Cal. Code Regs. tit. 17 § 95489

Current through Register 2024 Notice Reg. No. 16, April 19, 2024

Section 95489 - Provisions for Petroleum-Based Fuels

(a)Deficit Calculation for CARBOB or Diesel Fuel. A fuel reporting entity for CARBOB or diesel fuel must calculate separately the base deficit and incremental deficit for each fuel or blendstock derived from petroleum feedstock as specified in this provision.

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(b)Addition of Incremental Deficits that Result from Increases in the Carbon Intensity of Crude Oil to a Fuel Reporting Entity's Compliance Obligation.

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(3)Process for Calculating the Annual Crude Average Carbon Intensity Value.

(A) An Annual Crude Average carbon intensity value will be calculated for each calendar year using a volume-weighted average of crude carbon intensity values. The volume for each imported crude will be the total volume of that crude reported by all fuel reporting entities in the Annual Compliance Reports for the calendar year. Volume contributions for California State fields will be based on oil production data from the California Department of Conservation and volume contributions for California Federal Offshore fields will be based on oil production data from the Bureau of Safety and Environmental Enforcement. Field production volumes for California-produced crude will be reduced, if necessary, to account for crude exports. Crude carbon intensity values are those listed in Table 9. For crude names not listed, the default carbon intensity value from Table 9 will be used until the crude name and carbon intensity value is added to Table 9 as described in section 95489(b)(3).

(B) Within 15 days of receiving the Annual Compliance reports, the Executive Officer shall post the Annual Crude Average carbon intensity calculation at the LCFS web site for public comment. Written comments shall be accepted for 15 days following the date on which the analysis was posted. Only comments related to potential factual or methodological errors in the posted Annual Crude Average carbon intensity value may be considered. The Executive Officer shall evaluate the comments received and, if the Executive Officer deems it necessary, may request in writing additional information or clarification from the commenters. Commenters shall be provided 10 days to respond to these requests. The Executive Officer shall post the final Annual Crude Average carbon intensity value at the LCFS web site within 15 days of receiving positive or qualified positive MCON verification reports per section 95500. An adverse verification statement would result in Executive Officer investigation and may result in delay of finalizing and posting the Annual Crude Average carbon intensity value.

(C) Revisions to the OPGEE model, addition of crudes to Table 9, and updates to all carbon intensity values listed in Table 9 will be considered on a three-year cycle through proposed amendments of the Low Carbon Fuel Standard regulation.

Table 9. Carbon Intensity Lookup Table for Crude Oil Production and Transport.

