California Code of Regulations
Title 17 - Public Health
Division 3 - Air Resources
Chapter 1 - Air Resources Board
Subchapter 10 - Climate Change
Article 4 - Regulations to Achieve Greenhouse Gas Emission Reductions
Subarticle 7 - Low Carbon Fuel Standard
Section 95489 - Provisions for Petroleum-Based Fuels

(A) An Annual Crude Average carbon intensity value will be calculated for each calendar year using a volume-weighted average of crude carbon intensity values. The volume for each imported crude will be the total volume of that crude reported by all fuel reporting entities in the Annual Compliance Reports for the calendar year. Volume contributions for California State fields will be based on oil production data from the California Department of Conservation and volume contributions for California Federal Offshore fields will be based on oil production data from the Bureau of Safety and Environmental Enforcement. Field production volumes for California-produced crude will be reduced, if necessary, to account for crude exports. Crude carbon intensity values are those listed in Table 9. For crude names not listed, the default carbon intensity value from Table 9 will be used until the crude name and carbon intensity value is added to Table 9 as described in section 95489(b)(3).

(B) Within 15 days of receiving the Annual Compliance reports, the Executive Officer shall post the Annual Crude Average carbon intensity calculation at the LCFS web site for public comment. Written comments shall be accepted for 15 days following the date on which the analysis was posted. Only comments related to potential factual or methodological errors in the posted Annual Crude Average carbon intensity value may be considered. The Executive Officer shall evaluate the comments received and, if the Executive Officer deems it necessary, may request in writing additional information or clarification from the commenters. Commenters shall be provided 10 days to respond to these requests. The Executive Officer shall post the final Annual Crude Average carbon intensity value at the LCFS web site within 15 days of receiving positive or qualified positive MCON verification reports per section 95500. An adverse verification statement would result in Executive Officer investigation and may result in delay of finalizing and posting the Annual Crude Average carbon intensity value.

(C) Revisions to the OPGEE model, addition of crudes to Table 9, and updates to all carbon intensity values listed in Table 9 will be considered on a three-year cycle through proposed amendments of the Low Carbon Fuel Standard regulation.

(A) For the purpose of this section, an innovative method means crude production or transport using one or more of the following technologies:

(B) The innovative method must become operational no earlier than 2010 for solar steam and CCS projects or January 1, 2015, for any other innovative method above. Any project must be approved for use by the Executive Officer before generating credit under the LCFS regulation. Projects that utilize carbon capture and sequestration are subject to the provisions of section 95490.

No credits may be generated for any quarter preceding the quarter in which the application is approved.

(C) The project operator must initiate review of the opt-in project using the innovative method through a written application to the Executive Officer. If the innovative method involves steam, heat, or electricity produced by a third party and delivered to the crude oil producer or transporter, both the crude producer or transporter and the third party must apply and will be considered joint applicant project operator for approval of the innovative method. If more than one crude producer or transporter receives steam, heat, or electricity from a single third-party facility, each crude producer or transporter must submit an independent application with the third party as a joint applicant on each submittal. If the innovative method involves delivery of carbon captured by the crude oil producer or transporter to a third party to store the carbon, both the crude producer or transporter and the third party must apply and will be considered joint applicants for approval of the innovative method.

(D) A crude oil producer or transporter must register under section 95483.1 as an opt-in project operator to receive credits for an approved innovative method. The crude oil producer or transporter, through a written agreement, may elect to transfer the right to opt in for credit generation to the joint applicant. If neither the crude oil producer or transporter nor the joint applicant using an approved innovative method registers as an opt-in project operator, credits generated by the producer's or transporter's use of the innovative method may be claimed by California refinery(ies) that purchase the crude produced or transported using the innovative method if CARB receives all information it needs to ensure compliance with limitations and reporting requirements applied to the method.

(E) The innovative method must achieve one of the following threshold criteria:

(F) Credits for producing crude oil with innovative methods must be calculated as specified below:

For crude oil produced using solar steam generation:

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Where avoided emissions, as calculated using the OPGEE model assuming displacement of steam produced using a natural gas fired once through steam generator, are correlated with the steam quality as tabulated below:

For crude oil produced or transported using solar or wind based electricity:

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For crude oil produced or transported using any other innovative method listed in section 95489(c)(1)(A):

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where:

CreditsInnov(MT) means the amount of LCFS credits generated (a positive value), in metric tons, by the volume of a crude oil produced or transported using the innovative method and delivered to California refineries for processing;

Vsteam means the overall volume, in barrels cold water equivalent, of steam injected;

fsolar means the fraction of injected steam that is produced using solar;

Vcrudeproduced means the volume, in barrels, of crude oil produced or transported using the innovative method;

VInnov means the volume, in barrels, of crude oil produced or transported using the innovative method and delivered to California refineries for processing. If the crude produced or transported using the innovative method and delivered to California refineries is part of a blend, then VInnov is the volume of blend delivered to California refineries times the volume fraction of the crude within the blend that was produced or transported using the innovative method.

