On August 12th, California Air Resources Board (CARB) released text to modify the state’s Low Carbon Fuel Standard (LCFS) program and on August 16th recirculated the Environmental Impact Analysis (EIA). Substantive changes are seen only in the first document.

The latest proposed changes consider many of the stakeholder comments received from the workshops. Central to these changes is a 9% reduction in Carbon Intensity (CI) beginning in Q1 2025, which will start drawing down the existing credit surplus and target a 30% CI reduction by 2030. CARB is also emphasizing electrification as the cornerstone of its strategy for the transportation sector. However, a 20% cap on virgin bio-feedstock, particularly soy and canola, raises questions about the future scale-up of Renewable Diesel. In aviation, while Sustainable Aviation Fuel (SAF) will continue to generate credits, intrastate air travel is exempt from deficit generation, easing compliance slightly. As bio-based feedstocks come from across borders (inter-state and international), CARB seems to be building harmonization across markets. In the proposed rules, it is aligning its land-use change and deforestation requirements with certification schemes. Our analysts have reviewed these and other changes in this most recent text released by CARB.