*Country of Origin*	*Crude Identifier*	*Carbon Intensity (gCO₂e/MJ)*
Baseline Crude	California Baseline Crude Average	11.78
Average^*	applicable to crudes supplied during 2018 and subsequent years
	California Baseline Crude Average applicable to crudes supplied in 2016 and 2017	11.98
Annual Crude Average	Volume-weighted California average CI for crudes supplied during 2016	12.14
Annual Crude Average	Volume-weighted California average CI for crudes supplied during 2017	11.93
Algeria	Saharan	14.77
Angola	Cabinda	8.99
	Clov	7.31
	Dalia	8.90
	Gimboa	8.86
	Girassol	9.95
	Greater Plutonio	8.72
	Hungo	8.23
	Kissanje	8.66
	Mondo	8.98
	Nemba	9.08
	Pazflor	8.02
	Sangos	7.06
Argentina	Canadon Seco	10.16
	Escalante	10.15
	Hydra	7.77
	Medanito	10.78
Australia	Enfield	6.84
	Pyrenees	8.24
	Stybarrow	7.84
	Van Gogh	8.46
	Vincent	6.83
Azerbaijan	Azeri	6.40
Belize	Belize Light	9.70
Brazil	Albacora Leste	5.99
	Bijupira-Salema	7.18
	Frade	5.63
	Iracema	5.54
	Jubarte	6.28
	Lula	6.24
	Marlim	6.76
	Marlim Sul	7.78
	Ostra	5.65
	Papa Terra	4.29
	Peregrino	4.16
	Polvo	4.31
	Roncador	6.77
	Roncador Heavy	6.45
	Sapinhoa	6.00
	Tubarao Azul	5.45
	Tubarao Martelo	5.37
Cameroon	Lokele	19.27
Canada	Access Western Blend	15.15
	Albian Heavy Synthetic (all grades)	23.68
	BC Light	8.11
	Bonnie Glen	8.11
	Borealis Heavy Blend	15.41
	Boundary Lake	8.11
	Bow River	9.42
	Cardium	8.11
	Christina Dilbit Blend	12.71
	Christina Synbit	18.66
	Cold Lake	17.87
	Conventional Heavy	9.42
	CNRL Light Sweet Synthetic	25.27
	Federated	8.11
	Fosterton	9.42
	Gibson Light Sweet	8.11
	Halkirk	8.11
	Hardisty Light	8.11
	Hardisty Synthetic	36.39
	Husky Synthetic	32.66
	Joarcam	8.11
	Kearl Lake	12.89
	Kerrobert Sweet	8.11
	Koch Alberta	8.11
	Light Sour Blend	8.11
	Light Sweet	8.11
	Lloyd Blend	9.42
	Lloyd Kerrobert	9.42
	Lloydminster	9.42
	Long Lake Heavy	30.54
	Long Lake Light Synthetic	40.12
	Mackay Heavy Blend	20.43
	Medium Gibson Sour	8.11
	Medium Sour Blend	8.11
	Midale	8.11
	Mixed Sour Blend	8.11
	Mixed Sweet	8.11
	Moose Jaw Tops	8.11
	Peace	8.11
	Peace Pipe Sour	8.11
	Peace River Heavy	19.21
	Peace River Sour	8.11
	Pembina	8.11
	Pembina Light Sour	8.11
	Premium Albian Synthetic	29.49
	Premium Conventional Heavy	9.42
	Premium Synthetic	27.38
	Rainbow	8.11
	Rangeland Sweet	8.11
	Redwater	8.11
	Seal Heavy	9.42
	Shell Synthetic (all grades)	29.49
	Smiley-Coleville	9.42
	Sour High Edmonton	8.11
	Sour Light Edmonton	8.11
	Statoil Cheecham Dilbit	16.41
	Statoil Cheecham Synbit	21.08
	Suncor Synthetic (all grades)	27.09
	Surmont Heavy Blend	22.48
	Synbit Blend	22.64
	Syncrude Synthetic (all grades)	31.62
	Synthetic Sweet Blend	29.36
	Tundra Sweet	8.11
	Wabasca	6.88
	Western Canadian Blend	9.42
	Western Canadian Select	19.04
Chad	Doba	11.42
Colombia	Acordionero	6.96
	Cano Limon	9.29
	Castilla	10.55
	Cusiana	9.99
	Magdalena	22.28
	Rubiales	9.79
	South Blend	9.25
	Vasconia	9.62
Congo	Azurite	10.25
	Djeno	10.73
Ecuador	Napo	8.31
	Oriente	10.07
Equatorial Guinea	Ceiba	7.82
	Zafiro	20.56
Ghana	Ten Blend	8.08
Iran	Dorood	12.65
	Forozan	21.97
	Iran Heavy	13.25
	Iran Light	14.35
	Lavan	11.11
	Nowruz-Soroosh	10.53
	Sirri	10.15
Iraq	Basra Light	13.45
	Basra Heavy	10.69
Kuwait	Kuwait	10.56
Libya	Amna	15.82
Malaysia	Tapis	12.73
Mauritania	Chinquetti	13.74
Mexico	Isthmus	11.31
	Isthmus Topped	14.31
	Maya	7.85
Neutral Zone	Eocene	7.85
	Khafji	7.84
	Ratawi	9.42
Nigeria	Agbami	12.04
	Amenam	10.65
	Antan	21.98
	Bonga	5.06
	Bonny	9.91
	Brass	14.27
	EA	6.66
	Erha	10.91
	Escravos	12.00
	Forcados	8.97
	Okono	8.67
	OKWB	22.76
	Pennington	11.18
	Qua Iboe	11.45
	Yoho	11.45
Oman	Oman	13.32
Peru	Loreto	9.86
	Mayna	11.07
	Pirana	8.43
Russia	ESPO	11.55
	M100	17.35
	Sokol	6.94
	Vityaz	9.60
Saudi Arabia	Arab Extra Light	9.41
	Arab Light	9.23
	Arab Medium	8.72
	Arab Heavy	7.92
Thailand	Bualuang	4.07
Trinidad	Calypso	7.41
	Galeota	11.41
UAE	Murban	10.01
	Upper Zakum	7.96
Venezuela	Bachaquero	28.75
	Boscan	13.91
	Hamaca	23.04
	Hamaca DCO	10.02
	Laguna	28.75
	Mesa 30	12.49
	Petrozuata (all synthetic grades)	23.09
	Santa Barbara	17.32
	Zuata (all synthetic grades)	23.04
US Alaska	Alaska North Slope	15.91
US Colorado	Niobrara	6.81
US Gulf of Mexico	Mars	6.62
US Louisiana	GCA	8.72
US New Mexico	Four Corners	11.11
	New Mexico Intermediate	11.11
	New Mexico Sour	11.11
	New Mexican Sweet	11.11
US North Dakota	Bakken	9.73
	North Dakota Sweet	9.73
	Williston Basin Sweet	9.73
US Oklahoma	Oklahoma Sour	11.93
	Oklahoma Sweet	11.93
US Texas	Eagle Ford Shale	11.93
	East Texas	11.93
	North Texas Sweet	11.93
	South Texas Sweet	11.93
	West Texas Intermediate	11.93
	West Texas Sour	11.93
US Utah	Covenant	4.43
	Grand Cane	6.92
	Utah Black Wax	5.85
	Utah Sweet	6.92
US Wyoming	Wyoming Sweet	10.98
US California Fields	Aliso Canyon	4.94
	Ant Hill	20.81
	Antelope Hills	2.84
	Antelope Hills, North	24.75
	Arroyo Grande	31.11
	Asphalto	8.01
	Bandini	3.09
	Bardsdale	3.47
	Barham Ranch	4.15
	Beer Nose	3.98
	Belgian Anticline	5.01
	Bellevue	5.95
	Bellevue, West	6.60
	Belmont, Offshore	5.12
	Belridge, North	4.11
	Belridge, South	17.09
	Beverly Hills	5.41
	Big Mountain	4.65
	Blackwells Corner	3.07
	Brea-Olinda	3.59
	Buena Vista	7.44
	Burrel	29.43
	Cabrillo	4.14
	Canal	4.40
	Canfield Ranch	4.53
	Carneros Creek	4.06
	Cascade	3.00
	Casmalia	10.26
	Castaic Hills	2.68
	Cat Canyon	7.83
	Cheviot Hills	3.49
	Chico-Martinez	48.13
	Cienaga Canyon	5.78
	Coalinga	25.81
	Coles Levee, N	4.09
	Coles Levee, S	5.87
	Comanche Point	5.03
	Coyote, East	5.96
	Cuyama, South	14.70
	Cymric	15.69
	Deer Creek	11.51
	Del Valle	5.78
	Devils Den	7.51
	Dominguez	3.57
	Edison	14.53
	El Segundo	4.38
	Elk Hills	8.02
	Elwood, S., Offshore	3.52
	Fruitvale	3.75
	Greeley	7.91
	Hasley Canyon	2.25
	Helm	3.99
	Holser	3.80
	Honor Rancho	3.43
	Huntington Beach	6.62
	Hyperion	1.90
	Inglewood	10.06
	Jacalitos	2.72
	Jasmin	16.59
	Kern Bluff	12.54
	Kern Front	35.68
	Kern River	15.09
	Kettleman Middle Dome	3.93
	Kettleman North Dome	3.42
	Landslide	12.53
	Las Cienegas	4.96
	Livermore	2.66
	Lompoc	28.45
	Long Beach	5.48
	Long Beach Airport	4.92
	Los Angeles Downtown	5.89
	Los Angeles, East	14.71
	Lost Hills	12.99
	Lost Hills, Northwest	5.36
	Lynch Canyon	23.10
	Mahala	4.99
	McCool Ranch	9.59
	McDonald Anticline	4.33
	McKittrick	25.31
	Midway-Sunset	29.33
	Montalvo, West	2.65
	Montebello	17.03
	Monument Junction	4.95
	Mount Poso	3.71
	Mountain View	3.97
	Newhall-Potrero	3.66
	Newport, West	5.21
	Oak Canyon	4.04
	Oak Park	3.01
	Oakridge	3.46
	Oat Mountain	3.17
	Ojai	4.94
	Olive	1.82
	Orcutt	11.76
	Oxnard	5.39
	Paloma	4.88
	Placerita	32.78
	Playa Del Rey	6.87
	Pleito	2.09
	Poso Creek	21.96
	Pyramid Hills	3.36
	Railroad Gap	7.08
	Raisin City	9.13
	Ramona	4.47
	Richfield	4.75
	Rincon	4.88
	Rio Bravo	6.98
	Rio Viejo	2.74
	Riverdale	3.80
	Rose	2.91
	Rosecrans	5.76
	Rosecrans, South	3.54
	Rosedale	2.35
	Rosedale Ranch	8.32
	Round Mountain	24.04
	Russell Ranch	8.58
	Salt Lake	3.18
	Salt Lake, South	6.34
	San Ardo	26.42
	San Miguelito	5.25
	San Vicente	3.22
	Sansinena	3.21
	Santa Clara Avenue	3.53
	Santa Fe Springs	12.53
	Santa Maria Valley	4.80
	Santa Susana	5.29
	Sargent	4.00
	Saticoy	3.68
	Sawtelle	2.56
	Seal Beach	5.19
	Semitropic	4.30
	Sespe	3.98
	Shafter, North	3.32
	Shiells Canyon	5.07
	South Mountain	3.58
	Stockdale	2.18
	Tapia	6.92
	Tapo Canyon, South	3.08
	Tejon	13.77
	Tejon Hills	9.39
	Tejon, North	5.63
	Temescal	3.40
	Ten Section	7.50
	Timber Canyon	4.74
	Torrance	3.99
	Torrey Canyon	3.52
	Union Avenue	5.58
	Vallecitos	4.53
	Ventura	4.54
	Wayside Canyon	2.36
	West Mountain	3.53
	Wheeler Ridge	2.80
	White Wolf	1.92
	Whittier	3.71
	Wilmington	8.31
	Yowlumne	13.90
	Zaca	9.53
US Federal OCS	Beta	1.59
	Carpinteria	3.28
	Dos Cuadras	4.57
	Hondo	5.93
	Hueneme	4.67
	Pescado	7.07
	Point Arguello	14.07
	Point Pedernales	8.26
	Sacate	4.77
	Santa Clara	2.46
	Sockey	13.09
Default		11.78

