Agency issues more than three-quarters of a
million dollars in fines & penalties
Three
energy companies have agreed to fines totaling $785,000 following
investigations by the California Air Resources Board (CARB). All three
companies violated provisions of the Low Carbon Fuel Standard (LCFS), which is
a critical part of California’s greenhouse gas (GHG) reduction efforts.
“The
Low Carbon Fuel Standard is critical to California’s effort to fight the worst
impacts of climate change, achieve its mandated GHG reductions, and to provide
consumers with more clean fuel choices” said CARB Executive Officer Richard
Corey. “It is not a new regulation and there is no good reason for compliance
failures.”
- SK Energy Americas agreed to a $395,000 penalty for failure to meet the carbon
intensity target for 2014.
- Alon USA and subsidiary, Paramount Petroleum have agreed to pay a $300,000
civil judgment for failure to accurately report fuel transactions.
- Kern Oil & Refining agreed to a penalty of $90,000 and forfeiture of 15,838
LCFS credits for misreporting the type of low carbon fuel it sold (These
credits are currently worth nearly two million dollars.)
CARB
first approved the LCFS in 2010 with compliance starting in 2011. The LCFS
requires that companies producing fuel for use in California lower the carbon
in their production process 10 percent by 2020.
The
regulation requires that fuel suppliers meet, on an annual basis, a clean fuel
target for the vehicle fuels they sell in California. If an individual fuel
they supply is below that annual target its carbon emissions are lower and it
generates marketable credits for the producer; fuels above that number generate
deficits. If producers are unable to supply enough low-carbon fuels in a year
to meet the annual target, they must acquire credits from other fuel suppliers
in the marketplace to make up the deficit. SK Energy Americas agreed to pay the
$395,000 penalty because it failed to cover its deficit in 2014.
All
producers are required to accurately report the types of fuel produced for sale
in California and transactions for sale of that fuel. CARB took Alon and
Paramount to court for their failure to accurately report its sales. Kern Oil
was fined for inaccurate reporting of fuel type, and in addition to the fine
CARB invalidated the credits associated with the misreported batches of fuel.
The
LCFS is a tool critical to achieving California’s 2020 GHG emission reduction
goal of a return to 1990 levels. It will also be important in reaching the
legislatively mandated 2030 reduction goal of 40 percent below 1990 levels and
2050 target of reductions 40 percent below 2030 levels.
CARB
is amending the LCFS starting in 2021 to require fuel producers to reduce
emissions an additional 20 percent by 2030. The amendments will also bring more
alternative fuels, such as jet fuels, into the program, and add a third-party
verification program. Another amendment will create a variety of credits and
partial credits for electric vehicle electrification to promote development of
electric vehicle infrastructure called for in Governor Brown’s Executive Order
B-48-18.
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