The transportation sector remains the largest source of GHG emissions in the State. Direct emissions from vehicle tailpipes, off-road transportation sources, intrastate aviation, etc., accounted for 40% of state-wide emissions in 2018.

The LCFS is designed to decrease the carbon intensity (CI) of California’s transportation pool by 20% by from 2010 levels by 2030, and provide an increasing range of low carbon and renewable alternatives to conventional petroleum-derived fuels. Providers of transportation fuels must demonstrate that the mix of fuels they supply for use in California meets the LCFS carbon intensity standards, or benchmarks, for each annual compliance period. They must report all fuels provided and track the fuels’ carbon intensity through a system of “credits” and “deficits.” Credits are generated by supplying fuels with lower carbon intensity than the benchmark whilst deficits result from providing fuels with a higher carbon intensity than the benchmark.