Summary
Standards for petroleum, renewable, and alternative fuels in California have set the precedent for the nation's first restrictions on carbon fuel content.
Analysis
The California Air Resources Board [CARB] has yet again pushed the envelope in air quality regulation by approving limits on carbon content of fuel sold in the Golden State. Under the new rules carbon content of fuel sold in CA must be reduced by 10% by 2020. The most significant issue however is that the rules include a 'well to wheel' standard covering all carbon emitted in production and transport of fuels. This has a major downside for ethanol as significant amounts of petroleum fuel is consumed in planting and harvesting corn feedstocks as well as processing into ethanol and transporting the fuel through the distribution chain. Hydrogen fuels may be the biggest winners as they are carbon free, electric vehicles will also benefit. Expect to see similar efforts at the national level as the Green movement grows increasingly bolder with favorable majorities in Washington to push their agenda.
