Recap: Clean Fuels Standard webinar

On May 13th, in partnership with the Clean Fuels NY Coalition, we held a policy forum on instituting a Clean Fuel Standard (CFS) for New York. NYLCV President Julie Tighe kicked off the forum and spoke about the challenge of reducing transportation emissions, responsible for one-third of our greenhouse gas emissions, and the number one contributor to climate change in our state and nation. Cleaning up the transportation sector will require incentives and cost money. Tighe went on to express that the fossil fuel industry is responsible for our climate crisis and now they need to pay to get us out of it. A CFS would help just that: transform the fuels market from one that relies nearly exclusively on petroleum to one that employs a variety of cleaner alternatives, including electricity.

The first speaker at the forum was Washington State Senator Rebecca Saldaña, who discussed her state’s implementation of a CFS. She talked about how the legislation got passed, mentioning that it is the key pollution reduction policy for Governor Jay Inslee. She also talked about how the state has a lot of potential for hydropower. Much of the remaining pollution in the state is in the transportation sector, and the policy is necessary to rectify the health disparities which were a consequence of pollution. The Washington CFS applies not only to cars but also has an opt-in provision for maritime, jet fuel, and heavy-duty freight, making an even greater impact on emissions reduction.

To pass the bill, Saldaña had to overcome the oil lobby, mainstream business lobby, transportation chairs, and building trades, who opposed the CFS. She also mentioned the need to ensure that prices at the pump would not increase for low-income and historically marginalized residents, who rely on their cars for their livelihoods. These prices are mitigated through money from the state’s Climate Commitment Bill. Saldaña also highlighted the policy’s benefit of reducing harmful diesel particulate matter in environmental justice communities. 

The virtual event continued with a panel discussion: 

Tim Cortes is the Chief Technology Officer at Plug Power, which he described as a leader in hydrogen fuel cell technologies. He went into more detail about what his company is doing and talked about the prevalence of hydrogen fuel cells nationwide. Plug Power will now generate green hydrogen in five locations across the United States, including one in Western NY. In California, the low carbon fuels standard has allowed low carbon fuels to become more competitive with fossil fuels from a market standpoint. He also said that New York can take lessons from the implementation of the policy in other states and stressed that we should pass a CFS soon.

Cortes added that policies like the CFS would help drive the adoption of hydrogen as a fuel. A hydrogen economy could generate $750 billion in revenue and 3.4 million jobs created by 2050. Every energy solution needs to be scaled up to meet demand and lower cost, and a CFS would help achieve that increase in scale. Later, Cortes said that he believes that programs like a fuels standard would help drive down the cost of hydrogen as a fuel overall. Plug Power currently employs 400 people and is seeing increasing demand for its products even during the pandemic. A CFS would serve to bolster that growth. Cortes said that diversifying our energy sources will help when a crisis arises.

Ben Mandel is the Northeast Regional Director at Calstart. He described Calstart as a national nonprofit clean transportation technology consortium, which exists for the advancement of clean mobility solutions that drastically reduce emissions. He said that many of the right pieces for emissions reduction are already in place in NY State, but that a CFS would allow things to really take off. Mandel said that a CFS is a program to establish a declining standard for the carbon intensity of fuels used throughout NY. This will generate credits for fuels less carbon-intensive than the standard (i.e. biofuels, electricity, hydrogen) and deficits for fuels more carbon-intensive than the standard. Thus, a market is set up where generators in deficit purchase credit from credit generators, creating revenues that can either be reinvested in the transportation system or reduce the net cost of clean fuels.

In California, the fuel standard has been in effect since 2011, said Mandel. As of now, California is primed for a 20 percent reduction in the carbon intensity of transportation fuels by 2030. Mandel emphasized that a clean fuel standard would effectively monetize the low carbon attributes of clean fuels for vehicle fleets, using the “California Clean Fuel Reward” incentive as an example. In New York, billions of dollars would be invested if a CFS is implemented. Mandel said that cleaner liquid fuels are easy to implement, but the transition to electricity will require costly, but worthwhile, infrastructure improvements. A CFS would help offset the costs of converting fleets to zero-emission vehicles by creating operating revenues for such fleets. For example, implementing California’s CFS would accelerate the payback period of a battery electric medium-duty delivery truck traveling 100 miles per day in New York State from 8 years to 5 years. The total cost of ownership over a 10-12 year service life would decrease by $100,000. Mandel later added that utility ratepayers should not see any cost increases and if anything, actually experience savings from greater utilization of electric system assets. In response to a question on the environmental justice benefits of a CFS, Mandel said that it would allow us to make moving to cleaner fuels economically viable, bringing air quality improvements sooner.

Shelby Neal is the Vice President for Renewables and Energy Policy at Darling Ingredients, a global company focused on sustainable solutions. The business focuses on cooking oil collection and has a large investment in a renewable diesel processing facility. He said that emissions reductions do not only reduce the presence of greenhouse gases, but also other harmful pollutants. Neal added that a CFS would have the most benefit near ports, airports, and high traffic areas (which are often located near low-income and predominantly minority communities). As a result, a CFS would have tremendous public health benefits. 

Neal later explained that the free market does not work for fuels because there are a few big companies that control everything in the market and only sell fossil fuels. The CFS will raise money for electrification and force the big companies to sell fuels other than petroleum. Neal also cited the fact that California, which has a CFS, has seen stable fuel prices. Regarding biodiesel, Neal mentioned that it is actually cheaper than regular diesel. Darling Ingredients employs 122 people in the state, which, Neal points out, is 122 more than the petroleum companies. He added that companies will relocate to states with a CFS, using California as an example. Neal said that a CFS is the only way to incentivize emissions reductions for things like airplanes. To illustrate the benefits of emissions reductions, Neal cited a nationwide study that found that there were 203,000 fewer asthma attacks and around 1,100 fewer cases of cancer in communities that replaced petroleum with alternative fuels. In response to a different question, Neal said that a CFS would help mitigate the effects of something like the recent pipeline hack, citing the use of biodiesel during Hurricane Sandy.

State Senator Kevin Parker, the sponsor of the CFS bill, joined the meeting to stress that it’s good that as a state we understand that climate change is a real threat, but now we need people to work together to fight climate change. The first step to decarbonizing the vehicles in New York State is to create an economic incentive to do so, which a low carbon fuel standard accomplishes. The standard will help us accomplish our ultimate zero-emissions vehicle objectives by setting intermediate goals. 

Assemblywoman Carrie Woerner, the sponsor of the CFS bill in the Assembly, closed out the event with some remarks. She said that she started looking into a low carbon fuel standard a couple of years ago, and has realized that such legislation drives mainstream adoption of clean energy technology. The legislation, in Woerner’s words, “fosters innovation.” She added that fossil fuels will not last forever and that a low carbon fuel standard will help transition the economy to renewable sources of energy in addition to the public health and environmental benefits already discussed. She said she looks forward to getting the legislation over the finish line this year.