Court rules to uphold Calif. LCFS, but requires corrective action

On July 15, California’s Fifth District Court of Appeal issued its opinion in the lawsuit filed by Poet LLC against the California Air Resources Board. The lawsuit, originally filed in November 2011, challenged the state’s low carbon fuel standard (LCFS) program. The court’s decision essentially upholds the LCFS program, but requires CARB to correct certain aspects of the program’s implementation. 

A provisional ruling published by the court in June directed CARB to take several actions to correct issues with the program’s implementation, but ruled that the LCFS regulations in effect for 2013 would remain in effect until these corrective actioners were completed.

In response to the court’s July 15 opinion, Poet released a statement that said the company pleased that the court recognized the fundamental flaws in CARB’s progress for implementing the LCFS. “The court ruled in our favor on every challenge we raised on appeal, each of which went to a different problem with the approval process,” Poet said in the statement. “The court has also made clear that [CARB] must re-evaluate the LCFS’s recognized potential to increase smog-forming pollutants, recirculate its environmental document evaluating the impacts of the LCFS and, significantly, allow public comment on several controversial issues, including the carbon intensity values attributed to land use changes.”

“The court prohibited ARB from stepping up enforcement of the LCFS beyond the 2013 levels until it complies with its legal obligations, although the Court did not prohibit enforcement of the LCFS regulation outright. As a result, we are reviewing our options with respect to the court’s decision,” continued Poet in its written statement.

The opinion published by the court specifies the actions CARB needs to take to comply with the ruling. First, it must set aside its approval of several LCFS regulations, including Board Resolution 09-31, which directs to executive officer of CARB to convene an expert workgroup to assist in refining and improving land use and indirect effect analysis of transportation fuels; Executive Order R-09-014; Executive Order R-10-003; and CARB’s decision to defer the formulation of mitigation measures relating to biodiesel nitrogen oxide (NOx) emissions.

Second, CARB is directed to select a decision maker and take action necessary to assure that decision maker has full authority to approve or disapprove the proposed LCFS regulations and to complete the environmental review. CARB must also take action necessary to assure the decision maker does not approve the proposed LCFS regulations under after the decision maker has completed the environmental review.

Third, CARB must address whether the project will have significant adverse effect on the environment as a result of increased NOx emissions, and make findings supported by evidence regarding potential adverse effects of increased NOx emissions. In the event the environmental effects are found to be significant, mitigation measures must be adopted.

Forth, CARB must accept public comments for a 45 day period on all issues related to the approval of the proposed LCFS regulations, including those associated with carbon intensity values attributed to land use changes, the application of the GTAP model and any new material in any supplemental staff report prepared in connected with the proposed LCFS regulations. CARB must also respond to those comments before approving the proposed regulations.

Fifth, a group of four emails from consultants regarding the computer model used to calculate indirect carbon emission from ethanol due to land use change must be included in the rulemaking file. Those emails were originally left out of the file.

Finally, CARB is directed to maintain the status quo by continuing to adhere to the LCFS regulations in effect for 2013 until the corrective actions are completed. However, in the event CARB fails to proceed in good faith with diligence, the opinion states the superior court will suspend operation and enforcement of the LCFS.

A full copy of the court’s opinion can be downloaded here.