* Based on production and transport of the crude oil supplied to the indicated California refinery(ies) during the baseline calendar year, 2010.

(c)Credits for Producing and Transporting Crudes using Innovative Methods. Credits may be generated for crude oil that has been produced or transported using innovative methods and delivered to California refineries for processing.

(1)General Requirements.

(A) For the purpose of this section, an innovative method means crude production or transport using one or more of the following technologies:

1. Solar steam generation (generated steam of 45 percent quality or greater). Steam must be used onsite at the crude oil production or transport facilities.

2. Carbon capture and sequestration (CCS). Carbon capture must take place onsite at the crude oil production or transport facilities.

3. Solar or wind electricity generation. To qualify for the credit, electricity must be produced and consumed onsite or be provided directly to the crude oil production or transport facilities from a third-party generator and not through a utility owned transmission or distribution network. Energy storage may be used to increase the quantity of electricity supplied to crude oil production or transport facilities from intermittent solar and wind electricity generation sources.

4. Solar heat generation including, but not limited to, boiler water preheating and solar steam generation with a steam quality of less than 45 percent. Heat must be used onsite at the crude oil production or transport facilities.

5. Renewable natural gas (RNG) or biogas energy. RNG or biogas must be physically supplied directly to the crude oil production or transport facilities.

(B) The innovative method must become operational no earlier than 2010 for solar steam and CCS projects or January 1, 2015, for any other innovative method above. Any project must be approved for use by the Executive Officer before generating credit under the LCFS regulation. Projects that utilize carbon capture and sequestration are subject to the provisions of section 95490.

No credits may be generated for any quarter preceding the quarter in which the application is approved.

(C) The project operator must initiate review of the opt-in project using the innovative method through a written application to the Executive Officer. If the innovative method involves steam, heat, or electricity produced by a third party and delivered to the crude oil producer or transporter, both the crude producer or transporter and the third party must apply and will be considered joint applicant project operator for approval of the innovative method. If more than one crude producer or transporter receives steam, heat, or electricity from a single third-party facility, each crude producer or transporter must submit an independent application with the third party as a joint applicant on each submittal. If the innovative method involves delivery of carbon captured by the crude oil producer or transporter to a third party to store the carbon, both the crude producer or transporter and the third party must apply and will be considered joint applicants for approval of the innovative method.

