Assessment of Technologies to Meet a Low Carbon Fuel Standard

Abstract

California's low carbon fuel standard (LCFS) was designed to incentivize a diverse array of available strategies for reducing transportation greenhouse gas (GHG) emissions. It provides strong incentives for fuels with lower GHG emissions, while explicitly requiring a 10% reduction in California's transportation fuel GHG intensity by 2020. This paper investigates the potential for cost-effective GHG reductions from electrification and expanded use of biofuels. The analysis indicates that fuel providers could meet the standard using a portfolio approach that employs both biofuels and electricity, which would reduce the risks and uncertainties associated with the progress of cellulosic and battery technologies, feedstock prices, land availability, and the sustainability of the various compliance approaches. Our analysis is based on the details of California's development of an LCFS; however, this research approach could be generalizable to a national U.S. standard and to similar programs in Europe and Canada.

Keywords: Performance-based standard, carbon intensity, cost-effectiveness

JEL Classification: N7, Q42, Q48,Q21, Q28, N5, O13