California air regulators approve changes to climate program that could raise gas prices

SACRAMENTO, Calif. — California air regulators voted to approve changes to a key climate program aimed at reducing planet-warming emissions that has a wide swath of critics and could increase gas prices statewide.

The California Air Resources Board voted to make significant updates to the low carbon fuel standard, or LCFS, which requires the state to reduce the environmental impact of gas and other transportation fuels by incentivizing producers to cut emissions.

The plan approved late Friday at the end of a 12-hour meeting will increase the state’s emission reduction targets and fund charging infrastructure for zero-emission vehicles. It also will phase out incentives for capturing methane emissions from dairy farms to turn into fuel.

Environmental groups have criticized the program for stimulating the production of biofuels, which are derived from sources including plants and animal waste, when they say the state should focus more on supporting power for electric vehicles. They argue the proposal fails to adequately address those concerns.

The oil industry, state lawmakers and others have said the agency hasn’t been transparent about how the proposed updates could increase gas prices.

Agency staff released a cost-benefit analysis last year estimating the initial proposal could have led to an increase in gas prices by 47 cents per gallon by 2025. But the staff has not repeated the analysis since later updating the proposal and the agency contends it cannot accurately predict gas prices.

“If you’re going to ask drivers to pay a lot, which is what this program proposal is going to do, I think you need to be able to make the case that it’s worth paying for,” said Danny Cullenward, a climate economist with the University of Pennsylvania’s Kleinman Center for Energy Policy. “What concerns me most about this is I think a lot of the things that are being credited do not actually help the climate.”

Gas prices could increase by as high as 85 cents per gallon by 2030 and $1.50 per gallon by 2035 under the proposal, according to an estimate from Cullenward. Cullenward said his figures and the estimates initially released by board staff are not an apples-to-apples comparison, in part because his projection uses 2023 dollars and the board staff used 2021 dollars.

State Assemblymember Tom Lackey, a Republican representing Palmdale in Southern California, said at the meeting that his constituents cannot afford an increase in gas prices.

“On behalf of the people of the 34th Assembly district, I ask you to not approve this rulemaking and find other alternatives that won't cost us quite that much,” he said.

The California Air Resources Board says the program will ultimately lower the cost of sustainable transportation fuels.

The agency first approved the low carbon fuel standard in 2009, the first of its kind in the nation. It is part of California's overall plan to achieve so-called carbon neutrality by 2045, meaning the state will remove as many carbon emissions from the atmosphere as it emits. The state has passed policies in recent years to phase out the sale of new fossil-fuel powered cars, trucks, trains and lawn mowers.

“The low carbon fuel standard has already successfully created lower-cost, lower-carbon alternatives, and the benefits of the proposal vastly outweigh those costs,” Steven Cliff, the agency’s executive officer, said last month.

Suncheth Bhat, chief commercial officer for EV Realty, an electric vehicle infrastructure company, called the program “one of the most powerful, transformational policies” to speed up the transition to electric vehicles.

The vote comes a day after Democratic Gov. Gavin Newsom called the state Legislature into a special session to protect some of California’s environmental and other liberal policies ahead of former President Donald Trump’s second term in office.

“CARB’s justification for this version of the LCFS as a bridge for combustion fuels while we transition to zero-emissions needs to be reconsidered in light of the profoundly altered landscape we suddenly landed in this week,” Adrian Martinez, deputy managing attorney at environmental nonprofit Earthjustice, said of Trump's election win.

The Trump administration in 2019 revoked California’s ability to enforce its own tailpipe emissions standards. President Joe Biden later restored the state’s authority, which was upheld in federal court.

Future challenges from the Trump administration could lead to long court battles, said David Pettit, a senior attorney with the Center for Biological Diversity’s Climate Law Institute.

“In the meantime, I think we still need something ... to enhance the development of electric vehicles and the electric vehicle infrastructure,” Pettit said. “The LCFS is a way that we might be able to do that.”