(D) A crude oil producer or transporter must register under section 95483.1 as an opt-in project operator to receive credits for an approved innovative method. The crude oil producer or transporter, through a written agreement, may elect to transfer the right to opt in for credit generation to the joint applicant. If neither the crude oil producer or transporter nor the joint applicant using an approved innovative method registers as an opt-in project operator, credits generated by the producer's or transporter's use of the innovative method may be claimed by California refinery(ies) that purchase the crude produced or transported using the innovative method if CARB receives all information it needs to ensure compliance with limitations and reporting requirements applied to the method.

(E) The innovative method must achieve one of the following threshold criteria:

1. A carbon intensity reduction from the comparison baseline of at least 0.10 gCO₂e/MJ, or

2. An emissions reduction of at least 5,000 metric tons CO₂e per year.

If the innovative method involves more than one crude producer or transporter using steam, heat, or electricity produced at a single third-party facility, the threshold criteria listed above may apply to the aggregated project total.

(F) Credits for producing crude oil with innovative methods must be calculated as specified below:

For crude oil produced using solar steam generation:

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Where avoided emissions, as calculated using the OPGEE model assuming displacement of steam produced using a natural gas fired once through steam generator, are correlated with the steam quality as tabulated below:

*Steam quality*	*Avoided emissions (gCO₂e/bbl solar steam)*
95% and above	34,875
85% to <95%	30,443
75% to <85%	28,188
65% to <75%	25,932
55% to <65%	23,677
45% to <55%	21,421

For crude oil produced or transported using solar or wind based electricity:

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For crude oil produced or transported using any other innovative method listed in section 95489(c)(1)(A):

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where:

Credits_Innov(MT) means the amount of LCFS credits generated (a positive value), in metric tons, by the volume of a crude oil produced or transported using the innovative method and delivered to California refineries for processing;

V_steam means the overall volume, in barrels cold water equivalent, of steam injected;

f_solar means the fraction of injected steam that is produced using solar;

V_{crudeproduced} means the volume, in barrels, of crude oil produced or transported using the innovative method;

V_Innov means the volume, in barrels, of crude oil produced or transported using the innovative method and delivered to California refineries for processing. If the crude produced or transported using the innovative method and delivered to California refineries is part of a blend, then V_Innov is the volume of blend delivered to California refineries times the volume fraction of the crude within the blend that was produced or transported using the innovative method.

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E_electricity means the overall electricity consumption to produce or transport the crude, in kW-hr;

f_renew means the fraction of consumed electricity that is produced using qualifying solar or wind power;

[DELTA] CI_Innov means the reduction in carbon intensity (a positive value), in gCO₂e/MJcrude, associated with crude oil production or transport with the innovative method as compared to crude oil production or transport by a baseline process without the method (hereafter referred to as the comparison baseline method); and

E_Innov means the energy density (lower heating value), in MJ/barrel, for the crude oil produced or transported with the innovative method.

(G) Renewable or low-CI energy sources listed in (A) that are used to generate LCFS credit for innovative crude may not also claim renewable energy certificates or other environmental attributes recognized or credited by any other jurisdiction or regulatory program, other than the market-based compliance mechanism set forth in title 17, California Code of Regulations Chapter 1, Subchapter 10, article 5 (commencing with section 95800).

(2)Application and Data Submittal. Unless otherwise noted, an application for an innovative method shall comply with the requirements below:

(A) An applicant that submits any information or documentation in support of a proposed innovative method must include with the application a written statement clearly showing that the applicant understands and agrees to the following:

1. That all information in the application not identified as confidential business information is subject to public disclosure pursuant to California Code of Regulations, title 17, sections 91000 through 91022 and the California Public Records Act (Government Code §§ 6250 et seq.), and that information claimed by the applicant to be confidential might later be disclosed under section 91022 if the state board determines the information is subject to disclosure.

2. That the crude oil producer or transporter or third-party joint applicant must register under section 95483.1 as an opt-in project operator to receive LCFS credit for an innovative method, and that if the crude oil producer or transporter or third-party joint applicant does not register as an opt-in project operator, credits from an approved innovative method may be claimed by California refinery(ies) that purchase crude produced from the innovative method.

(B) An application must contain the following summary material:

1. A complete description of the innovative method and how emissions are reduced;

2. An engineering drawing(s) or process flow diagram(s) that illustrates the innovative method and clearly identifies the system boundaries, relevant process equipment, mass flows, and energy flows necessary to calculate the innovative method credits;

3. A map including global positioning system coordinates for the facilities described in section 95489(c)(2)(B)2.; and

4. A preliminary estimate of the potential innovative method credit, calculated as required in section 95489(c)(1)(F), including descriptions and copies of production and operational data or other technical documentation utilized in support of the calculation.

(C) An application, except for solar-generated steam for crude oil production (45 percent steam quality or greater), wind-based electricity, or solar-based electricity, shall include a detailed description of the innovative method and its comparison baseline method. The description of innovative and comparison baseline methods can be limited to those portions of the crude production or transport process affected by the innovative method. The description of the innovative method and its comparison baseline method must include each of the following, to the extent each is applicable to the innovative method:

1. Schematic flow charts that identify the system boundaries used for the purposes of performing the life cycle analyses on the proposed innovative method and the comparison baseline method. Each piece of equipment or stream appearing on the process flow diagrams shall be clearly identified and shall include data on its energy and materials balance. The system boundary shall be clearly shown in the schematic.

2. A description of all material and energy inputs entering the system boundaries, including their points of origination, modes of transportation, transportation distances, means of storage, and all processing to which material inputs are subject.

3. A description of all material and energy products, co-products, byproducts, and waste products leaving the system boundaries, including their respective destinations, transportation modes, and transportation distances.

4. A description of all facilities within the system boundaries involved in the production or transport of the crude oil and other byproducts, co-products, and waste products.

