Northeast and Mid-Atlantic Regional Low Carbon Fuel Standard

1
Northeast and Mid-Atlantic RegionalLow Carbon
Fuel Standard

• Marjorie Kaplan, Dr. P.H.
• Office of Climate and Energy
• New Jersey Department of Environmental Protection
• October 27, 2009

2
Overview of presentation

• Context for LCFS
• Structure of 11 state effort
• Issues under discussion
• Next steps

3
Transportation Context

• Transportation emissions are significant, rising,
  and hard to control.
• Three components for reducing emissions
• VMT (smart growth, transit, etc.)
• Vehicles (CA-LEV/ZEV, CAFE, etc.)
• Fuels (LCFS, RFS2)
• LCFS Low Carbon Fuel Standard

4
LCFS Goals

• Reduce carbon intensity of fuel
• Reduce petroleum dependence and diversify
  transportation energy supply
• Harness market forces to drive technology
  development (e.g., EVs, Advanced Biofuels)
• Address lifecycle emissions
• Influence national policy (fuels, lifecycle
  emissions)

5
What is a Low Carbon Fuel Standard?

• Performance-based standard for fuels
• Does not cap fuel emissions
• Regulates carbon intensity of the fuels
  (gCO2e/MJ)
• Allows displacement of high carbon fuels with
  lower carbon intensity fuels
• Would require reductions in carbon intensity from
  todays fuels

6
Northeast Regional LCFS

• Extend RGGI collaboration to transportation
  sector.
• RGGI PA Commissioners drafting MOU for December
  2009
• Similar to CA, but different
• Fuel supply
• Regulated parties
• Heating oil (?)

7
National Policy Context

• California LCFS
• Federal RFS2
• Differences with carbon intensity standard
• National climate legislation

8
Regional LCFS Initiative Structure

• State staff - Environment, Energy and Natural
  Resource Agencies
• NESCAUM - technical and policy analysis
• Steering Committee and Work Groups
• 6 Work Groups Implementation, Sustainability,
  Legal Authority, Communications, Baseline,
  Economic Impacts
• Stakeholder Input

9
Regional LCFS Initiative Policy and Technical
Issues (1)

• Regulated parties
• Compliance target
• Baseline CI for gasoline and diesel
• Inter-regional and national issues
• Include heating oil?

10
Regional LCFS Initiative Policy and Technical
Issues (2)

• Economic analysis
• Sustainability criteria
• Indirect land use
• Credit creation and trading
• Monitoring and enforcement

11
Issues for Regional LCFS

• Indirect land use change (iLUC)
• Using land for biofuels increases demand for
  land, driving some deforestation, other changes
• CA (LCFS) and EPA (RFS2) using established models
  to estimate magnitude
• Regulated parties (distributors, importers, etc.)
• Scope (heating oil?)
• Stringency (10 reduction in 10 years?)

12
Building on RGGI Success

• RGGI shows the potential for our region to
  innovate and provide national leadership
• First mandatory US carbon market (for EGUs)
• Clear influence on Waxman-Markey
• LCFS applies RGGI lessons to address
  transportation emissions
• Regional collaboration
• Energy environment connection

13
www.nescaum.org/documents/lcfs-report-final.pdf
14
Conclusion and Next Steps

• Develop Governors MOU
• Continue Stakeholder Input
• Continue Economic Analysis and other Policy
  Development
• Develop Program Framework

15
Northeast and Mid-Atlantic RegionalLow Carbon
Fuel Standard

• Marjorie Kaplan, Dr. P.H.
• [phone]
• Marjorie.Kaplan_at_dep.state.nj.us