Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
Eligibility. An entity that meets one or more of the following
criteria may opt into the LCFS program, thereby becoming a credit generator.
(1)
Opt-in Fuel Reporting
Entity. An entity meeting any of the following criteria can opt into
the LCFS program in a capacity of fuel reporting entity.
(A) A qualified fuel reporting entity who
provides a fuel specified in section
95482(b) that
meets the requirements of section
95483, wherever
applicable;
(B) An out-of-state
producer of oxygenate for blending with CARBOB or gasoline, or biomass-based
diesel for blending with CARB diesel, who is not otherwise already subject to
the LCFS regulation as an importer. An out-of-sate producer under this
subsection may retain the ability to generate credits or deficits, for a
specific quantity of fuel or blendstock, only if it opts in as a first fuel
reporting entity and meets the requirements of section
95483, wherever
applicable.
(C) An entity that is
in the distribution/marketing chain of imported fuel and is positioned on that
chain between the producer in subsection (B) above and the importer
("intermediate entity"). The intermediate entity is subject to the following
requirements.
The intermediate entity must provide written
documentation demonstrating all the following requirements to the Executive
Officer's written satisfaction before opting into the LCFS:
1. The entity received ownership of the fuel
for which the entity is claiming to generate LCFS credits;
2. Either:
a. The entity received the fuel reporting
entity status from a producer that opted in under section
95483.1; or
b. The producer did not opt in under section
95483.1(a)(1).
3. The entity actually delivered the fuel or
caused the fuel to be delivered to California for use in California;
The fuel delivered under subsection
3. is shown to have been sold for
use in California or was otherwise actually used in California;
and
4. The entity is not
otherwise already subject to the LCFS regulation as a fuel reporting
entity.
5. The demonstrations in
paragraphs 1. through 4. above must be made for the specific quantity of fuel
upon which the entity first elects to opt into the LCFS. For subsequent
quantities of fuel for which the entity is claiming to be the fuel reporting
entity pursuant to this subsection, the entity must retain documentation to
support the demonstrations required in paragraphs 1. through 4., above, and
must submit such documentation to the Executive Officer within 30 calendar days
upon request.
(2)
Project Operators. An
entity that has a project approved for crediting or is applying for approval by
the Executive Officer under section
95489 must apply to opt into the
LCFS program as a credit generator.
(3)
Clearing Service
Provider.
(A) An entity providing
clearing services in which it takes only a temporary possession of LCFS credits
for the purpose of clearing transactions between two entities with registered
accounts in LRT-CBTS, may apply to opt in as a clearing service provider if the
following conditions are met:
1. The eligible
entity must be a derivatives clearing organization as defined in the
Commodities Exchange Act (7
U.S.C §
1a (9)) that is
registered with the U.S. Commodity Futures Trading Commission pursuant to the
Commodities Exchange Act (7
U.S.C. §
7a-1(a)).
2. The entity must register in the LRT-CBTS
pursuant to section
95483.2(b).
3. The entity must be located in the United
States, according to the registration information reported pursuant to section
95483.2(b).
(B) A clearing service provider cannot own
credits but can hold LCFS credits up to five days for clearing purposes
only.
(b)
Opting in Procedure. The procedure for opting into and opting
out of the LCFS for such a person is set forth as follows.
(1) Opting into the LCFS program becomes
effective when the opt-in entity establishes an account in the LRT-CBTS,
pursuant to section
95483.2. The opt-in entity may not
report and generate credits and deficits based on transactions that precede the
quarter in which the entity opted in.
(2) Establishing an account in the LRT-CBTS
under subsection (b)(1) above means that the entity understands the
requirements of the LCFS regulation and has agreed to be subject to all the
requirements and provisions of the LCFS regulation.
(c)
Opting Out Procedure. An
opt-in entity may decide later to opt out of the LCFS program by following the
following procedure:
(1) For opt-out to be
effective, the opt-in entity must complete all actions specified below:
(A) Provide to the Executive Officer a 90-day
notice of intent to opt out and a proposed effective opt-out date;
(B) Submit in the LRT-CBTS any outstanding
quarterly fuel transactions or project reports up to the quarter in which the
effective opt-out date falls and a final annual compliance report (covering the
year through the opt-out date); and
(C) Identify in the 90-day notice any actions
to be taken to eliminate any remaining deficits by the effective opt-out
date.
(2)
Opt-Out
Approval. The Executive Officer shall notify the opt-in entity of the
final "approval" status of the opt-out request. Any credits that remain in the
opt-in entity's account at the time of the effective opt-out date shall be
forfeited and the opt-in entity's account in the LRT-CBTS shall be
closed.
1. New
section filed 11-16-2015; operative 1-1-2016 (Register 2015, No.
47).
2. Amendment of section heading and section filed 1-4-2019;
operative 1-4-2019 pursuant to Government Code section
11343.4(b)(3)
(Register 2019, No. 1).
Note: Authority cited: Sections
38510,
38530,
38560,
38560.5,
38571,
38580,
39600,
39601,
41510,
41511
and
43018,
Health and Safety Code; 42
U.S.C. section 7545; and Western Oil and Gas
Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121
Cal.Rptr. 249 (1975). Reference: Sections
38501,
38510,
39515,
39516,
38571,
38580,
39000,
39001,
39002,
39003,
39515,
39516,
41510,
41511
and
43000,
Health and Safety Code; Section
25000.5,
Public Resources Code; and Western Oil and Gas Ass'n v. Orange County Air
Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249
(1975).
