U.S. Department of Energy - Energy Efficiency and Renewable Energy
Federal Energy Management Program
California to Set a Carbon Limit for Transportation Fuels
January 24, 2007
California Governor Arnold Schwarzenegger signed an executive order
last week to establish a greenhouse gas standard for fuels sold in the
state. The new Low Carbon Fuel Standard requires a 10 percent decrease
in the carbon intensity of California's transportation fuels by 2020.
The state expects the standard to more than triple the size of the
state's renewable fuels market while placing an additional 7 million
hybrid and alternative fuel vehicles on the road. The standard will
help the state meet its greenhouse gas reduction goals set by Assembly
Bill 32, which the governor signed last year.
The new fuel standard applies to all refiners, blenders, producers, or
importers of transportation fuels in California and will use market-based mechanisms to allow fuel providers to choose the best way to
meet the requirement. For instance, fuel providers can blend more
ethanol or biodiesel into the fuels they sell; add a hydrogen fueling
station; or offset the carbon content of the fuels by purchasing
carbon credits from other sources, such as renewable energy
facilities. The governor's executive order calls for the California
Environmental Protection Agency to develop a draft compliance schedule
by the end of June. See the governor's
which includes a copy of the executive order.