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Eelectricity means the overall electricity consumption to produce or transport the crude, in kW-hr;

frenew means the fraction of consumed electricity that is produced using qualifying solar or wind power;

[DELTA] CIInnov means the reduction in carbon intensity (a positive value), in gCO2e/MJcrude, associated with crude oil production or transport with the innovative method as compared to crude oil production or transport by a baseline process without the method (hereafter referred to as the comparison baseline method); and

EInnov means the energy density (lower heating value), in MJ/barrel, for the crude oil produced or transported with the innovative method.

(G) Renewable or low-CI energy sources listed in (A) that are used to generate LCFS credit for innovative crude may not also claim renewable energy certificates or other environmental attributes recognized or credited by any other jurisdiction or regulatory program, other than the market-based compliance mechanism set forth in title 17, California Code of Regulations Chapter 1, Subchapter 10, article 5 (commencing with section 95800).

(A) An applicant that submits any information or documentation in support of a proposed innovative method must include with the application a written statement clearly showing that the applicant understands and agrees to the following:

(B) An application must contain the following summary material:

(C) An application, except for solar-generated steam for crude oil production (45 percent steam quality or greater), wind-based electricity, or solar-based electricity, shall include a detailed description of the innovative method and its comparison baseline method. The description of innovative and comparison baseline methods can be limited to those portions of the crude production or transport process affected by the innovative method. The description of the innovative method and its comparison baseline method must include each of the following, to the extent each is applicable to the innovative method:

(D) An application, except for solar-generated steam for crude oil production (45 percent steam quality or greater), wind-based electricity, or solar-based electricity shall include descriptions of the life cycle assessments (LCAs) performed on the proposed innovative method and its comparison baseline method using the CARB OPGEE model or an alternative model or LCA methodology approved by the Executive Officer. Electronic copies of the models and calculations shall be provided with the application. The descriptions of the life cycle assessment results must include each of the following:

(E) An application shall include a list of references covering all information sources used in the preparation of the life cycle analysis and calculation of innovative method credit. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(F) An application shall include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual and/or intended long-term, steady-state operation of the innovative method described in the application packet. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(G) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).

(H) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(A) Within 30 calendar days of receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer shall advise the applicant in writing either that:

(B) After accepting an application as complete, the Executive Officer will post the application at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm. Public comments will be accepted for 10 days following the date on which the application was posted. Only comments related to potential factual or methodological errors may be considered. The Executive Officer will forward to the applicant all comments identifying potential factual or methodological errors. Within 30 days, the applicant shall either submit revisions to its application to the Executive Officer, or submit a detailed written response to the Executive Officer explaining why no revisions are necessary.

(C) The Executive Officer shall not approve an application if the Executive Officer determines, based upon the information submitted in the application and any other available information, that:

(D) As part of any action approving an application, the Executive Officer may prescribe conditions of the approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the innovative method. If the Executive Officer determines the application will not be approved, and the applicant will be notified in writing and the basis for the disapproval shall be identified.

(A) The volume (barrels) of crude oil produced or transported using the approved innovative method and the crude name(s) under which it is marketed.

(B) If the crude oil produced or transported with an approved innovative method is marketed as part of a crude blend that is not wholly refined in California, the name of the blend and the volume fraction that the crude produced with the innovative method contributes to the blend.

(C) For crude oil imported into California, documentation showing that the innovative crude was supplied to one or more California refinery and the volume (barrels) of innovative crude supplied to each California refinery. For crude oil produced in California, documentation showing the innovative crude was supplied to one or more California refinery, the total volume (barrels) of innovative crude supplied to California refineries, and the total volume (barrels) of innovative crude exported from California.

(D) For solar or wind electricity projects, the following additional recordkeeping and reporting will be required:

(E) For solar steam projects at crude oil production facilities, the following additional recordkeeping and reporting will be required:

(F) Any additional records that the Executive Officer requires to be kept in pursuant to section 95489(c)(3)(D), and records that demonstrate compliance with all special limitations and operating conditions specified pursuant to section 95489(c)(3)(D).

