Cal. Code Regs. tit. 17 § 95488.9

Current through Register 2024 Notice Reg. No. 36, September 6, 2024

Section 95488.9 - Special Circumstances for Fuel Pathway Applications

(a)Substantiality Requirements.

(1) The substantiality requirement applies in the two scenarios listed below. The substantiality requirement does not apply when re-applying for a Provisional pathway with a new operational data period due to a process change as described in 95488.9(c), or when replacing a certified CI after verification using the process described in 95488.10(a)(6).

(A)Multiple applications for the same feedstock-fuel combination. When a fuel pathway applicant applies for two or more pathways based on different inputs for the same feedstock-fuel combination processed within an operational data period at a single fuel production facility, the Executive Officer will consider separate pathways only when the CI of one or more of the proposed pathways meet the substantiality requirement relative to the CI of the reference pathway. The "reference" pathway is the composite CI that results when the fuel is modeled using a single pathway that represents the average production of all quantities of the feedstock-fuel combination produced in the operational data period.

(B)Tier 1 Pathways using Innovative Methods. The Executive Officer will consider a Tier 2 application for a pathway that would otherwise be classified as Tier 1 if the Simplified CI Calculator for that fuel type cannot be used to accurately model the pathway due to process innovations and the proposed pathway meets the substantiality requirement relative to the CI of the reference pathway. The "reference" pathway is the CI of the proposed pathway as calculated by the applicable Simplified CI Calculator. The substantiality requirement does not apply to pathways that qualify for Tier 2 due to the use of low-CI process energy sources, or use of carbon capture, as described in 95488.1(d)(7).

(2) The applicant seeking to apply under one of the scenarios described in subsection (1), above, must demonstrate, to the Executive Officer's satisfaction, that the proposed pathway meets the following requirements:

(A) The source-to-tank carbon intensity of the fuel under the proposed pathway meets one of the following two criteria. "Source-to-tank" means all the steps involved in feedstock production and transport, finished fuel production and transport. A source-to-tank CI does not include the carbon intensity associated with the use of the fuel in a vehicle and does not include the LUC modifier.

1. For proposed pathway applications with source-to-tank carbon intensities greater than 20 gCO₂e/MJ (absolute value), that source-to-tank carbon intensity must be at least 5 percent lower than the source-to-tank carbon intensity of the reference pathway; or

2. For proposed pathway applications with source-to-tank carbon intensities of 20 gCO₂e/MJ (absolute value) or less, that source-to-tank carbon intensity must be at least 1 gCO₂e/MJ less than the source-to-tank carbon intensity of the reference pathway.

(b)Temporary Fuel Pathways.

(1) Fuel reporting entities may petition the Executive Officer to use a Temporary fuel pathway carbon intensity value for reporting quantities of fuel to generate credits or deficits.

(2) A Temporary pathway petition approved by the Executive Officer will allow the fuel reporting entity to use the pathway for LRT-CBTS reporting purposes for up to two quarters at a time. Reporting will be granted only for the quarter during which the Temporary pathway is approved for use and the subsequent full quarter. The Executive Officer may approve multiple subsequent petitions from the same fuel reporting entity, of up to two quarters each, but each approval will require a new petition.

(3) A petition to use a Temporary pathway must be submitted online in the AFP.

(4)New Temporary Fuel Pathways. An entity can apply for the use of a Temporary fuel pathway CI value if it appears in Table 8 in this subarticle or if the Executive Officer approves a new Temporary pathway (for a fuel or feedstock-fuel combination not found in Table 8) and publishes it on the LCFS web site. Any new Temporary pathway proposed by the Executive Officer will be posted for 45 days for public comment prior to certification. The posted information will include the rationale for assigning the CI to that particular Temporary pathway. If these comments require significant revision of the originally published pathway, a revised pathway will be posted for public comment. Upon certification of a new Temporary pathway created by the Executive Officer, the pathway will be available for reporting for the quarter in which it is certified.

