Fuel Buyers Summit: Unlocking the mysteries of low carbon fuel standard

Renewable diesel among winners in market, Boutwell says

The Fuel Buyers Summit explores the low carbon fuel standard.

(Photo: FreightWaves)

This fireside chat recap is from FreightWaves’ Fuel Buyers Summit on Wednesday.

FIRESIDE CHAT TOPIC: LCFS: Unlocking the mystery

DETAILS: The low-carbon fuel standard (LCFS) is a complicated carbon reduction initiative that impacts the fuels that suppliers produce and the prices and carbon intensity of those fuels. Megan Boutwell explains how the regulations work and the impacts on carriers, fuel distributors and refiners.

SPEAKER: Megan Boutwell is the VP of operations at Stillwater Associates.


BIO: Boutwell directs business operations and implements growth management within the company. As editor of the Stillwater publications and Stillwater’s LCFS Newsletter, Boutwell is responsible for developing and editing content on a wide range of transportation energy issues, including policy, logistics, mergers and acquisitions, and renewable energy markets.

KEY QUOTES FROM BOUTWELL:

“The LCFS, this is a fuel-neutral, market-based system that incentivizes the lowering of carbon intensity in fuels, so it’s not a mandate. It doesn’t demand that ethanol be blended into gasoline at a certain volume. What it does is it requires petroleum fuels producers to reduce the carbon intensity of their fuels either by buying renewable fuels and blending it into their gasoline and diesel, or by buying LCFS credits, which are generated by renewable fuels producers to offset their deficits.”

“It has actually reduced the carbon intensity of the transport fuel in California. The target for 2021 is reducing the carbon intensity of fuel by 8.5%. Those targets get more stringent every year. That also adds value to low-carbon fuels. The lower the carbon intensity of the fuel, the higher the value.”

“What we’ve seen over the past five or six years is this huge influx of renewable diesel and now demand for renewable diesel because it’s low-carbon, because of all of the LCFS and RFS incentives and biodiesel tax incentives, it is about the same price as you will see at the pump.”

Click here for more FreightWaves articles by Alyssa Sporrer.

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