California’s Low Carbon Fuel Standard (LCFS) is a market-based program focusing on reducing the carbon intensity (CI) of transportation fuels used in the state. LCFS was launched in 2011 and is designed to reduce the carbon footprint associated with transportation. These regulations aim to encourage the use of cleaner fuels such as electricity, ethanol, biodiesel, renewable diesel and renewable natural gas by providing incentives to create demand for cleaner fuels in the marketplace.
The LCFS program is implemented using a system of tradable credits, each of which is equivalent to one metric ton of carbon. Credits are generated by producers or users of cleaner fuels, including electricity, and can be sold to producers whose product will not meet the program’s declining benchmark for carbon intensity.
Since its inception, the LCFS has been responsible for billions of dollars worth of investment in clean transportation technologies and is the cornerstone for many other states and jurisdictions attempting to tackle climate change.
The California Air Resources Board (CARB) was established in 1967 combining the Bureau of Air Sanitation and the Motor Vehicle Pollution Control Board. The mission of CARB is to attain and maintain healthy air quality, protect the public from exposure to toxic air contaminants and provide innovative approaches for complying with air pollution rules and regulations.
CARB is governed by a board of sixteen members and supported by a staff of scientists, engineers, economists, lawyers and policy makers. In order to lead California’s efforts to reduce climate-changing emissions, they set the state’s air quality standard and measure the progress in reducing pollutants.
The Oregon Department of Environmental Quality (DEQ) is the chief regulatory agency for the state of Oregon. Its goal is to protect and enhance the state’s air, land and water resources. As part of its mission they developed the Oregon Fuel Reporting System to implement the Clean Fuels Program (CFP) and collect data from fuel suppliers for the Greenhouse Gas Reporting Program.
CFP credit generation is relative to the quantity of electricity supplied to your fleet. Common equipment types include forklifts and pallet jacks, commercial on-road fleets and chargers, hybrid refrigeration units, municipal fleet vehicles, cargo-handling equipment, shore-power/cold-ironing and more. For all equipment other than forklifts and pallet jacks, direct metering is required and all slave loads need to be accounted for and addressed. See our page on Metering for more information. For forklifts and pallet jacks, electricity consumption can be estimated based on a variety of fleet and business operation variables.
British Columbia’s Low Carbon Fuel Standard (BC-LCFS), was established in 2008 and implemented in 2013 with the goal of reducing the carbon intensity (CI) of fuels used in the province. The BC-LCFS functions in much the same way as the California LCFS and the Oregon CFP, although there is no credit price cap.
British Columbia’s low carbon fuel supply is expected to grow significantly over the next 20 years as electric vehicle use increases. The electricity that displaces gasoline and diesel in transportation vehicles is considered an incentivized Part 3 fuel under the Greenhouse Gas Reduction Act. Part 3 fuels are subject to the reporting requirements under the Act. This generates revenue for low carbon transportation fuel suppliers and supports investment in clean fuels and vehicles. Visit Credit Market for more information.