Introduction: The California Air Resources Board (CARB) has recently issued a notice regarding the disapproval of amendments to the Low Carbon Fuel Standard (LCFS) Regulation by the Office of Administrative Law (OAL). This decision has significant implications for market participants and the public. In this blog post, we will provide an overview of the notice, its impact on the market, and the next steps for CARB.

Overview of the Notice: On February 18, 2025, the OAL disapproved the amendments to the LCFS Regulation that CARB had approved for adoption at a hearing on November 8, 2024[1]. The OAL identified inconsistencies with the clarity standard in Government Code section 11349(c) as the reason for the disapproval[1]. CARB plans to address these concerns and resubmit the amendments within 120 days[1].

Impact on the Market: The disapproval of the LCFS amendments has already had a noticeable impact on the market. According to recent reports, the market experienced a significant drop, with prices falling by $17. This decline reflects the uncertainty and potential challenges that market participants may face as CARB works to address the issues raised by the OAL.

Next Steps for CARB:CARB will continue to implement the current version of the LCFS Regulation, which has been in effect since July 2020, while addressing the concerns raised by the OAL[1]. CARB staff plan to rewrite and resubmit the amendments, incorporating any necessary grammatical and non-substantial changes[1]. Any substantive modifications will be released for public comment, ensuring transparency and stakeholder engagement throughout the process[1].

Conclusion: The recent notice from CARB highlights the ongoing efforts to refine and improve the LCFS Regulation. While the disapproval of the amendments presents challenges, it also provides an opportunity for CARB to address concerns and strengthen the regulation. We will continue to monitor the situation and provide updates as more information becomes available. It is unclear at this point if it will effect the implementation for the 2025 CI Changes.

Call to Action: If you have any questions or need assistance, please feel free to contact our team at SRECTrade.

References

[1] Information Regarding Low Carbon Fuel Standard Regulation Updates