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Court upholds California’s fuel standard

September 18, 2013

SAN FRANCISCO (AP) — A panel of federal judges on Wednesday upheld California’s first-in-the-U.S. mandate requiring fuels producers to reduce greenhouse gas emissions.

A three-judge panel of the 9th U.S. Circuit Court of Appeals on Wednesday rejected arguments from fuel makers that California’s “Low Carbon Fuel Standard” discriminated against out-of-state producers.

The ruling reverses a U.S. District Court ruling in favor of the plaintiffs, and removes an injunction that at one point halted implementation of the law.

The California Air Resources Board, the agency in charge of implementing the standard, appealed, and was able to continue implementing the law while the case was being heard.

The low carbon fuel standard is a key piece of California’s landmark global warming law, AB 32, and is meant to cut the state’s dependence on petroleum by 20 percent and account for one-tenth of the state’s goal to cut greenhouse gas emissions to 1990 levels by 2020.

“This is a very good step for Californians and the fight against climate change,” Dave Clegern, a spokesman for the board, said in an email.

“We are pleased, on behalf of the people of California and its environment, that the Court recognized the importance of this program and that the (standard) remains in effect.”

A lead attorney for the plaintiffs was traveling and not available for comment.

Fuels companies had argued that the standard discriminated against imports from out-of-state by relying on a “carbon intensity score.”

The scores measure pollution from a fuel’s entire life cycle — such as the type of electricity used to produce it or the fuel used to make it and transport it to California — not just when it is burned in a vehicle.

Out-of-state refiners and ethanol companies argued that transportation of the fuels into California alone raised their scores, making them less competitive with in-state produced fuels. They argued the law violated the commerce clause of the U.S. Constitution by imposing limits on interstate commerce.

U.S. District Court Judge Lawrence O’Neill in Fresno had agreed with the fuels companies, and halted implementation of the new law.

But 9th Circuit Judge Ronald Gould, who wrote the opinion, said the state’s standard provided fuel makers with avenues like credits to comply with the requirements and get their fuels to market.

He also wrote ethanol made in-state does not ensure a lower carbon intensity score than ethanol made elsewhere.

“California ethanol produces the most transportation emissions because California grows no corn for ethanol, so its producers import raw corn, which is bulkier and heavier than the refined ethanol shipped by producers in Brazil and the Midwest,” Gould wrote.

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