Growth Energy Comments on Proposed California LCFS Amendments

Growth Energy appreciates the opportunity to provide comments to CARB regarding potential amendments to the Low Carbon Fuel Standard (LCFS) (“Proposed Amendments” or “Proposal”). Growth Energy is the world’s largest association of biofuel producers, representing 97 U.S. plants that each year produce 9.5 billion gallons of renewable fuel; 115 businesses associated with the production process; and tens of thousands of biofuel supporters around the country. Together, we are working to bring better and more affordable choices at the fuel pump to consumers, improve air quality, and protect the environment for future generations. We remain committed to helping our country diversify its energy portfolio to grow more green energy jobs, decarbonize the nation’s energy mix, sustain family farms, and drive down the costs of transportation fuels for consumers.

Growth Energy has previously submitted extensive comments demonstrating the vital role low carbon biofuels and higher biofuel blends can play in meeting California’s ambitious climate goals. As we have previously noted, biofuels have been among the largest contributors to the success of the LCFS program to date and are poised to continue to do so with appropriate updates to the program.

Unfortunately, the Proposal could impose new, costly, and unnecessary compliance burdens on bioethanol producers in the form of as-yet unknown and undefined “sustainability requirements” that risk reducing the availability of credit-generating biofuels within the LCFS Program. Of most significant concern, contrary to the California Administrative Procedure Act (APA) and the California Environmental Quality Act (CEQA), CARB is not providing the public and regulated community notice and the opportunity to comment on the substance of these requirements. Rather, CARB intends to outsource development of these vague sustainability “certification systems” covering a host of undefined “environmental, social, and economic criteria” to third parties. The Proposal specifies that CARB alone will determine which certification systems suffice, removed from the California regulatory process intended to protect the public and regulated community and without consideration of potential adverse environmental impacts consistent with CEQA. Without any clear indication in the Proposal or voluminous rulemaking materials as to what such “certification systems” may entail, it is difficult to determine whether they may in practice, unintentionally or otherwise, exclude as much as 60% of the current credit-generating fuels from the LCFS program. Such a reduction would create increased demand for fossil fuels, resulting in higher emissions of GHGs as well as toxic air pollutants.

If such “certification systems” did function in that manner, whether due to economic, social, or environmental criteria, the regulations could not comport with AB32’s requirement for cost-effective, technology-neutral greenhouse gas (GHG) emissions reductions. For example, removal of even a portion of currently credit-generating biofuels could substantially increase compliance costs on obligated parties and passed-down costs to consumers at the pump, disproportionately harming low-income communities that are most impacted by fuel costs. None of these potential impacts have been adequately identified or evaluated in CARB’s rulemaking materials accompanying the Proposal.

The proposed sustainability requirements are also legally flawed because they are not reasonably necessary to effectuate AB32, or to address any regulatory purpose provided in CARB’s rulemaking materials. Put simply, CARB has failed to identify any credible evidence of direct land use conversion that could be mitigated by some form of feedstock tracking based on social, economic, and environmental criteria of an unknown form and substance. As many decades of data has demonstrated, increases in bioethanol demand have consistently been met with increased yield per acre, not with increased corn acreage. Further, other regulatory mechanisms — including oversight from the U.S. Environmental Protection Agency (EPA) under the Renewable Fuel Standard (RFS) Program — adequately ensure that U.S. feedstocks are sustainably sourced and do not contribute to land use conversion. CARB itself also already imposes a highly conservative and overestimated penalty to the carbon intensity of bioethanol in the LCFS program that greatly disincentivizes bioethanol as compared to other fuel types. And CARB lacks authority under AB32 to, through a third-party certification system, impose wide-ranging socio-economic criteria that are unrelated to the cost-effective reduction of GHG emissions.

We understand that CARB is postponing the public hearing on the Proposed Amendments in order to undertake “more consideration of the proposed sustainability guardrails, among other topics.” Growth Energy agrees such additional consideration is necessary. Indeed, consistent with the California APA, if the Proposed Amendments intend to encompass some form of feedstock tracking requirements tailored to address a specific environmental need, we urge CARB to allow regulated parties to comment on a subsequent proposal that includes consideration of potential environmental and economic consequences.

In addition to these issues, the Proposed Amendments fail to include several key updates and as a result, fall far short of unlocking the LCFS Program’s full decarbonizing potential. These omissions include declining to recognize and incentivize low-carbon agricultural practices, failing to update emissions factors and lifecycle modeling to reflect the best available science, and continuing to prohibit the use of E15 in the state.

We encourage CARB to reconsider these aspects of the Proposal to ensure the real and significant GHG emissions reductions benefits of biofuels are realized under the LCFS. We look forward to engaging collaboratively with the agency to support its efforts.

Thank you for the opportunity to provide input on the 2024 LCFS Amendments. The LCFS Program is a critical tool to addressing climate change, and we look forward to working with CARB to ensure the role of biofuels in making California’s fuel mix more sustainable and help the state achieve its progressive climate goals through the expanded use of bioethanol.