Can Low Carbon Fuel Policies Hold Up Against the Pressure?

In the same way that US ambassadors are acting as sales reps for the biotech industry, "twisting the arms of countries" to push sales of GMO seeds, the top trade official is doing the same for the tar sands industry.

U.S. Trade Representative Michael Froman is pushing back against Europe’s proposed clean fuel requirement that would rate conventional fuels on their carbon content. He’s trying to get the EU to relax those standards as part of negotiating the Transatlantic Trade and Investment Partnership – the free trade pact with Europe. 

Why? So that US refiners can sell tar sands oil on the European market. While tar sands oil originates in Canada, much of it is processed in U.S. refineries.

Under EU’s Fuel Quality Directive, which seeks to cut the carbon intensity of fuels 6% by 2020, tar sands oil would be rated as high emissions diesel, which discourages – but doesn’t prevent – fuel suppliers from buying tar sands oil. 

The EU uses lifecycle analysis to rank the carbon intensity of fuels to guide fuel suppliers to lower carbon sources. Tar sands oil would be ranked at 107 grams of carbon per megajoule, compared to conventional crude at 87.5 grams.

During a July hearing where Froman testified, Representative Kevin Brady (R-TX) called  EU’s proposed ranking "discriminatory, environmentally unjustified and could constitute a barrier to U.S.-EU trade," reports Huffington Post. 

Froman’s responded that he "shares those concerns" and is seeking "improvements in the EU’s overall regulatory practices" through the negotiation process. "We continue to press the European Commission to take the views of stakeholders, including U.S. refiners, under consideration as they finalize these amendments," said Froman.

The Koch Brothers have been pretty successful so far in preventing Clean Fuel Standards from gaining traction in the US. In the Northeast, 11 states are developing a Clean Fuel Standard along the lines of California’s, but progress is stalled by threats and misinformation. 

One of the Koch businesses handles about 25% of tar sands imports into the US – they’re one of the biggest refiners of Alberta oil sands crude oil.

Appeals Court Upholds California’s Low Carbon Fuel Standard

Meanwhile, a federal appeals court has upheld California’s low carbon fuel standard, which was challenged by fossil fuel interests, dairy and ethanol industries. The judge rejected their claim that the state is violating the constitution’s Commerce Clause because it impedes  interstate commerce. 

Like Europe’s proposed standard, California’s requires that the lifecycle of fuels be measured from production to use in transportation. Fuel producers – including ethanol – located outside the state believe it discriminates against importing their products because fuels produced in California don’t have to be shipped as far.

A federal judge ruled in the fuel producers’ favor, but the state appealed and won. 

"We will not, at the outset, block California from developing this innovative, nondiscriminatory regulation to impede global warming," says the ruling. "The Commerce Clause does not protect Plaintiffs’ ability to make others pay for the hidden harms of their products merely because those products are shipped across state lines." 

Transportation accounts for 40% of California’s emissions, making the standard a crucial component in meeting its goal of reducing state emissions to 1990 levels by 2020.

The Low Carbon Fuel Standard was enacted in 2007 as part of AB32, California’s bold climate change law. It requires the oil industry to gradually reduce the "carbon intensity" of transportation fuels by at least 10% by 2020.

The case could well be appealed to the Supreme Court.

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Comments on “Can Low Carbon Fuel Policies Hold Up Against the Pressure?”

  1. JayKay

    The LCFS was also challenged by ethanol and agricultural parties. I know pinning it all on “fossil fuel interests” fits the narrative of those evil, evil oil companies, but simple accuracy requires that you note that the plaintiffs in this case were not just petroleum companies.


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