Low Carbon Fuel Standard Under Development in Northeast, Mid-Atlantic

The governors of 11 Northeast and Mid-Atlantic states have signed a memorandum of understanding (MOU) to develop a comprehensive, regional low carbon fuel standard to reduce greenhouse gas emissions from transportation fuels.

A low carbon fuel standard is a market-based, technologically neutral
policy to reduce the average lifecycle greenhouse gas emissions of a
unit of useful energy. The lifecycle concept of the greenhouse gas
"footprint" includes all possible causes of greenhouse gas emissions,
direct (on-site, internal) and indirect (off-site, external, embodied,
upstream, downstream).

Based on letters of intent signed a year ago, several of the states have already begun preliminary work toward designing a low
carbon fuel standard. The Memorandum of Understanding is the next step,
establishing a process to develop a regional framework by 2011 and
examine the economic impacts of a standard program.

After a standard is developed, the states would then have to choose whether or not to implement it.

The states include Pennsylvania, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont–the same states involved in the Regional Greenhouse Gas Initiative, a mandatory, market-based effort to reduce greenhouse gas emissions in the northeastern and mid-atlantic states via cap-and-trad

Transportation fuels contribute about 30% of the greenhouse gas emissions in the Mid-Atlantic region.

Pennsylvania Governor Edward G. Rendell announced the MOU in a press statement. "Low carbon fuels are being manufactured right here in Pennsylvania, creating jobs and easing our dangerous reliance on foreign oil. Pennsylvania’s alternative energy initiatives already have put thousands of Pennsylvanians to work and attracted millions of dollars in private investment. As Pennsylvania works closely with our northeastern neighbors to develop a standard for the entire region, we can grow our economy at the same time we protect the planet."

Starting in January, all diesel fuel sold in the Pennsylvania must contain at least 2% biodiesel, since in-state production capacity hit 40 million gallons a year at the end of 2008. Under a state law Governor Rendell signed in July 2008, as Pennsylvania capacity to produce biodiesel grows, the required percentage of biodiesel grows.

Over the next decade, Pennsylvania expects to replace 900 million gallons of transportation fuel with locally produced alternative resources such as ethanol and biodiesel, or with fuels derived from coal liquefaction.

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