These records shall be submitted to the Executive Officer during the quarterly reporting period specified in section 95491(b).

(A) Modified Nelson Complexity Score

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where:

indexi is the 2012 Nelson Complexity Index listed in Table 10;

Capacityi is the capacity of each unit listed in Table 10 in barrels per day unless otherwise indicated;

Capacitydist is the capacity of the distillation unit in barrels per day;

i is the process unit; and

n is the total number of process units.

Table 10. Nelson Complexity Indices.

(B) Annual Energy Use

Annual Energy Use (in MMBtu) = fuel use + electricity + thermal

where:

fuel use is the MMBtu of all fuel combusted during the compliance period;

electricity is the imported electricity minus exported electricity per compliance period converted to MMBtu by using 3.142 MMBtu/MWh; and

thermal is the imported thermal energy minus exported thermal energy per compliance period in MMBtu.

(A) The volume of CARBOB and volume of diesel produced from crude oil;

(B) The volume of CARBOB and volume of diesel produced from transmix;

(C) The volume of CARBOB and volume of diesel produced from Petroleum Intermediate feedstocks; and

(D) The volume of CARBOB and volume of diesel purchased for blending.

(E) If CARBOB or diesel is produced from feedstock other than crude oil (volumes in (2)(B) through (D), above), a separate annual report with third-party verification is required for produced volumes of CARBOB and diesel from crude oil. The annual report must be submitted by March 31st and the verification statement is due August 31st.

(A) Carbon Intensity Adjustment. For volumes reported in section 95489(d)(2)(A) a non-transferable credit of 5.0 gCO2e/MJ will be generated.

(B) Credit Calculation. For CARBOB and diesel volumes reported in section 95489(d)(2)(A):

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(C) Credits created pursuant to section 95489(d) may not be sold or transferred to any other party.

(A) An application must contain the following summary material:

(B) An application must include a list of references covering all information sources used in the calculation of Low-Complexity/Low-Energy-Use Refinery Credits. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(C) An application must include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual operation of the refinery. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(D) An applicant that submits any information or documentation in support of a proposed Low-Complexity/Low-Energy-Use Refinery Credit must include a written statement clearly showing that the applicant understands and agrees that all information in the application not identified as confidential business information is subject to public disclosure pursuant to California Code of Regulations, title 17, sections 91000 through 91022 and the California Public Records Act (Government Code, §§ .6250 et seq.), and that information claimed by the applicant to be confidential might later be disclosed under section 91022 if the Board determines the information is subject to disclosure.

(E) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(F) If there is a change to an approved Low-Complexity/Low-Energy-Use Refinery which could impact the eligibility of the refinery, the refinery operator must notify the Executive Officer in writing within 30 business days after the material change has occurred, and the previously-approved application shall become invalid 30 business days after the material change has occurred.

(A) Confirmation of eligibility by the Executive Officer based on the refinery energy use verified under MRR annually.

(B) Receipt of a positive or qualified positive verification statement for the quarterly fuel transactions reported pursuant to section 95489(d)(2). An adverse verification statement would result in no credit issuance and Executive Officer investigation.

(A) The application for a refinery investment credit must be submitted during or after the year 2016 and must be approved pursuant to this section before the refinery can receive credit. A project is eligible if the project completion date is on January 1, 2016 or later.

(B) The refinery investment credit project must occur within the boundaries of the refinery, unless it involves carbon capture from hydrogen production. Sequestration sites for CCS do not need to be on-site at the refinery.

(C) The applicant must demonstrate that any net increases in criteria air pollutant or toxic air contaminant emissions from the refinery investment credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(D) The following project types are eligible for the refinery investment project credits:

(E) Credits must be pro-rated for years where the units within the project system boundary were non-operational. This pro-rating will consider the calendar days of operation relative to non-operation.

(F) Credits must be pro-rated if the hydrogen production facility that captures CO2 does not supply all of its hydrogen to the applicant refinery.

(G) Credits generated pursuant to section 95489(e)(1)(D)5. are subject to the following limitations:

(H) Projects that utilize carbon capture and sequestration are subject to the provisions of section 95490.

(A) For carbon capture and sequestration projects, determine the credit in accordance with the CCS protocol.

