Restructuring Roundtable

1
The Regional Low Carbon Fuel Standard and
Sustainable Biomass in the Northeast
Michelle Manion NESCAUM (Northeast States for
Coordinated Air Use Management)

• Restructuring Roundtable
• Boston, MA
• December 4, 2009

2
Whats carbon intensity again?

• A measure of the total CO2-equivalent emissions
  produced throughout a fuels lifecycle
• Measured in grams of CO2-equivalent GHG emissions
  per unit of energy in fuel
• gCO2e/MJ

3
Carbon Intensity Calculation Conventional
Gasoline
Well-To-Tank Carbon Intensity 16.9
gCO2e/MJ Carbon Content
of Fuel 72.9 gCO2e/MJ Vehicle
emissions of CH4 and N20 2.47gCO2e/MJ
Lifecycle Carbon Intensity
92.3 gCO2e/MJ
4
Emissions from Indirect Land Use Change

• Plants and soils store large amounts of carbon
  that is released during land conversion
• Diversion of corn or other crops from existing
  markets to biofuels production can induce farmers
  elsewhere to bring new acreage into production
• Initial carbon release from land conversion event
  may exceed GHG benefits of displacing use of
  petroleum or other fossil fuels

5
Example of Indirect Land Use Change Emissions
One acre cropland devoted to corn ethanol
Source CARB 2009, based on GTAP modeling.
6
Local/Regional Biomass Feedstocks

• Municipal Solid Waste
• Only items that have reached the end of their use
  cycle (non-reusable, non-recyclable)
• The Northeasts most significant resource
• Less likely to induce additional LUC than virgin
  feedstocks
• Woody Biomass
• New England has substantial woody biomass but
  also many existing markets (e.g., pulp and paper,
  exports)
• NY and PA combine for approximately two-thirds of
  total supply
• Agricultural Residues
• New York and Pennsylvania dominate again,
  approximately 75 to 90 percent of agricultural
  biomass resources

7
Estimated Biomass Availability in the Northeast
Sources NESCAUM and INRS analysis, 2008 US EPA
2006-2008.
8
Current Regional Market for Woody Biomass
9
Climate Change Impacts on Forest Carbon
Source Canadian Forest Service, Knight Science
Journalism, 2009.
Source Natural Resources Canada, 2006.
10
Thank You
Northeast States for Coordinated Air Use
Management
89 South Street, Suite 602 Phone [phone]
Boston, MA 02111 Fax [phone]
Arthur Marin, Executive Director amarin_at_nescaum.o
rg
11
Transportation Sector GHGs are Important!

• GHG emissions from transportation are large and
  increasing (over 30 of total in most states)
• Transportation GHG emissions affected by
• Amount and type of transportation fuels
• Efficiency of motor vehicles
• Number of vehicle miles traveled

12
Northeast/Mid-Atlantic Low Carbon Fuel Standard

• December 2008 Commissioners from 11 Northeast
  and Mid-Atlantic states signed Letter of Intent
  to develop framework for regional LCFS
• Governors will sign LCFS Memorandum of
  Understanding this month

13
What is a Low Carbon Fuel Standard?

• Performance-based standard for fuels
• Does not pick winners or ban any fuel
• Regulates carbon intensity or lifecycle carbon
  emissions from fuels
• Requires displacement of conventional
  transportation fuels with advanced fuels that
  have low carbon intensities, such as
• Natural gas
• Low-carbon biofuels
• Electricity generated with renewable sources
• Hydrogen produced from renewable sources

14
What is a Low Carbon Fuel Standard?

• Would require reductions in carbon intensity from
  todays transportation fuels
• Gasoline
• Diesel
• Requires lifecycle GHG accounting for
• All baseline fuels
• Low-carbon substitutes on an opt-in basis
• Heating oil could be included
• NOT A CAP ON TRANSPORTATION EMISSIONS

15
How is the LCFS Different From Other Regulations?

• Typical vehicle and fuel standards regulate
  tailpipe emissions
• LCFS regulates GHG emissions from the full fuel
  lifecycle
• Cap-and-trade regulations limit total emissions
  allowed
• LCFS regulates only the intensity of emissions
  for a unit of fuel
• Total transportation emissions could still
  increase if total energy use increases
• LCFS complements vehicle efficiency standards and
  travel demand management strategies

16
Program Structure Who is Regulated?

• Providers of most petroleum and biofuels are
  regulated parties
• Providers of fuels that meet 2020 levels must
  opt in to earn credits
• Electricity
• Hydrogen
• Natural Gas

17
Flexible, Market-Driven Compliance Options

• Supply a mix of fuels with carbon intensity equal
  to the standard
• Provide fuels that have lower carbon intensity
  than the standard
• Use purchased or banked credits to meet the
  standard

18
Regional LCFS Initiative Stringency

• Californias LCFS requires a 10 reduction in
  GHG-intensity of fuels by 2020
• States are not required by any law to adopt the
  same LCFS stringency as California
• Given the interconnected nature of the regions
  fuel supply network, adopting the same stringency
  within the region is optimal
• Facilitate compliance for regulated parties
• Maximize program effectiveness

19
What is Lifecycle Analysis?

• An accounting of the emissions associated with
  each stage in the life of a product.
• Production
• Transport
• Storage
• Delivery
• End Use
• Cradle-to-Grave, Well-to-Wheels, Full Fuel
  Cycle
• Simple addition
• but keeping track of every stage can be very
  complicated!