In August, the California Air Resources Board (CARB) unveiled proposed changes to its Low Carbon Fuel Standard and initiated a 15-day public comment period. The American Soybean Association is actively reviewing the proposal, which at first glance appears to pose significant challenges for soy-based biofuels.
Established in 2009, CARB’s LCFS is a cornerstone of California’s strategy to reduce greenhouse gas emissions and other pollutants. Launched in 2011, the LCFS program sets benchmarks for the carbon intensity of fuels and rewards those with lower emissions and penalizes those that exceed the benchmark.
The CARB proposal introduces, among other things, the following changes:
- Limiting the use of soybean oil: CARB proposes a 20% company-wide limit on the use of vegetable oils, including soybean and canola oil. Biofuels that exceed this limit would be classified as fossil fuels. Although CARB hinted at such a limit last year, it was not included in previous proposals or workshops. CARB’s rationale is to prevent the LCFS from incentivizing increased production of vegetable oil-based biodiesel just to meet California’s demand. Data shows that in the first quarter of 2024, 30% of biodiesel shipped to California was virgin oils.
- Limiting biodiesel processes: The proposal gives the CARB executive director the ability to stop accepting new biodiesel process applications in 2031 if zero-emission vehicle sales reach a certain threshold. This could limit future market expansion for biodiesel.
- Sustainability criteria: A phased timeline of sustainability requirements with specific benchmarks will be implemented. Starting in 2026, fuel producers will be required to provide data on the boundaries of the farms from which soybeans come.
- Regional land-use change: The proposal introduces more conservative values for land-use change for different commodity producing regions and assigns different scores depending on the geographical production area.
- Carbon intensity thresholds: CARB plans to increase carbon intensity (CI) reduction targets from 5% in 2025 to 9% before stabilizing the curve, while maintaining a 30% reduction target for 2030.
The ASA submitted comments on the proposed changes, raising particular concerns about the proposed cap on soybean oil.