5. A description of all combustion and electricity-powered equipment within the system boundaries, including their respective capacities, sizes, or rated power, fuel utilization type, fuel shares, energy efficiency (lower heating value basis), and proposed use.

6. A description of the thermal and electrical energy production that occurs within the system boundaries, including the respective capacities, sizes, or rated power, fuel utilization type, fuel shares, energy efficiency (lower heating value basis), and proposed use.

7. A description of all sources of flared, vented, and fugitive emissions within the system boundaries, including the compositions of the flared, vented, and fugitive emission streams leaving the system boundaries.

(D) An application, except for solar-generated steam for crude oil production (45 percent steam quality or greater), wind-based electricity, or solar-based electricity shall include descriptions of the life cycle assessments (LCAs) performed on the proposed innovative method and its comparison baseline method using the CARB OPGEE model or an alternative model or LCA methodology approved by the Executive Officer. Electronic copies of the models and calculations shall be provided with the application. The descriptions of the life cycle assessment results must include each of the following:

1. Detailed information on the energy consumed, the greenhouse gas emissions generated for the innovative method and the comparison baseline method;

2. Documentation of all non-default model input values used in the emissions calculation process. If values for any significant production parameters are unknown, the application shall so state and model default values shall be used for these parameters in the analysis;

3. Detailed description of all supporting calculations that were performed outside of the model; and

4. Documentation of all modifications other than those covered by subsection 2., above, made to the model. This discussion shall include sufficient specific detail to enable the Executive Officer to replicate all such modifications and, in combination with the inputs and supporting calculations identified in subsections 2. and 3., above, replicate the carbon intensity results reported in the application.

(E) An application shall include a list of references covering all information sources used in the preparation of the life cycle analysis and calculation of innovative method credit. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(F) An application shall include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual and/or intended long-term, steady-state operation of the innovative method described in the application packet. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(G) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).

(H) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(3)Application Approval Process. The application must be approved by the Executive Officer before the crude oil producer or transporter, joint applicant, or purchasing refinery may generate credit for the innovative method.

(A) Within 30 calendar days of receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer shall advise the applicant in writing either that:

1. The application is complete, or

2. The application is incomplete, in which case the Executive Officer will identify which requirements of section 95489(c) have not been met.

a. The applicant may submit additional information to correct deficiencies identified by the Executive Officer.

b. If the applicant is unable to achieve a complete application within 180 days of the Executive Officer's receipt of the original application, the application will be denied on that basis, and the applicant will be informed in writing.

(B) After accepting an application as complete, the Executive Officer will post the application at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm. Public comments will be accepted for 10 days following the date on which the application was posted. Only comments related to potential factual or methodological errors may be considered. The Executive Officer will forward to the applicant all comments identifying potential factual or methodological errors. Within 30 days, the applicant shall either submit revisions to its application to the Executive Officer, or submit a detailed written response to the Executive Officer explaining why no revisions are necessary.

(C) The Executive Officer shall not approve an application if the Executive Officer determines, based upon the information submitted in the application and any other available information, that:

1. The proposed crude production or transport method is not an innovative method, as that term is defined in section 95489(c)(1).

2. Based upon the application information submitted pursuant to this section, the applicant's greenhouse gas emissions calculations cannot be replicated using the CARB OPGEE model or alternative model or LCA methodology approved by the Executive Officer.

(D) As part of any action approving an application, the Executive Officer may prescribe conditions of the approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the innovative method. If the Executive Officer determines the application will not be approved, and the applicant will be notified in writing and the basis for the disapproval shall be identified.

(4)Recordkeeping and Reporting. Each applicant that receives approval for an innovative method must maintain records identifying each facility at which it produces crude oil for sale in California under the approved innovative method. For each such facility, the applicant must report quarterly (through a Project Report) and maintain records for at least ten years showing:

(A) The volume (barrels) of crude oil produced or transported using the approved innovative method and the crude name(s) under which it is marketed.

(B) If the crude oil produced or transported with an approved innovative method is marketed as part of a crude blend that is not wholly refined in California, the name of the blend and the volume fraction that the crude produced with the innovative method contributes to the blend.

(C) For crude oil imported into California, documentation showing that the innovative crude was supplied to one or more California refinery and the volume (barrels) of innovative crude supplied to each California refinery. For crude oil produced in California, documentation showing the innovative crude was supplied to one or more California refinery, the total volume (barrels) of innovative crude supplied to California refineries, and the total volume (barrels) of innovative crude exported from California.

(D) For solar or wind electricity projects, the following additional recordkeeping and reporting will be required:

1. Metered data on solar or wind electricity consumed at the crude oil production or transport facilities during the quarter (kWh);

2. Metered data on total electricity consumed at the crude oil production or transport facilities during the quarter (kWh); and

3. An attestation letter stating that all solar or wind electricity was supplied directly for crude oil production or transport and that the solar or wind electricity reported for generating LCFS credit did not produce renewable energy certificates or other environmental attributes recognized or credited by any other jurisdiction or regulatory program, other than the market-based compliance mechanism set forth in title 17, California Code of Regulations Chapter 1, Subchapter 10, article 5 (commencing with section 95800).

(E) For solar steam projects at crude oil production facilities, the following additional recordkeeping and reporting will be required:

1. Metered data on solar steam consumed for crude oil production at the oil field during the quarter (barrels cold water equivalent);

2. Metered data on total steam consumed for crude oil production at the oil field during the quarter (barrels cold water equivalent);

3. Volume-weighted average steam quality for solar steam consumed for crude oil production at the oil field during the quarter; and

4. An attestation letter stating that all solar steam was supplied directly for crude oil production at the oil field and that the solar steam reported for generating LCFS credit did not produce renewable energy certificates or other environmental attributes recognized or credited by any other jurisdiction or regulatory program, other than the market-based compliance mechanism set forth in title 17, California Code of Regulations Chapter 1, Subchapter 10, article 5 (commencing with section 95800).

