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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