POTENTIAL REGIONAL CLEAN FUEL STANDARD. November 15, 2018 Public Forum

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1 POTENTIAL REGIONAL CLEAN FUEL STANDARD November 15, 2018 Public Forum

2 PRESENTATION OUTLINE Agency Mission and Targets Clean Fuel Standard Overview Clean Fuel Examples and Carbon Intensity Expected Results and Impacts Next Steps

3 OUR MISSION OUR JURISDICTION We work to protect public health, improve neighborhood air quality, and reduce our region s contribution to climate change.

4 OUR GHG TARGETS Our target is to reduce greenhouse gas (GHG) emissions to: 50% below 1990 levels by % below 1990 levels by 2050

5 GHG SOURCES Transportation is the primary source of air and climate pollution in the Puget Sound region GHG EMISSIONS

6 WHY A CLEAN FUEL STANDARD? Largest impact on GHGs of actions considered High certainty of emissions reductions Air quality benefits

7 WHAT IS A CLEAN FUEL STANDARD? A progressively stronger standard for GHG emissions from transportation fuels Fuels above/below GHG target generate deficits/credits Typically applies to importers and producers Producers can buy credits to meet annual target

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12 A CLEAN FUEL STANDARD WOULD: Provide certainty for GHG reductions Allow market to find best solutions Have largest impact of all known options Improve air quality and public health

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14 TODAY S CLEANER (LOW CARBON) FUELS Biodiesel & renewable diesel Vegetable oils, waste oils Less particle pollution Electricity No tailpipe pollution Inexpensive: 2-3 per mile Ethanol made from corn, sugar crops Renewable natural gas Landfills, wastewater Can replace diesel

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17 RANGE OF CARBON INTENSITIES Carbon intensity range of California s current pathways Source: California Air Resources Board

18 RANGE OF CARBON INTENSITIES Carbon intensity range of California s current pathways Source: California Air Resources Board

19 EXAMPLE CLEAN FUEL STANDARD TARGETS = deficit any pathway above the target generates a deficit Each year, distributers meet target with combination of deficits and credits = credit any pathway below the target generates a credit

20 CALIFORNIA S LOW CARBON FUEL STANDARD

21 RESULTS AND IMPACTS What are the real-world results and expected impacts of a clean fuel standard? GHG Emission Reduction Public Health and Equity Fuel Price Impacts High-Level Economics

22 RESULTS AND IMPACTS What are the real-world results and expected impacts of a clean fuel standard? GHG Emission Reduction Public Health and Equity Fuel Price Impacts High-Level Economics

23 PUBLIC HEALTH + EQUITY Near-road communities benefit the most from reducing transportation pollution Low-income communities and people of color live closest to major roadways Health risk is highest in near-road communities Diesel = the largest potential cancer risk from air toxics in our region Also contributes to other health risks

24 FUEL PRICE IMPACTS Long-term benefit vs. near-term cost shift Standard adds cost to fossil fuels, decreases cost to cleaner fuels Washington State 2014 projection: could reach 9-14 /gal. in 10 years (with a 10% CI reduction target)

25 FUEL PRICE IMPACTS 50% of pump price goes to crude oil producers (world market) Crude portion varies greatly with no benefit to local economy, air quality, or climate

26 US GAS PRICE DRIVEN BY CRUDE OIL Source: EIA.

27 US GAS PRICE DRIVEN BY CRUDE OIL Source: EIA.

28 WA S FUEL PRICES OVER THE PAST YEAR about $0.50 per gallon in last 12 months

29 HIGH-LEVEL ECONOMIC IMPACTS Less fossil fuels imported to the state Distributors mix-in locally produced fuel In-state agriculture expands More in-state processing capacity

30 HIGH-LEVEL ECONOMIC IMPACTS More fuel spending stays in-state Small increase in gas and diesel prices Clean biofuels cheaper Increased EV charging infrastructure

31 SUMMARY A Clean Fuel Standard: Serves our Agency mission and goals Provides certainty for GHG reductions Monetizes and incentivizes improvement Uses market to find best fuels and pathways and to keep improving them Improves air quality and public health Especially for those most impacted

32 NEXT STEPS With consultant, we will be analyzing a regional clean fuel standard: Potential for fuels and feedstocks Economic and air quality impacts Equity Staff will summarize all input and share with Board in December for their consideration moving forward

33 THANK YOU! Feedback? Input for the Agency s Board must be received by Nov. 21 Phil Swartzendruber, Ph.D. or Linda Lyshall, Ph.D