector is problematic. As the biofuel market for soy, palm and other oils has expanded, it can actually generate more greenhouse gases through deforestation, particularly in sensitive tropical regions. CARB uses a model — Global Trade Analysis Project, or GTAP — to analyze different policy impacts, but “One of our main concerns is that the effect of biofuels aren’t properly evaluated in the LCFS modeling,” Robertson said. “New science shows that use of biofuels can have a lot of really bad impacts when it comes to deforestation abroad in very sensitive bio-diverse ecosystems and that also the use of virgin oils in the LCFS can also really impact food prices.”

The most complete analysis comes from Yale economist Steven Berry and Princeton environmental scientist Timothy Searchinger, who submitted deeply critical comments during the process.

“The model lacks a credible basis for any of the economic interactions at its core. It also makes numerous pure assumptions that guarantee biofuels cause little land use change,” Searchinger told Random Lengths. “It is now established that California’s growth in biodiesel has led to corresponding imports of vegetable oil into the U.S. and is helping to spur soybeans and oil palm expansion in the tropic,” he said. “But GTAP blocks these imports from happening by pure assumption.” And that’s not all. “Perhaps most surprisingly, the economics in the model create or destroy vast quantities of land, which the model then has to arbitrarily readjust at the end, and in the course of doing, eliminates up to 90% of the estimated land use change. No model that does that can be credible.”

Searchinger and Berry also cite a morally horrific policy consequence in their comments:

Although no one literally intended this, the de facto policy of the State of California is to achieve greenhouse gas reductions by increasing the demand for crops so that people eat less food and as a result, they and their livestock respire less carbon. And unfortunately, when prices rise, it is the global poor who consume less.

The problem lies with a misleading vegetable oil cap, Searchinger explained. “The rule presents what it calls a cap on vegetable oil, but it’s not a real cap because biofuels from vegetable oil that exceed the cap would still incorrectly receive lots of credit for reducing emissions,” he said. “Unless CARB makes it a real cap, the new rule is likely to cause significant tropical forest loss, more hunger, and encourage other governments to do the same.”

“We don’t want a California climate program to be causing deforestation in the global South, or raising food prices for people who are food insecure,” Robertson added.

But that’s not the only problem, she noted. “It turns out that biodiesel, which is a type of biofuel, actually emits more NOx than fossil diesel does, which is very concerning for air quality in California, because … we have a NOx problem in many parts of the state, and CARB didn’t properly evaluate the air quality impacts of the amendments because they ignored a 2021 study that they themselves authored.”

Hydrogen Generation’s Clean Energy Challenge
There are multiple ways of making hydrogen, two of which play major roles in the LCFS. Hydrogen generated by electrolysis — called electrolytic hydrogen — doesn’t create problematic pollutants, but “It’s very important to ensure that that electricity powering the electrolysis process is clean,” Robertson said, meaning “it’s essentially running on new renewables that are deployed just to create the hydrogen,” and if you’re using clean energy credits, “those credits can’t just be from any time of the day from any time other time of the year, because that’s just basically greenwashing electricity. You need to ensure that that credit is closely matched to exactly when that power was generated.” As things stand now, there is no such ensurance.

The second method, steam methane reclamation, uses methane as a feedstock. CARB says they’re going to phase it out, Robertson explained, “but they’re not really phasing it out” because they’re allowed to continue if paired with biomethane credits. “We think those biomethane credits don’t really do what CARB says there they’re doing,” Robertson said. “They don’t necessarily reduce greenhouse gas emissions and those bogus credits certainly don’t reduce the air-quality harms that SMR [small modular reactor] facilities create.” They emit a whole range of pollutants well-known to Harbor Area residents: particulate matter (PM), nitrogen oxide (NOx), carbon monoxide (CO) and volatile organic compounds (VOC). “So if that dirty hydrogen producer buys bogus biomethane credits from like a New York dairy, that’s not really solving the air-quality problem of the people who live near those facilities, and it’s not solving the greenhouse gas problem either.”

CARB’s analysis also fails to update its health impact analysis. CARB did one early on in September 2023, Robertson said, but since then, “a ton of things have changed, almost all of them have been for the worse when it comes to protecting air quality and CARB hasn’t updated the analysis, So we think that’s wrong under CEQA,” she said. “CEQA requires lead agencies in their documents to explain air-quality impacts, the magnitude of them, the severity of them, and health effects of them. And what CARB is describing is not accurate, it doesn’t meet any of those requirements, because it’s not updated the analysis to reflect what the current proposal is.”

The Catch In Direct Air Capture
Direct air capture is just what it sounds like: a technology to remove carbon directly from the atmosphere, and somehow prevent it from returning to the atmosphere. “That technology could play a role potentially,” Robertson said. “But what it shouldn’t do is become an offset mechanism” which allows the fossil fuel industry to continue polluting while buying DAC credits. “What we need to do is actually stop the initial emission,” the source of the problem — not just concerning global warming, but also for air quality.

“So we are very concerned that CARB is allowing DAC to participate in the program as an offsetting mechanism. Its modeling shows that essentially it is doing that in the future,” she said.

Finally, “The alternatives analysis is really important so that folks can see, ‘Could the agency have done it another way less harmful to the environment?’ Well, we don’t think that CARB did that,” Robertson said. “Its modeling really disadvantages and doesn’t fully consider the roles that zero-emission vehicles could play. The modeling that CARB uses assumes that the amount of zero-emission vehicle deployment is fixed and doesn’t change based on what CARB does in the LCFS. But that’s not true. If you gave more money to ZEVs if you really benefited zero-emission vehicles, you would see them grow, and CARB’s modeling doesn’t really doesn’t do that.”

This list of major concerns is hardly exhaustive. Calls to include aviation and ocean-going vessel fuels in the standard have been ignored, for example. There’s also a concern that municipal solid waste incinerators could return using new processes, pyrolysis and gasification, to produce hydrogen. The fight to stop the Los Angeles City Energy Recovery, or LANCER incinerator in the 1980s, led by Concerned Citizens of South Central Los Angeles, was a watershed event in the birth of the environmental justice movement. So this new proposal has disturbing historical echoes.

“Just as California is getting rid to shut down its last operating incinerator near Modesto, the state is creating incentives to build an entire new fleet of these incinerators to create hydrogen,”

In line with this, a group of 28 organizations wrote an Aug. 27 comment letter calling for CARB to “remove incentives for the conversion of municipal solid waste to fuel.”

All this and more is why what CARB “needs to do is update the analysis and give it another try,” as Robertson said. And so Nov. 8 — three days after election day — looms as a second crucial decision day with consequences stretching decades into the future.