ITS-Davis has published a joint research report entitled "Implementing Performance-Based Sustainability
Requirements for the Low Carbon Fuel Standard – Key Design Elements and Policy Considerations." The reports reviews existing sustainability requirements in other biofuel programs, and discusses key design elements needed for implementing sustainability requirements for California's LCFS and remaining challenges.

The research draft was co-authored by the following researchers:

• Sonia Yeh (ITS)
• Daniel A. Sumner (Agricultural & Resource Economics and UC Agricultural Issues Center)
• Stephen R. Kaffka (California Biomass Collaborative, and Department of Plant Sciences)
• Joan M. Ogden (ITS and Environmental Science and Policy Department)
• Bryan M. Jenkins (Biological & Agricultural Engineering and UC Davis Energy Institute)

Download the full report

Executive Summary:

California’s Low Carbon Fuel Standard (LCFS) adopted by the California Air Resources Board (CARB) on April 23, 2009 requires a 10% reduction in the average greenhouse gas (GHG) emission intensity of the state’s transportation fuels by 2020. This regulation is expected to reduce lifecycle GHG emissions per year by 20–25 million metric tons by 2020. Given available technology options, biofuels are expected to play a major role toward achieving the target. However, the rapid expansion of biofuel production may have environmental and social impacts at local, regional, and international levels. In response, many governments and national consortia have adopted sustainability requirements for their biofuel programs.

The CARB is to propose a strategic plan for addressing overall sustainability provisions for the LCFS, for consideration by the Board for adoption by the end of 2011. This report examines a range of sustainability requirements for biofuels and considers a possible framework for the LCFS sustainability provision. Our goal is to identify the proper mechanisms to further incentivize sustainable production of biofuels and other relevant transportation fuels while minimizing environmental impacts and unintended consequences.

This study reviews sustainability requirements and criteria being implemented or proposed by governments promoting biofuel programs, particularly the United Kingdom’s (UK’s) Renewable Transport Fuel Obligation (RTFO) carbon and sustainability reporting and the European Union’s (EU’s) sustainability criteria under the EU Renewable Energy Directive (EU-RED). We also review the sustainability principles and criteria (Version 0.5) proposed by the Roundtable on Sustainable Biofuels (RSB), an international initiative involving stakeholders across the entire biofuel supply chain, nongovernmental organizations, experts, governments, and inter-governmental agencies.

Based on our review, an LCFS sustainability requirement may be most effective if it adopts the following principles:

• Stakeholders should collaborate to establish a performance-based sustainability framework that sets reasonable expectations, clear measures of compliance, and methods of enforcement; encourages innovation; and rewards practices exceeding a minimum standard.
• The sustainability framework should adopt a lifecycle approach and apply to all fuels, feedstocks, and production and conversion technologies. In the short term, however, the standards may apply only to non-baseline LCFS-participating fuels, to address acute concerns for new fuels, reduce administrative burden, and recognize existing regulations on baseline fuels.
• Careful coordination and integration among diverse international initiatives is required to improve coherence and efficiency of sustainability standards between countries. To build on international consensuses, avoid duplication of efforts, and take into account the special background, constraints, and interests of California’s LCFS, RSB principles and criteria (Version 0.5 or Version 1.0 when it becomes available) could be considered as a starting point and tailored to California’s context.

There has been limited experience in implementing sustainability standards over large geographical and political regions; many technical, policy, and implementation issues remain to be tested. There are remaining policy design challenges to identify appropriate incentives for performance-based requirements for meeting sustainability goals. Equally challenging are the sustainability issues associated with marketmediated effects at the system level, such as food prices, indirect land use change (ILUC), and cumulative environmental impacts. Despite continued improvement in understanding science and reducing modeling uncertainties, stakeholders should be engaged to discuss ways to create a robust policy framework that will reflect evolving scientific understanding and provide a stable compliance environment.

Useful references:

Roadmap for Biomass Development by the California Biomass Collaborative

RSB. 2009. Roundtable on Sustainable Biofuels: Global Principles and Criteria for Sustainable Biofuels Production. Version 0.5.

Kevin Fingerman. "Water impacts of CA biofuel production." (Working paper)