Table 8. Temporary Pathways for Fuels with Indeterminate CIs

Fuel	Feedstock	Process Energy	C (gCO2e/MJ)
Ethanol	Corn	Grid electricity, natural gas, and/or renewables	90
	Grain Sorghum	Grid electricity, natural gas, and/or renewables	95
	Any Sugar Feedstock	Bagasse and straw only; no grid electricity	55
	Any Cellulosic Biomass	Grid electricity, natural gas, and/or renewables	50
Biomass-based Diesel	Fats/Oils/Grease Residues	Grid electricity, natural gas, and/or renewables	45
	Any feedstock derived from plant oils, excluding palm oil	Grid electricity, natural gas, and/or renewables	65
	Any other feedstock	Grid electricity, natural gas, and/or renewables	Baseline (2010) CI value for ULSD
Fossil LNG	Petroleum Natural Gas	N/A	95
Fossil L-CNG	Petroleum Natural Gas	N/A	100
Biomethane CNG	Landfill gas	Grid electricity, natural gas, and/or parasitic load	70
Biomethane LNG	Landfill gas	Grid electricity, natural gas, and/or parasitic load	85
Biomethane L-CNG	Landfill gas	Grid electricity, natural gas, and/or parasitic load	90
Biomethane CNG	Municipal Wastewater sludge, Food Scraps, Urban Landscaping Waste, or Other Organic Waste	Grid electricity, natural gas, and/or parasitic load	45
Biomethane LNG	Municipal Wastewater sludge, Food Scraps, Urban Landscaping Waste, or Other Organic Waste	Grid electricity, natural gas, and/or parasitic load	60
Biomethane L-CNG	Municipal Wastewater sludge, Food Scraps, Urban Landscaping Waste, or Other Organic Waste	Grid electricity, natural gas, and/or parasitic load	65
Biomethane CNG, LNG or L-CNG	Dairy Manure	Grid electricity, natural gas, and/or parasitic load	- 150
Hydrogen	Centralized SMR of fossil LNG	Grid electricity, natural gas and/or renewables	185
Any gasoline substitute feedstock-fuel combination not identified above	Any	Any	Baseline (2010) CI value for CaRFG
Any diesel substitute feedstock-fuel combination not identified above	Any	Any	Baseline (2010) CI value for ULSD

(c)Provisional Pathways. As set forth in sections 95488.6(a) and 95488.7(a), LCFS fuel pathways are generally developed based on 24 months of operational data. The Executive Officer may consider Provisional pathway applications from 1) facilities that have been in operation for less than 24 months, or 2) existing facilities that can demonstrate a process change has been implemented, based on at least three months of operational data. Based on timely reports, the fuel reporting entity may generate credits or deficits using a provisionally-certified CI.

(1)Application process. Application requirements are the same as those for the applicable pathway classification, specified in sections 95488.6 and 95488.7 including validation of the data submitted in support of the provisional pathway application.

(2)Verification schedule. The certified pathway is subject to periodic verification as described in section 95500(b)(2) as applicable for the fuel pathway classification.

(3)Adjusting CI and Credit Balance. At any time during the 24 months following provisional certification, the Executive Officer may revise as appropriate the provisionally-certified CI. Until the Executive Officer has removed the provisional status pursuant to subsection (4) below, the Executive Officer may adjust the number of credits or reverse any credit in the fuel reporting entity's account using the provisional pathway without a hearing, notwithstanding the requirements of section 95495. At the end of the provisional period, the certified CI will be determined on the basis of 24 months of operational data.

(A) If the verified operational CI is higher than the provisionally-certified CI, the Executive Officer will replace the certified CI with the verified operational CI in the LRT-CBTS and will make any necessary credit adjustment in the fuel reporting entity's account using the provisional fuel pathway for reporting. Any credits generated using a provisionally-certified CI, across the entire period from original validation to completion of the periodic verification, are subject to adjustment.

(B) If the verified operational CI is lower than the provisionally-certified CI, the Executive Officer will certify the pathway with the lower CI, adding a conservative margin of safety per section 95488.4(a) if the applicant so desires. The fuel reporting entity will not be eligible for any retroactive credit generation for any quarter for which the reporting deadline has passed, but the revised CI will be valid for future reporting periods.

(4)Removal of provisional status. Positive or qualified positive verification statements covering at least 24 months of operational data will result in the removal of the provisional status for the certified pathway.

(d)Substitute Pathways for Reporting Exports and Other Transaction Types. If a fuel reporting entity is unable to determine the pathway for reporting a fuel transaction type listed in subsection (1) below, a Substitute pathway corresponding to the fuel type must be used for reporting. Substitute pathways have CI values based on weighted average CIs of that fuel in the prior year, and are provided on the LCFS web site.

(1) The Substitute pathways are only available in the LRT-CBTS for reporting the following transaction types:

(A) Sold without obligation

(B) Purchased without obligation

(C) Export

(D) Loss of inventory

(E) Not used for transportation

(2) When using a Substitute pathway, the fuel reporting entity must use default Company ID and Facility ID values for reporting in the LRT-CBTS. These default values are provided on the LCFS web site.

(e)Design-based Pathways. As set forth in sections 95488.6(a) and 95488.7(a), LCFS fuel pathways are generally developed based on 24 months of operational data. However, in order to encourage the development of innovative fuel technologies, an applicant may submit a Design-based pathway application in the AFP for a fully engineered and designed facility with no operational data.

