California legislature passes bills extending cap-and-trade, LCFS

On July 17, the California legislature voted in favor of a package of bills that extend the state’s cap-and-trade program for 10 years, through 2030, and codify the Low Carbon Fuel Standard into law.

The package of legislation includes AB 398 and AB 617. The California Assembly passed AB 398 by a vote of 55 to 22 and AB 617 by a vote of 50 to 24. The California Senate passed the same bills with respective votes of 28 to 12 and 27 to 13. California Gov. Jerry Brown is expected to sign the bills.

Brown issued a statement in support of the bills following their passage by the legislature. “Tonight, California stood tall and once again, boldly confronted the existential threat of our time," he said. "Republicans and Democrats set aside their differences, came together and took courageous action. That’s what good government looks like."

The Coalition for Renewable Natural Gas has also spoken out in support of the bills. “The passage of the Cap-and-Trade extension package is a win for the RNG industry and the production of low-carbon biofuels in California,” said Nina Kapoor, manager of legislative and regulatory affairs for the RNG Coalition) “In addition to extending Cap-and-Trade, state law will now also recognize low-carbon transportation alternatives for purposes of allocating future Greenhouse Gas Reduction Funds (GGRF) from related auction revenues—funds that are needed to realize increased in-state development, deployment and utilization of RNG.

In addition to extending the cap-and-trade program and codifying the LCFS into law, the RNG Coalition noted the legislative package also identifies low-and zero-carbon transportation alternatives and short-lived climate pollutants, such as methane, in the list of funding priorities for auction revenues.

According to the coalition, the Low Carbon Transportation Fund has historically provided no money for in-state biofuels production, while the cap-and-trade-related Greenhouse Gas Reduction Fund has focused very little on the reduction of toxic air contaminants and short-lived climate pollutants outside of methane from the dairy sector.

The Renewable Energy Group Inc. has also applauded passage of the bills. “As a leading provider of lower-carbon biomass-based diesel in California and North America, REG is thankful to Golden State legislators for these forward thinking actions that will further improve California’s carbon reduction efforts and help provide cleaner burning fuel for its citizens,” said Randy Howard, interim president and CEO.  “As a long-time Californian, I have seen firsthand how the LCFS and cap-and-trade have improved our air quality and enhanced our energy security. This long term commitment will further both of those worthwhile goals and provide many more environmental and economic benefits.”