Then In 2009, the California Air Resources Board (CARB) adopted the Low Carbon Fuel Standard (LCFS) program. The program, implemented and enforced since the beginning of 2011, is a performance-based regulation enacted to meet the statewide reductions in greenhouse gas emissions (GHG) specified by California’s Global Warming Solutions Act of 2006.
Finally, in January 2012, California launched a refined cap-and-trade program with enforceable compliance obligations in 2013. This program makes a grand leap towards California’s ability to meet their ultimate goal of reducing GHG emissions to 1990 levels by the year 2020 and an 80% reduction from 1990 levels by 2050.
The cap-and-trade program is a flexible market-based standard implemented using a system of credits and deficits. Transportation fuels that have higher carbon intensity values than the compliance schedule yield deficits. Fuels that have lower carbon intensity values generate credits. Regulated parties are required to have a net zero balance of credits and deficits annually. Credits can be banked and traded without limitations. Credits do not lose value.
Credits and deficits are calculated and expressed as metric tons of CO2 equivalent. Each credit represents 1 metric ton of carbon dioxide and only carbon offset credits issued by California Air Resources Board (CARB) are considered compliance offset credits.
The following five-step process adopted by the State of Oregon determines the amount of carbon credits or deficits due a regulated entity. The process is in two parts: an explanation of the “Methodology” used to determine credits or deficits and an example “Calculation” using the output of a theoretical hydrogen fueling station.
Step 1: Calculate the number of megajoules (MJ) of energy in the fuel sold
Because different liquid fuels have different energy densities, or are in non-liquid form, we cannot just use the volume of fuel in gallons. To put all of the liquid and non-liquid fuels on equal footing, megajoules are used instead of gallons, kilograms (kg), standard cubic feet (scf), or kilowatt-hours (KWh). Table 1 gives the energy densities in megajoules per unit of fuel used to calculate the number of megajoules of energy in the fuel sold.
Step 2: Account for energy economy ratios, if necessary
Different types of vehicles use the energy in fuel more or less efficiently. For example, on average, an electric car will go three times farther than a gasoline vehicle on the same number of megajoules, while a heavy duty natural gas vehicle will go only 90 percent as far as a diesel heavy duty vehicle on the same number of megajoules. The Energy Economy Ratios (EERs) are used to adjust credits taking these differences into account. Table 2 shows California’s table of EERs for various fuels. You can see that for some fuels, such as gasoline, E85, diesel or biomass based diesel, the EER is 1.0, and the adjustment is unnecessary.
Step 3: Calculate the difference in the carbon intensity between the low carbon fuel standard and the fuel sold
Comparing the low carbon fuel standard for the year in question to the carbon intensity of a given fuel will tell us whether selling the fuel will generate credits or deficits, and will indicate whether selling the fuel will generate a relatively large or small number of credits or deficits. Table 3 gives the energy density of hydrogen.
Step 4: Calculate the credits/deficits in grams of CO2 equivalent
Credits and deficits are expressed in volumes of greenhouse gas emissions, where credits show the emissions “saved” by selling a low carbon fuel compared to selling a fuel that exactly meets the low carbon fuel standard for that year. Deficits, by comparison, show the “excess” emissions incurred by selling a fuel whose carbon intensity is higher than the low carbon fuel standard, compared to selling a fuel that exactly meets the standard for that year. In this step, emissions are calculated in grams of CO2 equivalent, while in the next step emissions are converted into metric tons of CO2 equivalent. CO2 equivalent, or CO2E, is a unit of measurement that combines CO2 and other greenhouse gases like methane and nitrous oxide into one number. It describes, for a given mixture and amount of greenhouse gases, the amount of CO2 that would have the same global warming potential.
Step 5: Convert the grams of CO2 equivalent into metric tons of CO2 equivalent
Greenhouse gas emissions are most commonly expressed in metric ton units. There are 1,000,000 grams per metric ton (g/metric ton), so the final step in the calculation is to divide the result from step 4 by 1,000,000.
The following two calculations of Carbon Credits and Deficits are theoretical and for demonstration purposes only. Credits or Defects is a direct consequent of the State law covering its carbon cap-and-trade program, should one even exist. Entities stated in these calculations maybe exempt from the program and not liable for their carbon emissions.
