California CCS Protocol takes effect under low carbon fuel standard
8th January 2019
Sacramento, California – The Global CCS Institute welcomes California’s Air Resources Board’s (ARB) decision to include a protocol for carbon capture and storage (CCS) in its Low Carbon Fuel Standard (LCFS), a rule which became effective on January 1, 2019. “The inclusion of the CCS protocol in the LCFS signals that California – arguably one of the most active states when it comes to combatting climate change – recognizes that CCS has a role in its energy transition to deliver emissions reductions”, says Guloren Turan, General Manager, Advocacy and Communications, at the Global CCS Institute.
The protocol allows transportation fuels whose lifecycle emissions have been reduced through CCS to become eligible for credits under the LCFS. Currently, the credits are trading at roughly $180 per ton, and can be combined with the federal tax credit for CCS projects. Also known as 45Q, the federal tax credit provides $50/t for CO2 stored geologically, and $35/t for CO2 stored permanently via enhanced oil recovery. “In the medium term, the establishment of a CCS protocol also paves the way for CCS to become eligible in the state’s Cap-and-Trade Program”, says Turan.
CARB’s decision comes on the heels of two other landmark climate commitments in California, which the Global CCS Institute applauds. In September, the California State Legislature passed SB100, which requires the state to generate 100% of electricity from carbon-free sources with a renewable portfolio standard of 60% built in. The same month, former Governor Jerry Brown also signed Executive Order B-55-18, requiring the entire economy to achieve carbon neutrality by 2045.