(F) Any additional records that the Executive Officer requires to be kept in pursuant to section 95489(c)(3)(D), and records that demonstrate compliance with all special limitations and operating conditions specified pursuant to section 95489(c)(3)(D).

These records shall be submitted to the Executive Officer during the quarterly reporting period specified in section 95491(b).

(5)Credits for Producing or Transporting Crude Oil Using Innovative Methods. Credits for producing or transporting crude oil using innovative methods may be generated quarterly or annually, at the discretion of the credit generating party. Within 30 days of receiving reports from California refineries detailing crude names and volumes supplied to the refineries during the applicable crediting period, any records requested of the applicant under section 95489(c)(4), and a positive or qualified positive verification of the applicable Project Reports per section 95500, the Executive Officer will determine the number of credits to be issued to the crude oil producer or transporter, joint applicant, or purchasing refinery for the innovative method. An adverse verification statement would result in no credit issuance and Executive Officer investigation.

(d)Low-Complexity/Low-Energy-Use Refinery Credit. A refinery may receive credit for being a low-complexity and low-energy-use refinery.

(1) To be eligible for the credit calculation in section 95489(d)(3), a Low-Complexity/Low-Energy-Use Refinery must meet the criteria in the definition of "Low-Complexity/Low-Energy-Use Refinery" provided in section 95481(a) using the following equations:

(A) Modified Nelson Complexity Score

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where:

index_i is the 2012 Nelson Complexity Index listed in Table 10;

Capacity_i is the capacity of each unit listed in Table 10 in barrels per day unless otherwise indicated;

Capacity_dist is the capacity of the distillation unit in barrels per day;

i is the process unit; and

n is the total number of process units.

Table 10. Nelson Complexity Indices.

	*Process Unit*	*Index Value*

	Atmospheric Distillation	1.00
	Vacuum Distillation	1.30
	Thermal Processes	2.75
	Delayed and Fluid Coking	7.50
	Catalytic Cracking	6.00
	Catalytic Reforming	5.00
	Catalytic Hydrocracking	8.00
	Catalytic Hydrorefining/Hydrotreating	2.50
	Alkylation	10.00
	Polymerization	10.00
	Aromatics	20.00
	Isomerization	3.00
	Oxygenates	10.00
	Hydrogen (MMcfd)	1.00
	Sulfur Extraction (Metric Tons per day)	240.00

(B) Annual Energy Use

Annual Energy Use (in MMBtu) = fuel use + electricity + thermal

where:

fuel use is the MMBtu of all fuel combusted during the compliance period;

electricity is the imported electricity minus exported electricity per compliance period converted to MMBtu by using 3.142 MMBtu/MWh; and

thermal is the imported thermal energy minus exported thermal energy per compliance period in MMBtu.

(2) In addition to other reporting requirements, a refinery operator that is claiming credits for a Low-Complexity/Low-Energy-Use Refinery must also report the following volumes produced during a specific calendar year and sold, supplied, or offered for sale in California for that refinery:

(A) The volume of CARBOB and volume of diesel produced from crude oil;

(B) The volume of CARBOB and volume of diesel produced from transmix;

(C) The volume of CARBOB and volume of diesel produced from Petroleum Intermediate feedstocks; and

(D) The volume of CARBOB and volume of diesel purchased for blending.

(E) If CARBOB or diesel is produced from feedstock other than crude oil (volumes in (2)(B) through (D), above), a separate annual report with third-party verification is required for produced volumes of CARBOB and diesel from crude oil. The annual report must be submitted by March 31st and the verification statement is due August 31st.

(3) Credits for a low-complexity/low-energy-use refinery must be calculated using the following equations:

(A)Carbon Intensity Adjustment. For volumes reported in section 95489(d)(2)(A) a non-transferable credit of 5.0 gCO₂e/MJ will be generated.

(B)Credit Calculation. For CARBOB and diesel volumes reported in section 95489(d)(2)(A):

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(C) Credits created pursuant to section 95489(d) may not be sold or transferred to any other party.

(4)Application Contents and Submittal. An application for Low-Complexity/Low-Energy-Use Refinery Credits must comply with the following requirements:

(A) An application must contain the following summary material:

1. A complete description of the refinery including processing units and their capacity, and energy use;

2. An engineering drawing(s) or process flow diagram(s) that illustrates the project, relevant process equipment, and mass or volumetric flows necessary to calculate the Low-Complexity/Low-Energy-Use Refinery Credits; and

3. A preliminary estimate of the credit, calculated as required in section 95489(d)(3)(B), including descriptions and copies of production and operational data other technical documentation utilized in support of the calculation.

(B) An application must include a list of references covering all information sources used in the calculation of Low-Complexity/Low-Energy-Use Refinery Credits. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(C) An application must include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual operation of the refinery. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(D) An applicant that submits any information or documentation in support of a proposed Low-Complexity/Low-Energy-Use Refinery Credit must include a written statement clearly showing that the applicant understands and agrees that all information in the application not identified as confidential business information is subject to public disclosure pursuant to California Code of Regulations, title 17, sections 91000 through 91022 and the California Public Records Act (Government Code, §§ .6250 et seq.), and that information claimed by the applicant to be confidential might later be disclosed under section 91022 if the Board determines the information is subject to disclosure.

(E) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(F) If there is a change to an approved Low-Complexity/Low-Energy-Use Refinery which could impact the eligibility of the refinery, the refinery operator must notify the Executive Officer in writing within 30 business days after the material change has occurred, and the previously-approved application shall become invalid 30 business days after the material change has occurred.

