California\u2019s Low Carbon Fuel Standard (LCFS) program has been in effect for just about 10 years. And in the transportation industry, a lot can happen in 10 years. Over that time, the LCFS has fundamentally changed the way the California\u2019s fuel and transportation industries operate, and its influence has spread to other state and local governments and even other nations. <\/p>\n\n\n\n
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The reason behind this stems from California\u2019s stated\ndesire, through laws and regulations, to \u201cgo green.\u201d With a goal of reducing\npetroleum dependency and greenhouse gas (GHG) emissions, California turned to\nthe LCSF. As a result, the LCFS has led to an influx of lower-carbon fuels into\nthe California market. <\/p>\n\n\n\n
Of all the fuels that have come to the forefront because of\nCalifornia\u2019s moves, two \u2014 biodiesel and renewable diesel \u2014 have become among\nthe most trusted solutions thanks to their ability to reduce harmful emissions\nand their ease of use. Far too many \u201cgreen\u201d fuels come with a lot of drawbacks,\nbut these two have the best pro to con ratio. <\/p>\n\n\n\n
Now, fuel marketers and fleets are taking advantage of the\nbenefits of both fuels with products that blend them together. OEMs and fuel\nmakers are innovating in a way that they never have before, and it is changing\nthe entire fuel marketplace. <\/p>\n\n\n\n
A Closer Look at the LCFS<\/strong><\/p>\n\n\n\n The LCFS is one of the core strategies to reduce greenhouse\ngas emissions under the California Global Warming Solutions Act of 2006, also\nknown as AB 32. The LCFS is overseen by the California Air Resources Board\n(CARB) and is considered one of the most progressive clean air regulations in\nthe world. This regulation even eclipses some regulations in regulation-heavy\nEurope. <\/p>\n\n\n\n The goal is to reduce the carbon intensity in California\u2019s\nair. Carbon intensity is the measure of GHG emissions associated with producing\nand consuming a fuel. The LCFS was designed to reduce the carbon intensity (CI)\nof the state\u2019s transportation fuel by at least 20% by 2030 compared with a 2010\nbaseline. <\/p>\n\n\n\n The California Air Resources Board (CARB) assigns CI scores\nto all fuels. A lower score means lower emissions. To calculate a CI score,\nCARB considers the total amount of GHG emitted for the production and use of a\nfuel \u2014 a \u201cwell to wheels\u201d approach that captures direct effects like fuel\nproduction and usage and indirect effects like land use for crop-based\nbiofuels.<\/p>\n\n\n\n Average CI scores across the trucking industry are:<\/p>\n\n\n\n For compliance, CARB issues credits and deficits to\nregulated parties \u2014 typically petroleum producers, wholesalers, and importers \u2014\nbased on the carbon intensity of the fuels they produce and sell. They must\nshow that the fuels they supply meet CI benchmarks and reconcile any deficits\non an annual basis. Nonregulated parties are affected because the fuel\nproviders are incentivized to offer low-CI fuels.<\/p>\n\n\n\n The LCFS does not require the use of specific fuels. Rather,\nit just creates a market for LCFS credits and lets the market decide how to\nobtain them. Companies work within this framework, trade credits, and develop\nproducts and services based upon them. <\/p>\n\n\n\n Biodiesel and Renewable Diesel Take Off<\/strong><\/p>\n\n\n\n Fortunately for those operating in the biodiesel and\nrenewable diesel fuel market, the LCFS scheme is rewarding them. The market and\noverall transportation sector \u2013 trucking\ncompanies at large<\/a> \u2013 has liked what it has seen with biodiesel and\nrenewable diesel. Adoption rates have been increasing within certain trucking\nsegments. <\/p>\n\n\n\n Combined, they represented the most popular alternative to petroleum diesel<\/a> in 2019, which itself represents a five-year stint of rising consumption. These are big numbers that represent a monumental shift in the fuel sector. Trucking companies of all stripes see the writing on the wall when it comes to the types of energy they use to power their fleets. <\/p>\n\n\n\n [wp_ad_camp_2] <\/p>\n\n\n\n <\/p>\n\n\n\n But there are real reasons behind why biodiesel and\nrenewable diesel has taken off in the past half-decade. The fact is they are\nhigh-quality fuels that reduce emissions, offer strong performance and are easy\nfor fleets to adopt. This last one is especially important, as adoption\ncomplexity is often one of the leading reasons fleets choose not to adopt a\nrenewable fuel approach. Good old-fashioned oil is still too easy and familiar.