Low Carbon Fuel Programs Cost Less and Perform Better Than Expected

With many states now considering an LCF program to help meet their transportation decarbonization goals, it's more important than ever that costs are considered appropriately. Let's take a step back and realize that every policy has its pros and cons; you simply cannot focus on the costs while ignoring the benefits.

In the case of an LCF program, it is true that there will be an added cost if you do nothing and continue using fossil fuels.

In every other case, the costs will go down and the benefits will increase. These benefits include lower tailpipe emissions and improved public health, rural economic support, and increased energy security. Studies that only highlight the costs often forget to acknowledge the other side of the ledger.

To refute the claim that LCF programs significantly increase the price at the pump, Clean Fuels has partnered with Stillwater Associates to compare related predictions with real-life data to show that low carbon fuel programs in California, Oregon and Washington have consistently cost less than projected while outperforming carbon-intensity reduction targets. View the entire analysis here.

The main takeaways are:

• Actual costs were consistently below forecasted costs
• Technology developments that occurred over time generated more credits than originally anticipated and thus lowered the cost of compliance
• Increases in the overall supply of clean fuels and their reduced carbon intensity have created a more resilient market and lowered overall costs
• LCF is not an "adopt it and forget it" program and agencies are constantly watching markets and adjusting these regulations to match market conditions
• Complementary policies such as cap and invest programs, as well as other biofuel incentives, have tempered the cost of a LCF program, making them a cheaper option

Ultimately, the record shows that LCF programs are not the costly burden critics claim-they are a smart, market-based policy that deliver more value than predicted. Reducing carbon is not free and experience in these West Coast states demonstrates that LCF programs consistently drive down carbon thanks to innovation, expanding clean fuel supplies and responsive program design. For states exploring new pathways to decarbonize transportation, the takeaway is clear: low carbon fuel programs work.