Is CARB staff blocking reform at California’s clean transport program?

This is the final installment of a three-part series examining the controversies and conflicts surrounding the future of the California Air Resources Board’s Low Carbon Fuel Standard. Read Part 1 and Part 2.

For years, environmental groups, community activists and climate scientists have warned the California Air Resources Board that the state’s support for biofuels is not only enabling harmful air and water pollution but also runs a serious risk of undermining its mission of combating climate change.

Now, as the agency considers major changes to the Low Carbon Fuel Standard, which is California’s premiere policy mechanism for rewarding those fuels, some of CARB’s board members have asked the agency’s staff to take these criticisms to heart.

But according to critics, the CARB staff members in charge of the LCFS haven’t taken action on those concerns. Instead, they say, staff members appear to be withholding key information from the board and public alike ahead of a critical vote on the program’s future.

In a December report that proposed major changes to the 15-year-old LCFS program, CARB staff provided only one policy choice for the board to adopt or reject. Critics say that, despite skepticism from some board members, this plan would simply lock in favorable treatment for renewable diesel fuel and dairy farm biogas — two of the primary beneficiaries of the billions of dollars per year the clean-fuels program raises from fossil fuels sold in the state — for decades to come. That’s money they say should be going instead to electric vehicles, the true path to decarbonizing transportation in the state.

In the same December report, CARB staff rejected an alternative proposal from CARB’s Environmental Justice Advisory Committee, a group created to advise the board on environmental-justice issues. That proposal would curb the program’s reliance on renewable diesel and dairy biogas — a demand of communities bearing the health harms of living next door to polluting concentrated livestock operations and fuel refineries.

As it stands, CARB plans to hold one more meeting of its full board to address the future of the LCFS program — a voting meeting at which board members would be asked to either approve or reject the staff proposal, with no opportunity to dissect its details or propose changes.

But because the December proposal from CARB staff fails to adequately address the questions from board members, critics are pushing for another meeting that would give the board another chance to change or at least question the logic behind the staff’s proposal.

“It feels like the shots are being called behind the scenes,” said Sasan Saadat, a senior research and policy analyst at nonprofit advocacy group Earthjustice. ​“What we heard from the board was pretty unambiguously, ​‘We’d like to see this tightened up.’”

The CARB board’s pushback 

Saadat is referring to comments made by CARB board members during a September CARB meeting, which was held to provide all 16 members of the agency’s board an opportunity to discuss the complex issues underlying the effort to amend the LCFS.

At that meeting, several board members questioned why the staff proposal excluded a cap on renewable diesel proposed by environmental-justice advocates. The concept of capping the growth of what’s become the primary fuel in the program was first proposed by CARB staff in 2022 as a means of preventing it from flooding the LCFS market.

But along with this economic policy rationale, a growing body of research from nonprofit groups, universities and other sources indicates that renewable diesel, which can provide a climate benefit when produced from noncrop feedstocks like waste oils, will cause more climate harm than it solves if demand climbs too high. That’s because it can encourage higher production of soybean and palm oil, which can lead to deforestation in countries from Brazil to Indonesia.

“I think we all should be very concerned and make sure that this LCFS program does not directly or indirectly, or in any way, shape or form, incentivize those activities in tropical forests, because that would really be cutting off our noses to spite our face,” board member Hector De La Torre said at the September meeting.

De La Torre, one of the few current CARB board members who was involved in the launch of the LCFS program in 2009, also questioned why the staff has proposed to maintain the LCFS’ uniquely favorable treatment for methane captured from dairy herd manure lagoons through 2040.

That ​“negative carbon intensity” structure makes biogas from that politically powerful industry far more valuable as an offset for fossil fuel producers and sellers in the state than any other alternative fuel.

Critics of CARB’s treatment of dairy methane say the program is encouraging dairies to structure their operations in ways that increase methane emissions — such as concentrating manure in liquid lagoons that create more methane than other methods for managing animal waste — in a perverse response to the value that methane can bring them through the LCFS.

“The [carbon-intensity measure] for avoided methane, I would like to see that tightened up,” De La Torre said. ​“I understand the logic of why we do what we do, but I still think it is too generous.”

This treatment of dairy biogas is also increasingly untenable under current California law, said board member Gideon Kracov. SB 1383, a state law passed in 2016, mandates statewide methane emissions reductions of 40 percent below 2013 levels by 2030. Importantly, that law gave CARB the authority, for the first time, to extend methane emissions limits that were already in place for landfills, wastewater treatment plants and the state’s oil and gas industry to the state’s agricultural sector as well.

