Oregon DEQ: Low Carbon Fuel Standard

Burning fossil fuel in our cars and trucks, and other forms of transportation makes up about 33 percent of Oregon's greenhouse gas emissions. The low carbon fuel standard, authorized by the Oregon Legislature in 2009 as part of House Bill 2186 is one effective strategy to reduce emissions of carbon dioxide, a significant greenhouse gas, from the transportation sector.

What is a low carbon fuel standard?
Who would be affected by a low carbon fuel standard?
How are businesses and consumers protected?
How will DEQ develop a low carbon fuel standard?
DEQ's low carbon fuel Standard Advisory Committee and rulemaking.
Is Oregon's agriculture affected?
What is Washington State doing?
More information

What is a Low Carbon Fuel Standard?

Each type of transportation fuel (gasoline, diesel, natural gas, etc.) contains carbon in various amounts. This is also known as the "carbon content" of a fuel. When the fuel is burned, that carbon turns into carbon dioxide (CO₂) pollution or methane, which are greenhouse gases. The lower the carbon content of a fuel is, the fewer greenhouse gas emissions it produces. Extracting the raw material or growing the raw material used to make the fuel also causes greenhouse gases to be emitted. As a fuel is refined, transported, and stored, different amounts of greenhouse gases are produced as a result. The sum of all the greenhouse gases emitted throughout the lifecycle of the fuel, from sourcing and refining through the distribution to the end use as the fuel is used in an engine, is called the "carbon intensity." The aim of Oregon's low carbon fuel standard will be to reduce the average carbon intensity of the mix of transportation fuels used in Oregon by 10 percent by the year 2020.

The low carbon fuel standard program would not mandate the use of any specific fuel. Instead, fuel suppliers and distributors can use a mix of traditional fuels and lower carbon alternative fuels to meet the standards. As the standard tightens over time, fuel suppliers and distributors will need to increase the use of lower carbon fuels. Other aspects of the program involve the use of market-based low carbon fuel credits that a fuel supplier could use to help meet their obligations under the program. DEQ will be calculating the carbon emissions attributed to various transportation fuels throughout its lifecycle, including the fuel’s production, storage, transport and use, and changes in land use associated with the fuel.

Biofuels such as ethanol and biodiesel, as well as alternative fuels such as hydrogen, electricity, compressed natural gas, and biogas can all help Oregon meet this standard. Electricity is an emerging transportation fuel and its "carbon content" is dependent on how the electricity is generated. In addition to reducing greenhouse gas emissions, a low carbon fuel standard can help promote the production of advanced bio-fuels in Oregon, which would provide economic growth opportunities for the state.

Who would be affected by a Low Carbon Fuel Standard?

The regulatory requirements to meet a low carbon fuel standard would apply to major transportation fuel producers, importers, and distributors. The obligation to meet a low carbon fuel standard would not apply to local gas stations for example, small business, or individuals.

A low carbon fuel standard could result in minor fuel price increases over time. It is also possible that a low carbon fuel standard could lower fuel prices over time as more locally produced alternative fuels come on the market. Oregon's low carbon fuel standard program will include safeguards to monitor fuel prices and make adjustments to protect consumers if prices become too high because of the low carbon fuel standard requirements. DEQ's Low Carbon Fuel Advisory Committee will be helping DEQ discuss all the key elements of the low carbon fuel standard, including the expected economic affects, in order to design a low carbon fuel standard program that meets Oregon's needs.

How are Businesses and Consumers Protected?

Oregon's standard must include exemptions and deferrals as needed to ensure adequate supply, avoid cost increases and ensure that Oregon's fuel prices are in line with neighboring states. In addition, the standard must include criteria and testing requirements to ensure the quality of fuels.

How Will DEQ Develop a LCF Standard?

In designing a low carbon fuel standard program DEQ and the Environmental Quality Commission (EQC) must consider flexible implementation approaches to minimize compliance costs. The EQC will consider safety, feasibility, cost effectiveness, and the extensive analyses already undertaken by other states considering similar measures. In addition to hosting an advisory committee of diverse interests and stakeholders, DEQ plans to consult with the California Air Resources Board, which approved rules to implement a low carbon fuel standard in April 2009, as well as other state agencies in Washington state and the Northeastern states, which are in various stages of designing their own low carbon fuel standards.

California has been pioneering the design of a low carbon fuel standard, and DEQ can model much of Oregon's program on that work. However, DEQ will also customize the program as needed to best fit conditions in Oregon, as well as include several special features required by the Oregon legislature in House Bill 2186 (2009).

More information about California's low carbon fuel standard.

HB2186 also ensures the ongoing role of Oregon's Legislature in overseeing the progress of a low carbon fuel standard for Oregon.

DEQ's low carbon fuel standard rulemaking and Low Carbon Fuel Advisory Committee

In 2010, DEQ will develop a proposed low carbon fuel standard rule to be considered by the EQC. To help develop that rule, DEQ is working closely with an advisory committee of diverse interests and stakeholders to help design an effective low carbon fuel standard program. Once a proposed rule is developed, DEQ will begin a formal and public rulemaking process to seek public and stakeholder review and comment on the proposed rules. DEQ's low carbon fuel standard rule may be modified based on public comment. DEQ hopes to take its final proposed rule to the EQC for consideration in December 2010.

You can receive updates throughout DEQ's committee and rulemaking process by signing up for our email list.

Is Oregon's Agriculture Affected?

House Bill 2186 does not place requirements on farmers or agricultural operations, and the bill specifically exempts farm trucks, tractors and logging trucks. However, the low carbon fuel standard may result in new markets for Oregon farm and forest products such as canola and mustard, which can be crushed to make biodiesel. With advances in technology, cellulosic ethanol may soon be produced from agricultural residues and wood.

What is Washington State Doing?

Under Executive Order 09-05, the Washington Department of Ecology is assessing what low carbon fuel standard provisions, including low carbon fuel standards currently under consideration in other states, would best help Washington State meet its greenhouse gas emissions reduction goals. The Department of Ecology will submit recommendations to the Governor by July 2010 on whether to pursue adoption of a Washington low carbon fuel standard, what low carbon fuel standard provisions would best fit, and how to implement a program if recommended.

More Information

For more information about DEQ's efforts to develop a low carbon fuel standard, contact Sue Langston, Air Quality Planner at 503-229-5215 or via e-mail.

Oregon's Low Carbon Fuel Standard