C. Ward-de Leon/UCS

5 Reasons Clean Fuel Standards are the Secret Key to Decarbonizing Transportation

, Senior scientist | December 14, 2020, 10:16 am EDT
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Clean Fuel Standards like the California Low Carbon Fuel Standard (LCFS) have been around for more than a decade but have not attracted the attention of more narrowly targeted policies promoting electric vehicles, biofuels, or renewable power. Recently, however, Clean Fuel Standards are enjoying something of a resurgence, with states from coast to coast (including Washington, Nevada, Colorado, Nebraska, Minnesota, Illinois and New York) considering joining California and Oregon in adopting this proven model to support transportation decarbonization. Washington, DC is also taking notice. They see Clean Fuel Standards as an opportunity to get federal fuels policy back on track. Replacing the biofuels-focused Renewable Fuel Standard with a more flexible, more comprehensive science-based performance standard would accelerate transportation electrification while supporting continued improvement in biofuels and innovation across today’s and tomorrow’s transportation fuel technologies.

I’ve been studying Clean Fuel Standards for more than a decade and have published extensively on the topic. My recent factsheet provides a high-level overview of this proven approach to transportation decarbonization. Here are the top five things you should know about Clean Fuel Standards:

  1. Clean Fuel Standards support electric vehicles. While many people don’t think of electricity as a transportation fuel, EVs powered by renewable energy are key to phasing petroleum out of our transportation sector over the next few decades. The performance-based design of a Clean Fuel Standard supports EVs in direct proportion to their climate benefits, providing the largest support to the use of renewable power for transportation (more details here).
  2. Clean Fuel Standards reward biofuels producers for producing cleaner biofuels. Existing biofuels policies focus mostly on producing more biofuels, which misses the opportunity for biofuel producers to improve the performance of the fuels they produce. Clean Fuel Standards reward reductions in pollution rather than increases in production, which encourages biofuel producers to improve the efficiency of their operations, use renewable sources of energy in their production processes, and switch to lower carbon starting materials (more details here).
  3. Clean Fuel Standards bring farmers into the clean fuels game. People are paying increasing attention to the opportunity for farmers to help address climate change, through reduced pollution and adoption of practices that build healthy soils. It’s common sense that a lower carbon crop makes a lower carbon biofuel, and a well-designed Clean Fuel Standard can support farmers reducing emissions from growing the crops used to make biofuels (more details here).
  4. Clean Fuel Standards provide reliable, long-term support for transportation decarbonization without taxpayer funding. The role of the government in a Clean Fuel Standard is to certify how polluting each fuel is and set a gradually declining standard for carbon intensity (climate pollution per equivalent gallon of fuel). Fuels cleaner than the standard generate credits, more polluting fuels generate deficits and private transactions between credit and deficit holders provide support for clean fuels at no cost to the government or taxpayers (more details here).
  5. Clean Fuel Standards hold oil companies accountable. Emissions from petroleum fuels in the United States, most of which are used for transportation, exceed those from coal or natural gas. And oil companies, aided by their trade associations, have played a major role in funding ongoing climate denial campaigns and efforts to block climate policies for decades. A Clean Fuel Standard complements efforts to hold oil companies accountable for past harms, by requiring oil companies to cover part of the cost of replacing combustion fuels with clean electricity while also spurring them to decarbonize the fuel for internal combustion vehicles (more details here).

Clean Fuel Standards are a proven tool that California and Oregon have been using to decarbonize transportation, and states across the country and the federal government are turning to it as they begin to align their policies with the need to address the building climate crisis. My grandiose title notwithstanding, Clean Fuel Standards are not the one policy to rule them all so much as an important complement to policies for vehicle manufacturers, fuel and electricity producers and farmers that ensures that all these industries are pulling in the same direction to decarbonize transportation across all vehicle and fuel types.

C. Ward-de Leon/UCS

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  • Eric Strid

    Clean Fuel Standards in CA and OR have produced an incremental, trackable impact on emissions. The impact on fuel prices is speculative, but likely limited. But clean fuels programs are no silver bullet. Even Oregon’s expanded target of 25% by 2035 (through EO 20-04) is far from the IPCC target of 45% below 1990 by 2030.

    Like pricing current emissions, Clean Fuels does not fix the big market failure that locks in vehicle emissions–consumers don’t consider more than 2-3 years of operating costs, and a few cents per gallon is ignored.

    The lowest cost approach to vehicle decarbonization is to realize that we’re buying new infrastructure every day, and those purchases must be steered to ZEVs. Pre-COVID, US new-vehicle purchases were about 6% of the fleet annually. A little arithmetic implies that getting to 45% by 2030 requires ramping to 100% ZEV sales by 2025–6% for five years, plus a ramp to 2025. 100% EV sales by 2025 is exactly what Norway is demonstrating. Or we can somehow find trillions to fund more than 6% per year later.

    Capital cost crossovers will come around 2025 for mid-market cars and before 2030 for light trucks. The fuel savings imply trillions of dollars saved by not buying petroleum. http://cgcan.org/wp-content/uploads/2019/12/SER-Dec-2019-final-191212.pdf

    And the new administration should give automakers carrots and sticks to electrify at that rate. If the US doesn’t, it will fall behind European and Chinese automakers.

    UCS could be an authoritative voice on these necessities.