“We regulate every major source of methane and GHG emissions,” Kracov said. ​“But not the dairies. Instead, consumers pay them” through the costs that fuel refiners and sellers in the state must pay for LCFS credits that are added to the cost of gasoline and diesel fuel sold in the state.

SB 1383 gives CARB the authority to start regulating the agricultural sector in 2024. Kracov said he would like the board to issue a resolution directing staff to undertake that regulatory work this year. But CARB executive officer Steven Cliff said in the September meeting that the agency doesn’t ​“currently have a rule planned for 2024” to regulate the dairy industry’s methane emissions.

Board member Diane Takvorian also highlighted the potential conflict between SB 1383’s 2030 deadline for reducing methane emissions and the CARB staff’s proposal to lock in the existing dairy biogas treatment through 2040.

“I’m concerned about the responsibility of sending the signal that we want to continue that crediting for another 17 years and increase the economic dependence on this system,” she said. ​“We’ve talked about the need to phase it out, [and it] seems like there’s agreement there. It’s just about timing and how that would happen.”

Takvorian also said she’s ​“very concerned in terms of the impact on human health,” pointing to the well-documented problems of air and water pollution caused by the state’s increasingly large-scale dairy herds and manure lagoons. 

The particulate matter, methane and nitrogen oxide air pollution from concentrated livestock operations have been linked to higher rates of respiratory and cardiovascular disease. Most of the dairies earning LCFS credits are in California’s Central Valley, a region with high levels of poverty and some of the worst air quality in the state.

“Dairy digesters are a small portion of the LCFS, but it definitely has a large impact on communities struggling for clean air [and] communities of color,” board member Davina Hurt said.

In that September meeting, Takvorian pressed CARB staff for assurance that the Environmental Justice Advisory Committee’s alternative proposal would be placed on an equal footing with the staff’s proposal for options the board would be considering to amend the LCFS program.

“Will that be a clear alternative?” she asked. 

Matt Botill, division chief for CARB’s industrial strategies division, replied, ​“Yes.”

Expectations vs. reality 

Despite Botill’s assurance, that’s not what happened when the CARB staff released its proposal in December, critics say.

Instead, the proposal known as an ​“Initial Statement of Reasons” relegated the Environmental Justice Advisory Committee’s preferred proposal to an appendix of the document. In that appendix, an annotation added by the staff stated that the proposal to cap renewable diesel at current amounts and reduce the LCFS credit of dairy biogas ​“would produce fewer GHG emissions reductions, have worse health outcomes, have the highest costs of any scenario, and create significant LCFS regulatory non-compliance risks” by starving the program of credits for fossil fuel producers to offset their emissions.

Jeremy Martin, senior scientist and director of fuels policy at the Union of Concerned Scientists, disputed these critiques. The analysis released in December ​“leaves a lot to be desired and is much less transparent than in previous rules,” he said.

In its simplest form, he explained, CARB staff’s position is that ​“renewable diesel is cleaner than fossil diesel, so using more of it is good. I disagree with that.” (We covered the critiques of the CARB staff’s analysis in Part 1 and Part 2 of this series.)

As for dairy biogas, the CARB staff’s December proposal actually gives the sector an even longer runway to earn avoided-methane credits than the 2040 deadline discussed during the September board meeting, said Saadat of Earthjustice. At that meeting, ​“the board was really sharing views that aligned with the advocacy community,” he said. But ​“the proposal did not improve. In fact, in some cases, it got worse.”

It also appears to allow producers of hydrogen from fossil gas, which is a polluting and carbon-intensive process, to use those dairy biogas credits to continue to sell their hydrogen as ​“clean” for state transportation fuels through 2045 — a step that could undermine the state’s clean-hydrogen plans, said Tyler Lobdell, a staff attorney for advocacy group Food and Water Watch.

All told, CARB staff’s actions on the dairy biogas issue are ​“really at odds with several board members who…have expressed concern about environmental-justice impacts” of dairy biogas projects, he said. ​“There’s significant pressure on staff, and they’re willfully ignoring that pressure.” 

In an email, CARB spokesperson Dave Clegern noted that the agency has held 10 public workshops and meetings on the LCFS as well as two board meetings, one focused on the environmental-justice scenario and another focused on the staff proposal.

“These workshops and hearings were open to all, and staff and the board heard from a variety of voices,” he wrote. 

But critics say at least one more meeting is needed before the board votes on the program’s future.

Missing data, untested assertions — and high stakes

Last month, CARB postponed a hearing set for March 21 at which the full board would have voted on the LCFS amendments proposed by staff. Critics see this as a necessary first step for the board to address the multiple concerns raised with the staff’s current plan.

