The Regional Low Carbon Fuel Standard and Sustainable Biomass in the Northeast

Restructuring Roundtable

Boston, MA

December 4, 2009

The Regional Low Carbon Fuel Standard and Sustainable Biomass in the Northeast

Michelle Manion

NESCAUM

(Northeast States for Coordinated Air Use Management)

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What’s “carbon intensity” again?

• A measure of the total CO2-equivalent emissions produced throughout a fuel’s lifecycle

• Measured in grams of CO2-equivalent GHG emissions per unit of energy in fuel

gCO2e/MJ

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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

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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

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Example of Indirect Land Use Change Emissions

One acre cropland

devoted tocorn ethanol

.06 forest.24 grasslandconverted toagriculture

~30 metric tons CO2 released

Saves~1 metric ton

CO2 emissionsannually

Produces~400

gallons/yrethanol

-29 CO2 Net GHG Emissions

Source: CARB 2009, based on GTAP modeling.

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Local/Regional Biomass Feedstocks

• Municipal Solid Waste– Only items that have reached the end of their use cycle

(non-reusable, non-recyclable) – The Northeast’s 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

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Estimated Biomass Availability in the Northeast

Biomass Quantity Biomass Category Units

2010 2020 Woody Biomass (likely availability)

5,051,120 5,177,398

Municipal Solid Waste (Yard Waste, Paper, Food Scraps, Wood Waste)

20,390,809 20,978,928

Livestock Waste 5,215,063 5,355,422

Wastewater Biosolids

Dry tons

725,208 742,761

Total 31,382,200 32,254,509

Wastewater Biogas Cubic feet

27,892,590 28,567,719

Total Electricity Potential MW 1,144 1,174

Total Homes Heated by Wood Pellets (6 tons per home)

Homes 115,000 117,500

Sources: NESCAUM and INRS analysis, 2008; US EPA 2006-2008.

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Current Regional Market for Woody Biomass

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Climate Change Impacts on Forest Carbon

Source: Natural Resources Canada, 2006.

Source: Canadian Forest Service, Knight Science Journalism, 2009.

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Thank You

Northeast States for Coordinated Air Use Management

89 South Street, Suite 602

Phone 617-259-2000

Boston, MA 02111

Fax 617-742-9162

Arthur Marin, Executive [email protected]

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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

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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

Connecticut

Delaware

Maine

Maryland

Massachusetts

New Hampshire

New Jersey

New York

Pennsylvania

Rhode Island

Vermont

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“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

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“What is a Low Carbon Fuel Standard?”

• Would require reductions in carbon intensity from today’s 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

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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

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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

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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

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Regional LCFS Initiative: Stringency

• California’s 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 region’s fuel supply network, adopting the same stringency within the region is optimal

• Facilitate compliance for regulated parties

• Maximize program effectiveness

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• 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!

What is Lifecycle Analysis?