Aerial view of freeway interchange

California is entering the second decade of its transition to low-carbon transportation systems, and has set its sights on achieving carbon neutrality by mid-century. Zero-emission vehicles (ZEVs), particularly electric vehicles are expected to play the largest role in achieving this goal, but there will be demand for liquid fuels for decades to come. To support this transition, California’s policy makers are expected to rely on the Low Carbon Fuel Standard, a workhorse in shifting California’s transport fuel mix toward lower carbon-rated alternatives to petroleum fuels, using fuel lifecycle carbon-intensity (CI) ratings as its chief metric. With the need for large volumes of low carbon biofuels balanced against the challenges of sustainably scaling their production, there is an increased urgency to better understand the technologies, production potential and costs associated with these fuels, as well as how their emergence will impact the market for other fuels.

The research team is, in cooperation with GAMS Development Corporation, completing development of a new model of the LCFS credit market to 2030 for California, as a centerpiece of LCF Initiative fuels modeling activities.  The plan is to extend the modeling to include some treatment of alternative aviation fuel and policy, and scale the model up to national U.S. level later in 2022. 

This model will allow the research team to analyze alternative fuel market behavior in a new way, by understanding how the LCFS credit market, and all the fuels that rely on LCFS credits, will respond to policy, technology, or economic changes. A methods paper for journal submission on initial model runs is expected in early summer 2022. 

The model draws upon experience and data gained through a the Policy Institute’s long history of work on this topic, including evaluation of technoeconomic and lifecycle analyses for newer biofuels, ongoing tracking of the fast-evolving fuel mix in California under the LCFS and the state’s other transportation GHG policies, particularly those related to ZEVs, and state consideration of changes to the LCFS program, including setting new and adjusting existing CI reduction targets.