CARB staff has also scheduled a workshop in April to walk through topics related to ​“some of the concerns related to crop sustainability, among other areas,” Clegern told Canary Media. ​“This workshop is in recognition that concerns raised on these and other topics, including those by the [opposing] groups, would benefit from more public discussion and additional information from CARB.”

But this workshop won’t involve the full CARB board in discussions of vital interest to communities and industries that will be affected by it, critics say.

That’s why they’re calling on CARB to give the board a formal opportunity to intervene ahead of the vote and potentially to direct staff to make changes to the final plan that would align the program with the state’s climate goals.

“It feels as though this process has been extremely staff-driven with minimal board oversight and minimal opportunity for the board, the staff and stakeholders to engage,” said Saadat.

In the meantime, critics are also asking CARB staff to release data files that have so far been withheld from public review and to explain several new policy elements in the December proposal that have not yet been raised in public hearings or workshops.

“Staff made significant changes to the proposal at the last minute that were not discussed at workshops or informational Board hearings,” Jim Duffy, a 13-year veteran of the agency who served as branch chief of the LCFS program from 2019 to 2020, wrote in comments filed with CARB in February. ​“It is so important to provide stakeholders with the opportunity to convince Board members, as a group and in a public setting, to change course prior to the voting meeting. I strongly urge you not to shortcut this process.”

Duffy also wrote that CARB staff has been ​“surprisingly nontransparent in the amount of information included in the rulemaking materials, which is a change from prior LCFS rulemakings.”

That point was raised by the team of climate scientists that modeled the environmental-justice proposal. They noted that the staff has ​“declined to release” the underlying model inputs ​“upon which many of its conclusions are based.” Groups including Earthjustice, the Union of Concerned Scientists and the Stanford team have submitted formal requests for that data, to no avail, Saadat noted.

Critics say the lack of action from staff to address the concerns raised by board members at the September meeting indicates, at best, a disconnect between certain board members and the staff.

At worst, they say, it indicates that staff members are crafting policies that benefit the economic interests of fossil fuel and agriculture industry groups investing billions of dollars in renewable diesel and dairy biogas projects.

“CARB staff are behaving as if they are lobbyists in this process,” said Lobdell. ​“I’m used to captive agencies. This is the most egregious example I‘ve ever come across.”

In particular, environmental and community groups fear the billions of dollars flowing from oil and gas companies to the renewable diesel and dairy biogas industries are influencing CARB’s decisions.

A February report from nonprofit news organization CalMatters found that in 2023 Chevron and the Western States Petroleum Association trade group were two of the three biggest spenders on lobbying California lawmakers. Both of these entities are also eager to grow the market for biofuels in California.

“Crop-based renewable diesel has been shown, compared to petroleum diesel, to reduce life-cycle emissions in vehicles today,” Tanya DeRivi, the Western States Petroleum Association’s senior director of California climate and fuels, said at CARB’s September meeting. Any cap on renewable diesel, as being proposed by environmental groups, ​“will only slow the pace of emission reductions.”

Oil and gas companies are also investing billions in biogas projects at dairies and other concentrated livestock operations. In a February report, Food and Water Watch tracked multibillion-dollar investments by BP and Chevron into California dairy biogas projects and development companies such as Archaea Energy and California Bioenergy.

Biogas project developers, as well as dairy farmers themselves, argue that CARB’s avoided-methane credit structure is vital to provide the state’s dairy industry with the financial incentives needed to manage their otherwise unregulated methane emissions. Representatives of both groups made that case at CARB’s September board meeting, citing the pollution and climate improvements and economic opportunities the industry has brought to a part of the state with high levels of poverty and unemployment.

“California’s dairy methane reduction programs are all critical to achieving the ambitious 40 percent reduction sought by the state,” said Katie Little, who was at the time a policy advocate at the California Farm Bureau, which represents the state’s agriculture industry. ​“Removing one of the most effective programs is counterproductive.”

Critics also point out that two former LCFS program administrators have since left to become lobbyists at alternative fuel industry organizations the Coalition for Renewable Natural Gas and the Clean Fuels Alliance America — an indication of what they say are uncomfortably close ties between CARB staff and the industries the agency regulates.

CARB staff members ​“are public servants trying to clean the air and address climate pollution,” said Adrian Martinez, deputy managing attorney at nonprofit advocacy group Earthjustice. ​“I just think the industry has been effective at marginalizing the concerns of environmental and environmental-justice groups — and I think it’s misguided that some staff seem to have bought into that.”