Appeals court upholds California LCFS again

Market: Biofuels, Emissions, Natural gas, Oil products
18/01/19

A federal court today upheld California's Low-Carbon Fuel Standard (LCFS), turning away the latest attempt by refiners and ethanol producers to overturn the program.

A three-judge panel of the 9th US Circuit Court of Appeals unanimously dismissed the legal challenge from the American Fuels and Petrochemical Manufacturers (AFPM) and other groups, saying they had no legal ground on which to wage their fight. Previous court decisions and changes California has made to the program rendered the appeal moot, the judges said.

"To the extent plaintiffs raise new arguments on this appeal, we conclude that they are without merit," the judges said in their ruling.

AFPM, the American Trucking Associations and ethanol industry group Growth Energy had argued that the LCFS is unconstitutional because it unfairly discriminates against out-of-state crude oil and ethanol through its life cycle greenhouse gas emissions analysis, which California uses to set carbon intensity scores for fuels sold in the state.

But the court previously upheld the LCFS in 2013, dismissing similar arguments. And less than a month before holding oral arguments in the case in September, it rejected a similar challenge to Oregon's Clean Fuels Program.

Those decisions, along with the fact the California Air Resources Board amended and readopted its regulations in 2012 and 2015, left the court with little choice but to dismiss the appeal, the judges said.

Lawyers for the groups acknowledged as much during the oral arguments last year, suggesting they were likely to seek help from the full 9th Circuit or appeal to the US Supreme Court. AFPM, which was a party to the Oregon lawsuit, recently petitioned the high court to take that case. The group said it is reviewing today's decision.

The 9th Circuit previously upheld the program in 2013, saying it did not violate the Constitution's Commerce Clause, but sent the case back to a lower court to consider any unresolved issues. That court dismissed the case in 2017 year and the groups appealed that decision.

The LCFS requires a 20pc reduction in the carbon intensity of transportation fuels by 2030.

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