On January 29, 2013, E2 members and delegates traveled to Sacramento for an Advanced Biofuel Legislative Action Day. Opponents of California’s Global Warming Solutions Act of 2006 (AB 32) and the Low Carbon Fuel Standard (LCFS) have been especially active lately, so our message was needed in Sacramento. Susan Frank, E2 Member and Executive Vice President of Better World Group, provides an excellent summary in Capitol Weekly of the efforts to undermine California’s landmark clean air and energy policies.
E2’s message focused on explaining the importance of the LCFS to California’s clean energy economy, discussing the findings of our Advanced Biofuel Market Report and discussing the role AB 118 has had in California’s delivery of clean fuels to the marketplace.
Advanced Biofuel Legislative Action Day
Our day started with an event hosted by E2 and Senator Jean Fuller – “Clean Liquid Fuels in California Update: Opportunities for job creation and pollution reduction”. We discussed commercial progress and policy drivers to meet state energy and environmental goals, and included a tour of Sierra Energy Waste Gasification. We had a lunch meeting with Richard Corey, Deputy Executive Officer at the California Air Resources Board, who provided background and insight on the LCFS. And, finally, our day ended with several meetings with Legislators to discuss the LCFS and transportation technology investment programs.
We wish to thank the E2 members and delegates who represented E2 so effectively in Sacramento: Tony Bernhardt, E2 Northern California Director; Bob Epstein, E2 Co-founder; Jon Foster, Chief Financial Officer, LS9; Mike Hart, CEO, Sierra Energy; Esther Perman, Government Relations, Propel Fuels; Kinkead Reiling, Co-Founder, Amyris, Inc.; Russ Teall, President and Founder, Biodico; James Tischer, Mendota Advanced Bioenergy; and Leon Woods, III, Government Relations, Mendota Advanced Bioenergy.
The Low Carbon Fuel Standard
First adopted in 2007 as part of AB 32, the low carbon fuel standard program (LCFS) is a performance-based standard that sets pollution limits for transportation fuels sold in California. The LCFS offers a free market, subsidy-free approach to breaking oil’s monopoly of our fuel supply, driving economic development in rural areas and giving greater local control over fuel supplies and distribution.
The program began in 2012 and requires oil companies to reduce the carbon pollution from gasoline and diesel by 10 percent by 2020. Companies can utilize any number of cleaner fuel and technology solutions to meet the standard, including offering advanced biofuels, electricity, natural gas, hydrogen, or even cleaning up existing petroleum-based gasoline and diesel. Together with new carbon pollution standards for cars and other oil-saving measures under California’s clean energy law, the LCFS will help shrink consumers’ overall fuel bills and protect against price spikes while protecting air quality and creating local jobs.
Transportation Technology Investment Programs
California has developed the Carl Moyer program and the AB 118 program to drive technological advancements and help meet the goals of the LCFS. The Carl Moyer program yields near-term local air quality and health improvements, including diesel risk reduction in disadvantaged communities. To date, this program has cleaned up 55,000 engines and provided additional benefits through the AB 923 funds administered by local air districts. The AB 118 program provides immediate emission reductions and reduces the cost of advanced technologies by supporting increased manufacturing and economies of scale, positioning California at the forefront of advanced clean technology.
Driving Fuel Diversity and Economic Opportunity in California
In the same way that California took the lead in incubating and growing the silicon, computer, internet and solar industries, the state is already emerging as a national and global leader in expanding the clean fuels industry. California is already a clean-tech hub, attracting more than 50 percent of North America’s investments, according to the Cleantech Group. The state is the corporate home for 24 of the nation’s 74 advanced biofuel producers. In addition, eight advanced biodiesel producers already have facilities in the state. By creating new business opportunities and spurring innovation and investments in the clean fuels industry, numerous studies have shown that a clean fuels program can help grow the state’s economy and raise the employment rate while reducing oil dependency.
The AB 118 program has deployed 23,000 advanced clean and alternative fueled vehicles and equipment, and supported over 5,000 jobs. This program has helped companies make the business case to locate in California and develop new cutting-edge advanced transportation technologies.
The clean fuel supply chain, which includes companies producing renewable feedstocks and enabling technologies and alternative fueling infrastructure, will benefit by expanding and creating more jobs. Our analysis suggests that between 18,000 and nearly 48,000 new jobs could be created in the advanced biofuels industry as state and federal clean fuel standards are implemented.
The Need for Policy Certainty
The barriers to meeting the goals of the LCFS continue to be the ability to finance plants to reach commercial scale production and maintaining regulatory certainty. Maintaining policy certainty through the LCFS and supporting technology investment programs is key to ensuring the continued investment of private capital, allowing the commercialization process to expand as rapidly as possible.
Currently, the Carl Moyer program enhancements are scheduled to expire at the end of 2014 and the AB 118 program is set to expire at the end of 2015. The expiration of these programs within a year of each other would have a negative impact on the deployment of cleaner vehicles throughout the state. Without these programs to help facilitate vehicle deployment and market penetration, California will miss a significant opportunity to make real gains in improved air quality, clean vehicle adoption, and GHG emission reductions. SB 11 and AB 8 would extend the sunset date on these vital programs, ensuring continued investment in the state’s air quality and clean transportation targets.
If you are interested in our California Advocacy efforts, please contact Mary Solecki.