(5)Credit Issuance. The Executive Officer will issue Low-Complexity/Low-Energy-Use Refinery Credits annually for the prior year upon the completion of the following:

(A) Confirmation of eligibility by the Executive Officer based on the refinery energy use verified under MRR annually.

(B) Receipt of a positive or qualified positive verification statement for the quarterly fuel transactions reported pursuant to section 95489(d)(2). An adverse verification statement would result in no credit issuance and Executive Officer investigation.

(e)Refinery Investment Credit Program. A refinery may receive credit for reducing greenhouse gas emissions from its facility. Any such credits must be based on fuel volumes sold, supplied, or offered for sale in California as set forth below.

(1)General Requirements.

(A) The application for a refinery investment credit must be submitted during or after the year 2016 and must be approved pursuant to this section before the refinery can receive credit. A project is eligible if the project completion date is on January 1, 2016 or later.

(B) The refinery investment credit project must occur within the boundaries of the refinery, unless it involves carbon capture from hydrogen production. Sequestration sites for CCS do not need to be on-site at the refinery.

(C) The applicant must demonstrate that any net increases in criteria air pollutant or toxic air contaminant emissions from the refinery investment credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(D) The following project types are eligible for the refinery investment project credits:

1. CO₂ capture at refineries, or at hydrogen production facilities that supply hydrogen to refineries, and subsequent geologic sequestration;

2. Use of renewable or low-CI electricity supplied behind the meter that meets the requirements of 95488.8(h)(1);

3. Use of lower-CI process energy such as biomethane, renewable propane, and renewable coke, to displace fossil fuel;

4. Electrification at refineries that involves substitution of high carbon fossil energy input with grid electricity.

5. Process improvement projects that deliver a reduction in baseline refinery-wide greenhouse gas emissions as outlined in 95489(e)(1)(G)2. Greenhouse gas emissions reductions due to curtailment, simple maintenance; and crude oil switching that results in greenhouse gas reductions in the project system boundary without improvements in the processing units or equipment involved are not eligible. For the purposes of this section, curtailment is defined as an intentional operational and/or physical change exclusively for the reduction or cessation of total gasoline and gasoline blendstocks and diesel production at the refinery. Curtailment does not include the coincidental rate reduction or shutdown of associated emitting equipment as part of a process improvement project or projects aimed primarily at optimizing refinery efficiency.

(E) Credits must be pro-rated for years where the units within the project system boundary were non-operational. This pro-rating will consider the calendar days of operation relative to non-operation.

(F) Credits must be pro-rated if the hydrogen production facility that captures CO₂ does not supply all of its hydrogen to the applicant refinery.

(G) Credits generated pursuant to section 95489(e)(1)(D)5. are subject to the following limitations:

1. Credits may not be used to meet more than 10 percent of any entity's annual compliance obligation. The Executive Officer will exclude incremental deficits incurred pursuant to section 95489(b) when assessing this 10 percent limitation.

2. Each project must generate at least 10,000 credits or one percent of the facility's annual pre-project emissions, whichever is less.

3. Crediting is limited to 15 years from the quarter in which the Executive Officer approves the project's application.

(H) Projects that utilize carbon capture and sequestration are subject to the provisions of section 95490.

(2)Calculation of Credits.

(A) For carbon capture and sequestration projects, determine the credit in accordance with the CCS protocol.

(B) For other refinery investment credit projects, determine the credit as follows:

1. Establish a project system boundary. The project system boundary should include direct impacts and at least first order indirect impacts;

2. Determine the credit for the refinery investment credit project by calculating pre-project life cycle greenhouse gas emissions and project life cycle greenhouse gas emissions within the project system boundary;

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(3)Application Contents and Submittal. Unless otherwise noted, an application for refinery investment credits must comply with the following requirements:

(A) An application must contain the following summary material:

1. A complete description of the refinery investment credit project and how emissions are reduced;

2. An engineering drawing(s) or process flow diagram(s) that illustrates the project and clearly identifies the system boundaries, relevant process equipment, mass flows, and energy flows necessary to calculate the refinery investment credits, including any directly affected or indirectly affected processing units (at least first order indirect impacts) and a whole refinery diagram if requested; and

3. A preliminary estimate of the refinery investment credit, calculated as required in section 95489(e)(2), including descriptions and copies of any available production and operational data including energy use and other technical documentation utilized in support of the calculation. The application must contain process-specific data showing that the reductions are part of the transportation fuel pathway.

4. Supporting documents demonstrating that second or higher order indirect impacts are not significant beyond the identified project system boundary.

(B) An application must include a list of references covering all information sources used in the calculation of refinery investment credit. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(C) An application must include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual and/or intended long-term, steady-state operation of the refinery investment credit project described in the application packet. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(D) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).

(E) An application must include all relevant documentation identifying any changes, including decreases or increases, in criteria air pollutant or toxic air contaminant emissions based on local air permits and supporting permit documentation from the refinery investment credit project. An applicant must include a signed transmittal letter from the applicant attesting that any net increases in emissions from the refinery investment credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(F) An applicant that submits any information or documentation in support of a proposed refinery investment credit must include a written statement clearly showing that the applicant understands and agrees that all information in the application not identified as confidential business information is subject to public disclosure pursuant to California Code of Regulations, title 17, sections 91000 through 91022 and the California Public Records Act (Government Code, §§ .6250 et seq.), and that information claimed by the applicant to be confidential might later be disclosed under section 91022 if the Board determines the information is subject to disclosure.

(G) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(H) Applications for process improvement projects must be submitted on or before December 31, 2025.

(4)Application Approval Process. An application must be approved by the Executive Officer before the refinery investment credit project can generate credits under the LCFS regulation.