(1) Applications for Design-based pathways must include a detailed life cycle analysis of the anticipated pathway performed using the CA-GREET3.0 model, and an LCA report as described in 95488.7(a)(2) detailing facility plans and specifications expected during commercial operation.

(2) The Executive Officer may, fully at his or her discretion, choose to conduct a detailed evaluation of the submitted information and evaluate whether the applicant provided a sufficient level of detail to warrant confidence in energy consumption and other key CI performance metrics. If the Executive Officer chooses to undertake such a review, and the Executive Officer agrees that the pathway warrants publication on the LCFS web site, a Design-based pathway summary will be posted for public comment as detailed in section 95488.7(d)(5) for Tier 2 pathways. Executive Officer approval of Design-based pathways will generally be contingent upon meeting the requirements detailed in section 95488.7, exclusive of the requirement to obtain a validation statement.

(3)Ineligibility for credit generation. Design-based pathways are not eligible to report fuel volumes to the LRT-CBTS or generate credits. After a pathway has been in production for at least three months, in order to be eligible to report and generate credits, the applicant must complete a Provisional pathway application per section 95488.9(c).

(f)Carbon Intensities that Reflect Avoided Methane Emissions from Dairy and Swine Manure or Organic Waste Diverted from Landfill Disposal.

(1) A fuel pathway that utilizes biomethane from dairy cattle or swine manure digestion may be certified with a CI that reflects the reduction of greenhouse gas emissions achieved by the voluntary capture of methane, provided that:

(A) A biogas control system, or digester, is used to capture biomethane from manure management on dairy cattle and swine farms that would otherwise be vented to the atmosphere as a result of livestock operations from those farms.

(B) The baseline quantity of avoided methane reflected in the CI calculation is additional to any legal requirement for the capture and destruction of biomethane.

(2) A fuel pathway that utilizes an organic material may be certified with a CI that reflects the reduction of greenhouse gas emissions achieved by the voluntary diversion from decomposition in a landfill and the associated fugitive methane emissions, provided that:

(A) The organic material that is used as a feedstock would otherwise have been disposed of by landfilling, and the diversion is additional to any legal requirement for the diversion of organics from landfill disposal.

(B) Any degradable carbon that is not converted to fuel is subsequently treated in an aerobic system or otherwise is prevented from release as fugitive methane. Upon request, the applicant must demonstrate that emissions are not significant beyond the system boundary of the fuel pathway.

(C) The baseline quantity of avoided methane reflected in the CI calculation is additional to any legal requirement for the avoidance or capture and destruction of biomethane.

(3) Carbon intensities that reflect avoided methane emissions from dairy and swine manure or organic waste projects are subject to the following requirements for credit generation:

(A)Crediting Periods. Avoided methane crediting for dairy and swine manure pathways as described in (f)(1) above, and for landfill-diversion pathways as described in (f)(2) above, is limited to three consecutive 10 years crediting periods, counting from the quarter following Executive Officer approval of the application. The pathway holder must formally request each subsequent crediting period for the project through the LRT-CBTS.

(B) Notwithstanding (A) above, in the event that any law, regulation, or legally binding mandate requiring either greenhouse gas emission reductions from manure methane emissions from livestock and dairy projects or diversion of organic material from landfill disposal, comes into effect in California during a project's crediting period, then the project is only eligible to continue to receive LCFS credits for those greenhouse gas emission reductions for the remainder of the project's current crediting period. The project may not request any subsequent crediting periods.

(C) Notwithstanding (A) above, projects that have generated CARB Compliance Offset Credits under the market-based compliance mechanism set forth in title 17, California Code of Regulations Chapter 1, Subchapter 10, article 5 (commencing with section 95800) may apply to receive credits under the LCFS. However, the LCFS crediting period for such projects is aligned with the crediting period for Compliance Offset Credits, and does not reset when the project is certified under the LCFS.

Cal. Code Regs. Tit. 17, § 95488.9

1. New section filed 1-4-2019; operative 1-4-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 1).

Note: Authority cited: Sections 38510, 38530, 38560, 38560.5, 38571, 38580, 39600, 39601, 41510, 41511 and 43018, Health and Safety Code; 42 U.S.C. section 7545; and Western Oil and Gas Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249 (1975). Reference: Sections 38501, 38510, 39515, 39516, 38571, 38580, 39000, 39001, 39002, 39003, 39515, 39516, 41510, 41511 and 43000, Health and Safety Code; Section 25000.5, Public Resources Code; and Western Oil and Gas Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249 (1975).

1. New section filed 1-4-2019; operative 1/4/2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 1).