Not only will a new Congress convene this month, but a new president will be sworn in, and one of the top issue priorities for the new administration is climate change. With the complexities and wide range of topics under the climate issue umbrella, NACS breaks down this broad issue into smaller topics in this edition and in future Inside Washington columns.

One area of climate change receiving quite a bit of attention recently is the low carbon fuel standard (LCFS). The main purpose of a low carbon fuel standard is to decrease carbon dioxide emissions associated with vehicles powered by various types of internal combustion engines. Most LCFS programs focus on transportation fuels because the sector accounts for as much as 50% of greenhouse gas emissions, including industrial sector emissions from oil refining and crude production.

California is the first state to adopt a low carbon fuel standard program and is heralded as the model for other states, provinces and countries to establish. California’s LCFS program sets annual carbon intensity standards or benchmarks for gasoline, diesel and fuels that replace them. Carbon intensity is the measure of greenhouse gas emissions associated with the production, distribution and consuming of a fuel and is based on a complete life-cycle analysis, also referred to as “well to wheels.” These benchmarks or standards are reduced over time. Currently, the target is a 20% reduction in the carbon intensity of fuels by 2030.

To assist in meeting these targets, a cap and trade type of system was developed. Fuels and fuel blendstocks introduced into the California fuel system that have a higher carbon intensity than the benchmark generate deficits. Similarly, fuels and fuel blendstocks with carbon intensities below the benchmark create credits. Those with deficits can purchase credits to meet the standard or benchmark for that year.

Proponents of the LCFS argue that low carbon fuel has increased in California, and fuel producers are also taking action to decrease the carbon intensity of their fuels. Opponents of the program are concerned about the higher cost of fuel in California.

Other states are joining California in adopting a low carbon fuel standard. Oregon, Washington and the Canadian province of British Columbia have established a regional agreement with the Pacific Coast Collaborative to strategically align policies to decrease greenhouse gas emissions and promote clean energy. Additional states are looking to create a similar program, as are other Canadian provinces and the country of Brazil.

Some policymakers in Washington also seek to establish a federal low carbon fuel standard program. In fact, this objective was included in the House Special Committee on Climate Crisis report and recommendations released last summer. It is highly likely that the topic will be part of the coming debate on climate policy.