Updates with additional details, timeline from CARB official.
California regulators say updates to the state's Low Carbon Fuel Standard (LCFS) are coming soon, after apparently missing a key deadline to have amendments ready for potential adoption next month.
The program updates, which agency staff have been working on for well over a year, need to be available for a 45-day public comment before a potential board vote. But that window has now closed, with the next board meeting scheduled for 25-26 January 2024. The next meeting after that is 22-23 February 2024.
"We are still looking to get this out before the end of the year with a Q1 2023 board vote on the amendments," CARB low carbon fuels policy manager Jordan Ramalingam said today at the Renewable Natural Gas (RNG) Coalition conference in Dana Point, California.
RNG market participants have been anxiously awaiting the final rulemaking, which may include restrictions on credits for renewable natural gas. The fuel accounted for 18pc of all new LCFS credits in the second quarter of the year.
Ramalingam said CARB is aware of industry concerns and believes biomethane projects can help the state with its climate goals, such as by providing a feedstock for hydrogen production.
"We are not looking to strand any assets out there, so that is something we are keeping in mind," he said. "We have had a lot of feedback on biomethane policy concepts, and we are taking all of that into account."
Unlike California, Oregon has not been discussing any biomethane restrictions in its Clean Fuel Program. The state tightened the program targets last year to require a 37pc reduction in the carbon intensity of transportation fuels by 2035. Conventional, higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution of approved, lower-carbon alternatives.
"Do we touch the targets before then? It wouldn't surprise me," Oregon's interim Clean Fuels Program manager Bill Peters said. "Our commitment is to have a healthy program and commercialize new fuels and technologies. There is always that trade-off with certainty over the targets and us reacting when there is a need to react."
The lack of action by CARB on the amendments has weighed on the LCFS market, with spot credit prices falling by $2/t yesterday to $71.50/t and trades heard below $70/t this morning.
Revisions to the program could help draw down the more than 18.1mn t of available credits and help boost the credit price, which has fallen from $200/t since early 2021.
The California reduction target is 20pc by 2030 but agency staff have floated potential changes, including a 30pc by 2030 mandate. Staff also have discussed a potential mechanism to automatically advance tougher targets when unspecified credit and deficit conditions are met.
"We think the auto-accelerator mechanism is very important and we are strongly looking at that for this package," Ramalingam said today.