\n<\/p>\n\n\n\n But the thing is, biodiesel is becoming just as familiar.\nBiodiesel has been used for decades as a cleaner burning alternative to\npetroleum diesel. It is made from renewable resources, including used cooking\noil, waste animal fats and vegetable oils. Its quality is backed by stringent\nstandards specifically spelled out in ASTM D6751. <\/p>\n\n\n\n What are the Differences?<\/strong><\/p>\n\n\n\n Biodiesel and renewable diesel also have a higher Cetane\nnumber and more lubricity than standard oil used in conventional gasoline.\nBurnishing its clean credentials, this type of fuel burns cleaner and sends\nless particulate matter into the air or to diesel particulate filters. Not only\ndoes this mean cleaner air, but it also means mechanical issues decrease.\nBiodiesel minimizes the impact on critical emissions control devices.<\/p>\n\n\n\n Renewable diesel is made from the same feedstocks as\nbiodiesel, but it\u2019s a hydrocarbon fuel that\u2019s chemically more similar to\npetroleum diesel than biodiesel. As a result, renewable diesel falls under a\ndifferent diesel specification, ASTM D975. Like biodiesel, it has higher Cetane\nthan petroleum diesel, and it also has lower sulfur content and aromatics. One\nbenefit that gives it an edge lies in the nitrogen oxide (NOx) emissions\nfootprint. Renewable diesel\u2019s NOx emissions are lower than biodiesels.<\/p>\n\n\n\n Some companies are now offering a blended option. Blending\nrenewable diesel and biodiesel results in a finished fuel that is stronger than\nthe individual components. Call it the best of both worlds, if you will. Put\nthe two together and they are stronger than they would be individually. <\/p>\n\n\n\n The concept is similar to alloys, in which metals are\ncombined to make them better in some way \u2014 whether stronger, lighter or more\nresistant to corrosion. In the case of a renewable diesel and biodiesel blend,\nthe renewable diesel brings a great Cetane number and low NOx emissions.\nBiodiesel brings a natural lubricating property, as well as more complete\ncombustion thanks to the higher levels of oxygen it contains. The blend results\nin very low hydrocarbon and particulate matter emissions.<\/p>\n\n\n\n The World Shifts<\/strong><\/p>\n\n\n\n Fleets today know that by doing their part to decrease fuel\ncosts and lower emissions, not only are they ensuring they have a good\nreputation, but they are also doing their part to help lower humanity\u2019s\nenvironmental impact. Yet, there has often been some friction between\ntransportation companies and the biggest state they operate in, California. <\/p>\n\n\n\n California\u2019s Low Carbon Fuel Standard gets a lot of\nattention and for good reason. It\u2019s one of the leading clean air regulations in\nthe world, and California\u2019s economy is bigger than that of most countries. It\nshould be no surprise that what happens in California does not stay in\nCalifornia, unlike its desert neighbor to the east. What happens in California\nhas ramifications across the globe.<\/p>\n\n\n\n What California is doing is catching on. At least 15 U.S.\nstates plus Puerto Rico have enacted legislation around GHG emission\nreductions, and some other states are requiring agencies to report on their\nemissions. Additionally, some states have committed to GHG reduction goals through\nexecutive action but don\u2019t yet have binding statutory targets. The pendulum is\nswinging firmly in the direction of lower emissions and higher \u201cgreen cred.\u201d<\/p>\n\n\n\n Additionally, the sustainability trend is growing in the\nprivate sector as investors, boards of directors, customers, and the public\ndemand that companies reduce their carbon footprint. Many huge banks are no\nlonger funding projects that involve oil extraction, deforestation, or\notherwise. <\/p>\n\n\n\n