Considering A Regional Clean Fuel Standard
Transportation is the primary source of air and climate pollution in the Puget Sound region – over 13 million metric tons of greenhouse gases a year.
The Puget Sound Clean Air Agency has set a target of reducing greenhouse gas (GHG) pollution by 50 percent below 1990 levels by 2030, and is considering adopting a regional Clean Fuel Standard to help meet that target. A Clean Fuel Standard will reduce greenhouse gas pollution from transportation fuels using a flexible market-based approach that supports innovation. The standard would apply to the Puget Sound Clean Air Agency's jurisdiction -- King, Kitsap, Pierce, and Snohomish counties.
The Agency is currently drafting a formal rule for the Agency's Board of Directors to consider for action in early 2020.
- September 26, 2019: The Agency's Board of Directors will review an analysis of a Clean Fuel Standard's potential impacts. All board meetings are open to the public.
- October 2019: The Agency will release a draft Clean Fuel Standard during the week of October 7, followed by a public comment period.
- December 19, 2019: Public hearing and Board of Directors meeting on the draft rule at the Washington State Convention Center.
- Early 2020: Feedback from the public comment period will be considered for a final rule. The Agency's Board of Directors will then consider action on the final rule.
A Clean Fuel Standard Can Significantly Reduce Pollution
The Agency contracted with ICF to assess the availability of clean transportation fuels and to conduct an analysis of the air quality, health, and economic impacts of a regional Clean Fuel Standard.
The key findings from the analysis include:
- A Clean Fuel Standard can significantly reduce the Puget Sound region’s GHG pollution – up to a 26% reduction in carbon intensity of transportation fuels by 2030.
- A Clean Fuel Standard will improve air quality and public health, especially in communities near major roadways.
- A Clean Fuel Standard is consistent with the region’s economic growth. Any changes to economic productivity and employment are estimated to be very small (plus or minus one tenth of one percent).
What is a Clean Fuel Standard?
A Clean Fuel Standard makes our transportation system cleaner by requiring a gradual transition from conventional fuels (such as gasoline and diesel) to cleaner transportation fuels (such as electricity and biofuels).
The standard sets an annual target carbon intensity reduction. Fuels over the target generate deficits, while fuels below the target generate credits. Credits are then traded on the open market. The standard gives fuel producers flexibility – the market decides which fuels best achieve results.
Why do we need a regional Clean Fuel Standard?
- Climate Change. Cars and trucks that burn fossil fuels (gasoline and diesel) are the primary source of climate change-causing pollution in the Puget Sound region -- more than 40 percent. A Clean Fuel Standard offers the greatest potential to reduce this pollution.
- Public Health. A Clean Fuel Standard will reduce health impacts, particularly heart and lung disease and cancer, by requiring the use of cleaner fuels that create far less pollution.
- Synergy. California, Oregon, and British Columbia have all adopted Clean Fuel Standards and reduced GHG pollution from transportation. Washington does not have a Clean Fuel Standard. Adopting a Clean Fuel Standard in our region will strengthen efforts to build a West Coast market for clean fuels.
If you or your organization would like to receive an in-person presentation about a Clean Fuel Standard, how it works, and potential results for the Puget Sound region, please let us know by the week of October 7 (before the public comment period).
Upcoming Public Hearing
December 19, 2019 | Exact times to be determined
Washington State Convention Center
705 Pike St, Seattle, WA 98101
Questions or Feedback?
Contact Linda Lyshall at CleanFuels@pscleanair.org or 206-689-4028.
Sign up here to receive email updates from the Agency on a potential Clean Fuel Standard.
Previous Public Involvement
Tuesday, November 13, 2018 | 10 - 11 a.m.
View the webinar recording here.
Public Information Session
Thursday, November 15, 2018 | 5:30 - 8 p.m.
Mayflower Park Hotel, Plymouth Room
405 Olive Way, Seattle, WA 98101
How does a Clean Fuel Standard work?
The standard would work by following certain steps:
- Sets a Pollution Reduction Target. The standard establishes an annual GHG reduction target for the region's entire transportation fuel pool. The GHG reduction target increases over time (for example, 10 percent carbon intensity reduction over 10 years).
- Requires High-Carbon Fuels to Reduce GHG Pollution. Each type of transportation fuel is assigned a carbon intensity score. Life-cycle carbon intensity is the total amount of GHGs created per unit of energy during a fuel's production, transport, and vehicle use.
The standard would require any company that produces or imports high-carbon fuel in the region to demonstrate a gradual reduction in the carbon intensity of their fuel and/or offset their GHG emissions.
If a fuel has a carbon intensity score higher than the standard's target, the fuel producer must:
- Reduce GHG emissions by blending their fuel with cleaner fuel or improving processes; or
- Purchase credits from a producer of cleaner transportation fuel with a low-carbon intensity score.
- Incentivizes Cleaner, Lower-Carbon Fuels. Credits are generated by low-carbon fuel producers for fuels that are cleaner than the region's carbon intensity target. Producers of fuels with low-carbon intensity scores can sell credits to higher-carbon fuel producers. This additional revenue can help reduce the cost of their lower carbon fuel, enhance technology, or build new facilities, such as electric vehicle charging infrastructure.
What fuels will replace gasoline and diesel?
- Electricity. Electricity has a lower-carbon intensity in our region than the rest of the country because of our abundance of power from renewable sources. Market forecasts predict that the transition to electricity as a primary transportation fuel is inevitable.
- Biofuels. The vast majority of cars on the road today rely on liquid fuel. There is a need to provide lower-carbon liquid biofuels to displace higher-carbon fossil fuels. Consequently, biofuels will play a major role in decreasing GHG emissions from transportation.
How is a Clean Fuel Standard Implemented?
- Registration and Reporting.
- Importers and producers of transportation fuels such as gasoline, diesel, ethanol, and biodiesel would be required to register with the Agency and report annual sales of transportation fuel imported or produced in the region.
- Entities who can claim credits, such as electric utilities, transit providers, businesses that own electric vehicle charging stations, and producers of low-carbon biofuels, are considered “opt-in entities” and must also register with the Agency if they want to sell credits.
- Credit Market. Credits are bought, sold, and documented through a Credit Bank and Transfer System. Regulated and opt-in parties typically work through brokers to buy and sell credits. The price of credits is determined by the market. Existing markets also contain cost-control mechanisms that increase certainty and predictability regarding the maximum cost of compliance.
- Auditing. The Agency audits and tracks the credits bought and sold annually.
Joining the rest of the West Coast
California, Oregon, and British Columbia have established Clean Fuel Standards to reduce transportation emissions and are already seeing success.
- California began their Low Carbon Fuel Standard in 2011. Since then, California has replaced over three billion gallons of diesel fuel with cleaner fuels.
- Oregon has avoided 1.7 million metric tons of greenhouse gas emissions from the transportation sector since 2016.
- British Columbia has avoided over eight million metric tons of greenhouse gas emissions since 2010.
Aligning with the rest of the West Coast will strengthen low-carbon fuel markets and boost the future success of clean transportation policies.
Changes and economic impacts to expect
A Clean Fuel Standard will likely create changes to our region’s economy. Economic impacts could include:
- Increased market value of low-carbon fuels.
- Increased production of clean fuels, which could increase agriculture.
- Increased efforts to capture landfill, wastewater, and agricultural/manure gas.
- A small increase in petroleum gasoline and diesel prices.
- Petroleum fuel prices do not currently reflect the full costs of the air pollution, climate change, and health effects they cause.
- Other states have used mechanisms to control fuel price impacts.