Low carbon fuel regs on hold, Republicans seek to repeal them
n Feb. 20, the California Air Resources Board announced that the Office of Administrative Law had disapproved the proposed amendments to the Low Carbon Fuel Standard Regulation, which the CARB had approved in early November.
While the Board’s vote was 12-2, this was a controversial decision.
The OAL letter to the CARB indicated two reasons — clarity and incorrect procedure – for its disapproval. The CARB staff said that it will resubmit the regulations after it reviews the detailed OAL disapproval reasons.
The intent of the changes is to speed up the reduction of air pollution and greenhouse gas emissions by creating incentives for the development of zero-emissions in California.
While there had been general approval and consensus on LCFS goal for more than a year after its initial draft proposal was released to the public, many Californians were concerned that these new rules would cause a significant increase in gasoline prices.
Before the CARB could resubmit its proposed rules, on Feb. 24 the Legislature’s Republicans introduced Assembly Bill 12, which would have repealed an update to the state’s LCFS rules.
They wanted an immediate vote on the bill, which would have required passage of measure to suspend the State Constitution’s legislative process. This was defeated along party lines. While losing the shortcut step, Republicans still submitted AB 12 to the Assembly’s Natural Resources Committee.
After the vote, local Assemblyman Jeff Gonzalez, District 36, said, “Californians continue to be burdened with the highest gas prices in the nation. It’s time we focus on lowering the cost of living, not adding to the financial strain.”
In September 2023, the CARB staff released a preliminary report about the proposed changes. They estimated that the new rule would increase fuel prices. “. . . [the proposed amendments] are projected to potentially increase the price of gasoline by an average of $0.37 per gallon, potentially increase the price of diesel by an average of $0.47 per gallon, and fossil jet fuel $0.35 per gallon,” the report stated. And further increases were projected through 2046.
However, in the fall of 2024, when the CARB was considering approval of the regulations, the final staff did not address a potential fuel price increase. In October, the CARB issued a separate report that stated there is no relationship between LCFS credit prices and fuel prices for gasoline.
“All climate action will have impacts to the cost of pollution sources, but the exact cost is unknown due to a variety of factors. For retail gas prices, there is nothing to prohibit fuel producers from passing on any costs for any regulation and what is ultimately passed on to consumers is determined by each company,” the CARB report concluded.
But in a separate an independent analysis, Dr. Danny Cullenward, senior fellow at the Kleinman Center for Energy Policy, at the University of Pennsylvania, concluded, “If LCFS credit prices reach their maximum allowed levels, as has occurred in the past, then retail gasoline price impacts could be $0.65 per gallon in the near term, $0.85 per gallon by 2030, and nearly $1.50 per gallon by 2035.”
