Could clean fuel standard programs have a sweeping impact on climate, public health, national security, and the economy? The Low Carbon Fuels Coalition believes so. On June 27, 2023 the Low Carbon Fuels Coalition (LCFC) hosted a webinar titled “The Proven Effectiveness and Underappreciated Benefits of Clean Fuel Standards.” Watch the full webinar here.
In this blog we will summarize some of the main points of the webinar and explore some of the important areas of impact for clean fuel standard programs such as those already active in California, Oregon, Washington State, British Columbia and Canada. This summary and blog were not endorsed by the Low Carbon Fuels Coalition.
Clean fuel standard programs serve as regulatory mechanisms mandating the decrease in carbon intensity specifically of transportation fuels, without extending this requirement to other sectors such as agriculture or power generation. A standard for carbon intensity (CI) is established, which measures the amount of carbon dioxide equivalents released per unit of energy (megajoule), i.e., grams of CO2 equivalent per megajoule (gCO2e/MJ). The CI considers the complete lifecycle of the fuel, from its production through to its eventual combustion or usage.
Fuels with low carbon intensity that fall beneath the set benchmark contribute to the creation of credits, while fuels exceeding the CI benchmark create deficits. These credits and deficits are measured in metric tons of greenhouse gas emissions and are traded in a private market. Regulated entities that produce fuels with higher carbon intensities must purchase these credits to continue to operate within the jurisdiction with the clean fuel standard program.
Clean fuel standard initiatives necessitate that fuel manufacturers and importers adhere to a progressively declining carbon intensity standard over time. This can be achieved by manufacturing or importing fuels with a carbon intensity lower than the set standard, or through the purchase of credits from other producers or importers who have surpassed the standard. These programs further include measures to promote the production of low-carbon fuels like hydrogen and electricity.
There are a variety of ways that clean fuel standard programs help mitigate impacts on our climate.
Reduction of Greenhouse Gas Emissions: The primary objective of these programs is to reduce the carbon intensity of transportation fuels. By setting limits on the amount of carbon that can be emitted per unit of energy produced, these programs incentivize fuel providers to supply low-carbon alternatives such as biofuels, hydrogen, and electricity. These alternatives emit fewer greenhouse gases when burned compared to traditional fuels, contributing less to climate change and global warming.
Promotion of Innovative Technologies: Clean fuel standards encourage innovation in low-carbon transportation technologies. This can include development of electric vehicles, improvements in biofuel production techniques, and advances in hydrogen fuel cell technologies. The more these technologies improve, the greater the potential for reducing greenhouse gas emissions.
Indirect Emissions Reductions: Clean fuel standards consider the full life-cycle of a fuel, from production to consumption. This encourages producers to consider and reduce emissions at all stages of a fuel’s life, which can lead to further emissions reductions. For instance, a producer might make a process more energy-efficient, or use cleaner energy sources in production, in order to reduce the overall carbon intensity of a fuel.
Systemic Changes in Fuel Supply Chains: By establishing a market where carbon credits can be traded, clean fuel standard programs create a financial incentive for fuel providers to reduce the carbon intensity of their fuels. This can lead to systemic changes in fuel supply chains, as providers that can’t meet the standard might buy credits from those that can. This essentially creates a market-driven approach to lowering greenhouse gas emissions.
One explicit goal of clean fuel standard programs in Washington and California, for example, is “air quality benefits” which can directly impact public health.
Pollutants such as nitrogen oxides (NOx) can irritate the respiratory system, leading to symptoms like coughing, wheezing, shortness of breath, and exacerbation of asthma or other respiratory conditions.
The combustion of fossil fuels in vehicles, especially diesel engines compared to gasoline engines, is a significant source of nitrogen oxides. The high temperatures reached during fuel combustion in engines cause nitrogen and oxygen from the air to combine and form NOx. Prolonged exposure to polluted air can also increase the risk of developing chronic respiratory diseases like chronic obstructive pulmonary disease (COPD), according to the National Library of Medicine.
Clean fuel programs help mitigate the public health ramifications of nitrogen oxides released by vehicles. Improved public health outcomes lead to lower healthcare costs, increased productivity, and a healthier workforce, ultimately benefiting the economy.
Clean fuel standard program adoption can have an important impact on national security by helping to make the United States more independent when it comes to energy. Clean fuel standard programs reduce the need for imported fossil fuels and promote the use of renewable energy sources found within the country. This means the United States will be less vulnerable to problems in global oil markets and conflicts over energy resources. These programs help address climate change by reducing greenhouse gas emissions, which protects important resources and makes the country less vulnerable to environmental problems.
One impact clean fuel standard programs will have is on job creation. The expansion of the clean energy sector can lead to the creation of new jobs in areas such as renewable energy generation, fuel production, research and development, manufacturing of clean technologies, and installation and maintenance of renewable energy systems.
Clean fuel standard programs drive technological advancements and innovation in the clean energy sector. These programs create incentives for research and development, leading to the discovery of more efficient and cost-effective technologies for producing, storing, and utilizing clean fuels. By supporting clean energy innovation, the United States can enhance its competitiveness in the global clean energy market, attract investments and export opportunities, and position itself as a leader in clean technologies.
In conclusion, clean fuel standard programs have the potential to bring about sweeping impacts in various areas. By encouraging the reduction of greenhouse gas emissions, these programs contribute to mitigating climate change and protecting the environment. The promotion of low-carbon fuels improves air quality, leading to better public health outcomes and reduced healthcare costs. Furthermore, clean fuel standard programs enhance national security by reducing reliance on imported fossil fuels. Lastly, these programs drive economic growth by creating jobs, fostering innovation, and diversifying the energy sector, thus positioning the United States as a competitive player in the clean energy market. With their multifaceted benefits, clean fuel standard programs present an opportunity to create a more sustainable and prosperous future for both the environment and the economy.