In 2011, the California Air Resources Board (CARB) established California’s Low Carbon Fuel Standard (LCFS) program. The program is one of several measures that seeks to reduce greenhouse gas (GHG) emissions in California. The goal by 2030 is a reduction of 20% from a 2010 baseline. The program establishes a declining annual target, or compliance standard. LCFS focuses on reducing the carbon intensity (CI) of the fuel used in California and to offer an increasing selection of low-carbon renewable alternatives. These low-carbon and renewable alternatives generate credits based on emissions reduced relative to the established baseline. According to CARB, one LCFS credit is equal to 1 metric ton CO2-equivalent (MT CO2e).

Data published by CARB in April 2023 indicates that through 2017 ethanol was the largest credit generator for the LCFS programs; however, during the last five years, renewable diesel credits surpassed those of ethanol. In 2022, ethanol was the fourth largest generator of credits after renewable diesel, electricity and biomethane. Biodiesel was in fifth place in terms of credit generation (see Figure 1). In 2022, renewable diesel generated 9.699 million credits, whereas electricity and biomethane generated 6.451 million credits and 4.340 million credits, respectively....