(B) For other refinery investment credit projects, determine the credit as follows:

(A) An application must contain the following summary material:

(B) An application must include a list of references covering all information sources used in the calculation of refinery investment credit. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(C) An application must include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual and/or intended long-term, steady-state operation of the refinery investment credit project described in the application packet. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(D) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).

(E) An application must include all relevant documentation identifying any changes, including decreases or increases, in criteria air pollutant or toxic air contaminant emissions based on local air permits and supporting permit documentation from the refinery investment credit project. An applicant must include a signed transmittal letter from the applicant attesting that any net increases in emissions from the refinery investment credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(F) An applicant that submits any information or documentation in support of a proposed refinery investment credit must include a written statement clearly showing that the applicant understands and agrees that all information in the application not identified as confidential business information is subject to public disclosure pursuant to California Code of Regulations, title 17, sections 91000 through 91022 and the California Public Records Act (Government Code, §§ .6250 et seq.), and that information claimed by the applicant to be confidential might later be disclosed under section 91022 if the Board determines the information is subject to disclosure.

(G) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(H) Applications for process improvement projects must be submitted on or before December 31, 2025.

(A) After receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer will advise the applicant in writing either that:

(B) After accepting an application as complete, the Executive Officer will post the application at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm. Public comments will be accepted for 10 calendar days following the date on which the application was posted. Only comments related to potential factual or methodological errors may be considered. The Executive Officer will forward to the applicant all comments identifying potential factual or methodological errors. Within 30 business days, the applicant must either submit revisions to its application to the Executive Officer, or submit a detailed written response to the Executive Officer explaining why no revisions are necessary.

(C) If the Executive Officer finds that an application meets the requirements set forth in section 95489(e), the Executive Officer will take final action to approve the refinery investment credit project. The Executive Officer may prescribe conditions of approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the project. If the Executive Officer finds that an application does not meet the requirements of section 95489(e), the application will not be approved, and the applicant will be notified in writing, and the basis for the disapproval will be identified.

(A) Upon the completion of reporting period in which a positive or qualified positive verification statement for the applicable Project Reports per section 95500(e) is received, the Executive Officer will determine the number of credits to be issued to the applicants. An adverse verification statement would result in no credit issuance and Executive Officer investigation.

(A) In order to receive a renewable hydrogen refinery credit, a refiner must produce CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen.

(B) The applicant must demonstrate that any net increases in criteria air pollutant or toxic air contaminant emissions from the renewable hydrogen refinery credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(A) For CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen produced from RNG that displaces fossil natural gas in a steam methane reforming unit, the calculation of credits generated quarterly or annually must be as follows:

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(B) For CARBOB or diesel fuel that is partially or wholly derived from renewable hydrogen produced from other production processes, such as electrolysis using renewable electricity or syngas from biomass gasification, the calculation of credits generated quarterly or annually must be as follows:

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(A) An application must contain the following summary material:

(B) An application must include a list of references covering all information sources used in the calculation of renewable hydrogen refinery credit project. The reference list must meet the requirements of section 95488.7(a)(2)(D).

(C) An application must include a signed transmittal letter from the applicant attesting under penalty of perjury under California law, to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual and/or intended long-term, steady-state operation of renewable hydrogen refinery credit project described in the application packet. The transmittal letter must meet the requirements of section 95488.8(a)(3)(A) through (D).

(D) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).

(E) An application must include all relevant documentation identifying any changes, including decreases or increases, in criteria air pollutant or toxic air contaminant emissions based on local air permits from the renewable hydrogen refinery credit project. An applicant must include a signed transmittal letter from the applicant attesting that any net increases in emissions from renewable hydrogen refinery credit project are mitigated in accordance with all local, state, and national environmental and health and safety regulations.

(F) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

(A) Within 30 calendar days of receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer will advise the applicant in writing either that:

(B) If the Executive Officer finds that an application meets the requirements set forth in section 95489(f), the Executive Officer will take final action to approve the renewable hydrogen refinery credit project. The Executive Officer may prescribe conditions of approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the project. If the Executive Officer finds that an application does not meet the requirements of section 95489(f), the application will not be approved, and the applicant will be notified in writing, and the basis for the disapproval will be identified.

(A) Upon the completion of reporting period in which a positive or qualified positive verification statement for the applicable Project Reports per section 95500(e) is received, the Executive Officer will determine the number of credits to be issued to the applicants. An adverse verification statement would result in no credit issuance and Executive Officer investigation.