(A) After receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer will advise the applicant in writing either that:

1. The project system boundary is appropriate and the application is complete, or

2. The application is incomplete, in which case the Executive Officer will identify which requirements of section 95489(e) have not been met. The applicant may submit additional information to correct deficiencies identified by the Executive Officer. If the applicant is unable to achieve a complete application within 180 calendar days of the Executive Officer's receipt of the original application, the application will be denied on that basis, and the applicant will be informed in writing.

(B) After accepting an application as complete, the Executive Officer will post the application at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm. Public comments will be accepted for 10 calendar days following the date on which the application was posted. Only comments related to potential factual or methodological errors may be considered. The Executive Officer will forward to the applicant all comments identifying potential factual or methodological errors. Within 30 business days, the applicant must either submit revisions to its application to the Executive Officer, or submit a detailed written response to the Executive Officer explaining why no revisions are necessary.

(C) If the Executive Officer finds that an application meets the requirements set forth in section 95489(e), the Executive Officer will take final action to approve the refinery investment credit project. The Executive Officer may prescribe conditions of approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the project. If the Executive Officer finds that an application does not meet the requirements of section 95489(e), the application will not be approved, and the applicant will be notified in writing, and the basis for the disapproval will be identified.

(5)Credit Review and Issuance. Credits for refinery investment projects may be generated quarterly or annually, at the discretion of the credit generating party.

(A) Upon the completion of reporting period in which a positive or qualified positive verification statement for the applicable Project Reports per section 95500(e) is received, the Executive Officer will determine the number of credits to be issued to the applicants. An adverse verification statement would result in no credit issuance and Executive Officer investigation.

(6)Recordkeeping. For each approved refinery investment credit project the refinery must compile and retain records pursuant to section 95491.1(a)(2) showing compliance with all limitation and recordkeeping requirements identified by the Executive Officer pursuant to section 95489(e)(4)(C), above.

(f)Renewable Hydrogen Refinery Credit Program. A refinery may receive credit for greenhouse gas emission reductions from the production of CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen. Any such credits must be based on fuel volumes sold, supplied, or offered for sale in California as set forth below.

(1)General Requirements.

(A) In order to receive a renewable hydrogen refinery credit, a refiner must produce CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen.

(B) The applicant must demonstrate that any net increases in criteria air pollutant or toxic air contaminant emissions from the renewable hydrogen refinery credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(2)Calculation of Credits.

(A) For CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen produced from RNG that displaces fossil natural gas in a steam methane reforming unit, the calculation of credits generated quarterly or annually must be as follows:

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(B) For CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen produced from other production processes, such as electrolysis using renewable electricity or syngas from biomass gasification, the calculation of credits generated quarterly or annually must be as follows:

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(3)Application Contents and Submittal. Unless otherwise noted, an application for renewable hydrogen credits must comply with the following requirements:

(A) An application must contain the following summary material:

1. A complete description of the production of CARBOB or diesel fuel with hydrogen and how renewable hydrogen is replacing fossil hydrogen in that process;

2. Purchase records identifying the renewable hydrogen and/or renewable feedstock used to produce the renewable hydrogen; and

3. A preliminary estimate of the renewable hydrogen refinery credit, calculated as required in section 95489(f)(2), including descriptions and copies of production and operational data, including energy use, and other technical documentation utilized in support of the calculation. The application must contain process-specific data showing that the reductions are part of the transportation fuel pathway.

(B) An application must include a list of references covering all information sources used in the calculation of renewable hydrogen refinery credit project. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(C) An application must include a signed transmittal letter from the applicant attesting under penalty of perjury under California law, to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual and/or intended long-term, steady-state operation of renewable hydrogen refinery credit project described in the application packet. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(D) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).

(E) An application must include all relevant documentation identifying any changes, including decreases or increases, in criteria air pollutant or toxic air contaminant emissions based on local air permits from the renewable hydrogen refinery credit project. An applicant must include a signed transmittal letter from the applicant attesting that any net increases in emissions from renewable hydrogen refinery credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(F) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(4)Application Approval Process. An application must be approved by the Executive Officer before the renewable hydrogen refinery credit project can generate credits under the LCFS regulation.

(A) Within 30 calendar days of receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer will advise the applicant in writing either that:

1. The application is complete, or

2. The application is incomplete, in which case the Executive Officer will identify which requirements of section 95489(f) have not been met. The applicant may submit additional information to correct deficiencies identified by the Executive Officer. If the applicant is unable to achieve a complete application within 180 days of the Executive Officer's receipt of the original application, the application will be denied on that basis, and the applicant will be informed in writing.

(B) If the Executive Officer finds that an application meets the requirements set forth in section 95489(f), the Executive Officer will take final action to approve the renewable hydrogen refinery credit project. The Executive Officer may prescribe conditions of approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the project. If the Executive Officer finds that an application does not meet the requirements of section 95489(f), the application will not be approved, and the applicant will be notified in writing, and the basis for the disapproval will be identified.

(5)Credit Review and Issuance. Credits for renewable hydrogen refinery projects may be generated quarterly or annually, at the discretion of the credit generating party.

(6)Recordkeeping. For each approved renewable hydrogen refinery credit project, the refinery must compile and retain records pursuant to section 95491.1(a)(2) showing compliance with all limitation and recordkeeping requirements identified by the Executive Officer pursuant to section 95489(f)(4)(B), above.

Cal. Code Regs. Tit. 17, § 95489

1. New section filed 1-12-2010; operative 1-12-2010 pursuant to Government Code section 11343.4 (Register 2010, No. 3).
2. Repealer and new section filed 11-16-2015; operative 1-1-2016 (Register 2015, No. 47).
3. Amendment 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 1-12-2010; operative 1-12-2010 pursuant to Government Code section 11343.4(Register 2010, No. 3).
2. Repealer and new section filed 11-16-2015; operative 1/1/2016 (Register 2015, No. 47).
3. Amendment filed 1-4-2019; operative 1/4/2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 1).