California revises LCFS regulations to favor EV charging over biofuels – Charged EVs

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California revises LCFS regulations to favor EV charging over biofuels – Charged EVs


The California Air Resources Board has approved an update to the state’s Low Carbon Fuel Standard (LCFS) that will make it more difficult for biofuel producers to generate regulatory credits, and seems likely to result in the largest share of credits going to support electricity for EV charging.

The program, which is funded by fossil fuel suppliers whose product emissions exceed legislators’ emissions targets, delivered $2.8 billion to suppliers of biofuels and electricity for EVs last year.

BloombergNEF estimates that the program will provide something between $500 million and $1.4 billion to the charging sector per year, based on today’s credit prices. Recipients will include EV charging infrastructure providers, grid operators and automakers. Biofuels producers such as Phillips 66 and Marathon Petroleum will see their funding reduced.

Bloomberg predicts that other states and countries around the world will be taking note of the updates, as many have similar programs or are planning to introduce them. Like California, some have found that an oversupply of credits has caused prices to fall.

LCFS credit prices fell from $187 in 2021 to $66 recently. Credits in Germany’s program, the GHG quota, have been trading for less than $100 from previous highs of more than $400.

BNEF expects California’s new rules to reduce the supply of credits and stabilize credit prices. Under the new rules, transport fuel emissions must be at least 30% below 2010 levels by 2030, and 90% below by 2045. The previous target was a 20% reduction by 2030.

BNEF expects EV sales to reach 65% of California’s passenger vehicle sales by 2030, making electricity generation the largest producer of credits in 2030. BNEF predicts that biofuels’ share of the credits will fall from 74% in 2023 to 45% in 2030.

Source: Bloomberg



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