California bill would repeal Low Carbon Fuel Standard revision

A leading California state lawmaker is behind a bill to repeal a regulatory rule revision that is expected to significantly increase fuel costs for most highway users.

The California Air Resources Board voted 12-2 last month to adopt updates to the agency’s Low Carbon Fuel Standard regulations. The panel is appointed by the governor.

Low Carbon Fuel Standard

The Low Carbon Fuel Standard has been in place since 2011. The regulations are intended to encourage use of cleaner fuels with financial incentives as the state works to phase out gas and diesel and to achieve net-zero greenhouse gases by 2045.

Since implementation, the standard has called for reducing the climate impact of gas, diesel and other transportation fuels by 20% from 2010 to 2030.

On Nov. 8, CARB voted to boost the 2030 target to 30%.

The change will require California refiners to purchase more credits than they already were for exceeding the threshold allowance when making gas or diesel. The board previously estimated the pass-through costs to consumers next year would be 59 cents per gallon for diesel and 47 cents per gallon for gas.

CARB officials have since backed away from the estimate. In October, officials wrote that the analysis “should not be misconstrued as a prediction of the future credit price nor as a direct impact on prices at the pump.”

Californians already pay the highest gas prices in the nation, and Gavin Newsom’s political agenda is about to make them even higher.

I just introduced SB 2 to immediately repeal the Newsom Administration’s 65 cent gas price hike and put an end to their most recent price gouging…

— Brian W. Jones (@SenBrianJones) December 2, 2024

Senate Bill 2

Senate Minority Leader Brian Jones, R-San Diego, does not buy the reversal from the air board. He said the board’s action is a “direct assault” on Californians who will have costs passed onto them at the pump.

He highlighted a study published by the Kleinman Center for Energy Policy at the University of Pennsylvania that reports the regulations could increase fuel prices by 65 cents per gallon very quickly.

“This unelected group of wealthy bureaucrats, handpicked and directed by Gov. Newsom, is shamelessly increasing gas prices so Californians are forced into electric vehicles against their will,” Jones said in prepared remarks. “SB2 will stop their plan and keep costs stable for Californians.”

On the first day to file bills for consideration during the 2025 regular session, Jones filed legislation to repeal updates by CARB to the state’s Low Carbon Fuel Standard regulations. Every Senate Republican is listed as a bill co-sponsor.

Jones said the CARB updates will dramatically increase operating costs for companies producing fuel in the state as well as importers of oil and fuel and all other ancillary businesses in the fuel supply chain.

In an effort to prevent that from happening, SB2 would restore the Low Carbon Fuel Standard regulatory program to its status prior to the Nov. 8 vote and would void entirely the CARB updates.

“Californians already pay the highest gas prices in the nation, and Gavin Newsom’s political agenda is about to make them even higher,” Jones said in prepared remarks. “Our Day 1 priority is protecting Californians at the pump.”

The Senate bill awaits assignment to committee for the session that begins Jan. 6, 2025. The Assembly version, AB12, also awaits assignment to committee.

Day 1… Repeal the CARB gas tax https://t.co/zk220gajDI

— James Gallagher (@J_GallagherAD3) December 3, 2024

‘Largest additional burden’

Purchasing fuel in California has long been considered a steep expense for truck drivers and motorists.

One Golden State rule ties taxes on gas and diesel to annual inflation adjustments.

On July 1, the state raised the 57.9-cent excise tax collected on gas purchases by 1.7 cents per gallon to 59.6 cents. The 44.1-cent diesel rate increased by 1.3 cents per gallon to 45.4 cents.

California’s average diesel price is about $1.28 above the national average for a gallon of diesel fuel, according to ProMiles. AAA reports the state’s average gas price is about $1.35 above the national average for a gallon of regular gas.

The Tax Foundation has reported that the state places the “largest additional burden” on fuel prices in the nation via carbon taxes. California government agencies have estimated about 12 cents per gallon being passed through from the Low Carbon Fuel Standard. Additionally, the state’s cap-and-trade program results in another 27 cents per gallon being passed through to consumers. LL

More Land Line coverage of California news is available.