California's Low-Carbon Fuel Rule: A Boon for Alternative Fuels?

ethanol cornCalifornia passed the country's first low-carbon fuel standard law yesterday, with a goal of cutting carbon emissions 10% by 2020. The allowable carbon intensity of fuels will lower incrementally beginning in 2011. As a result, everyone from fuel providers and refiners to importers and blenders will have to work on getting their environmental act together. It's a move that could lead to a national low-carbon fuel standard--and one that has, surprisingly, upset many ethanol makers.

You might think that biofuel makers would rejoice at California's decision. After all, biofuels are all low-carbon emitters, right? Most of them are, but corn ethanol is ranked as a bigger CO2 emitter than petroleum under the law. California's standard has pro-corn ethanol advocates like General Wesley Clark up in arms. According to Clark, the new ruling "stifles development of the emerging cellulosic industry". But with myriad non-corn based ethanol option available--grass and wood come to mind--it doesn't make sense to promote corn ethanol, which takes the space of valuable food crops. Corn ethanol may already be established as a major player in the biofuel industry, but California's law will hasten the switch to non-food crop based fuels.

Regardless of the impact on corn ethanol provider, California's ruling will create over 3,000 new jobs. Non-corn ethanol makers will be put to task, as 1.5 billion gallons of ethanol will be necessary to reach carbon emission goals. And of course, electric cars that require little-to-no fuel at all will become increasingly important.

[Via San Jose Mercury News]

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