Calculation: Hydrogen Fuel Credits
This calculation assumes a fueling station owner sells 255,500 kg of hydrogen per year, a H2 carbon intensity of 76.10 gCO2E/MJ (produced from on site reforming with renewable feedstock), Table 3, and a State carbon fuel standard is 91.31 gCO2E/MJ.
In this example, it’s estimated the station serviced 1,278 FCEV during the year; each car goes an average 12,000 miles per year at an average range of 60 miles per kg of hydrogen:
1,278 FCEV = [(255,500 kg per yr. x 60 miles per kg) / 12,000 miles per yr.].
On a per car basis, 1,073 carbon credits equates to approximately 0.8 credits per car:
0.8 credits per car = (1,073 credits / 1,278 FCEV).
A regulated hydrogen gas station owner only accrues credits, should credits be available, when pumping hydrogen produced on-site reforming with renewable feedstock. Only in this case is the CI of the alternate fuel less than the state standard, i.e., 76.10 versus 91.31, Table 3.
All other methods to produce hydrogen have CI values higher than the state standard, Table 3. These methods include; compressed H2 gas from central reforming of natural gas (NG), liquid H2 from central reforming of NG, and compressed H2 from on-site reforming of NG. See California’s Intensity Lookup Table for Gasoline and fuels that Substitute for Gasoline for a comprehensive list of Cl values for gasoline and a host of alternate fuels.
Looking at all possible scenarios, the impact of the State CI standard is:
- Credit Situation: CI of Alternative Fuel is lower that the State’s CI Standard
- A higher State standard would generate more carbon credits.
- A lower State standard could turn the credit into a deficit situation.
- Deficit Situation: CI of Alternative Fuel is higher that the State’s CI Standard
- A higher State standard could turn the deficit into credit situation.
- A lower the State standard would generate more carbon deficits.
Furthermore, the number of credits or deficits accrued derives from the quantity of alternative fuel supplied; gallons, kg or kWh, Step 1. Regardless of the CI value, if the alternative fuel is more efficient than gasoline than either more credits or less deficits will accrue
Moving over to EVs for a comparative credit of deficit assessment, the Tesla Model S serves as the quintessential example for consumer appeal and range, miles per charge. A Model S fitted with an 85 KWh battery requires around 93.5 kWh of electricity to charge from 0% to 100%, including on-board charger losses of about 10%. Tesla claims an estimated range of 300 miles at 55 MPH with the 85 kWh battery.
Calculation: Tesla Model S EV
This calculation assumes an owner of one Tesla Model S using uses 3,740 kWh of electricity to go 12,000 during the year with an average range of 300 miles per charge and 93.5 kWh per charge:
3,740 kWh = [(12,000 miles per yr. / 300 miles per charge) x 93.5 kW/h per charge].
Other input values include, 104.71 gCO2E/MJ (California marginal electricity mix of natural gas and renewable energy sources, Table 4) and a State carbon fuel standard of 91.31 gCO2E/MJ.
On a per car basis, 1,073 carbon credits equates to approximately 0.8 credits per car:
0.8 = (1,073 credits / 1,278 FCEV).
The following calculation of credits or deficits results in (-0.5) metric tons of CO2 per car per year. Because this number is negative, it is a deficit. The regulated facility producing that electricity would need to purchase credits to cover the deficit, or use banked credits from previous years.
Infrastructure remains the Achilles heel of FCEV and most other alternate fueled vehicles. As of September 2013, about 208 hydrogen fueling stations are operational worldwide; 80 in Europe, 76 in North America (55 in U.S.), 49 in Asia, and 3 the rest of the world according to FuelCellToday
As a point of reference, statistics from the U.S. Census Bureau show 121,446 gasoline and diesel fueling stations in the U.S. Navigant Research reports about 64,000 publicly accessible charging stations worldwide. While the U.S. Department of Energy records 21,669 public and private electric station.
Furthermore, by year-end 2012, NGV Global counts 21,292 natural gas fueling (NGV) stations worldwide. The U.S. Department of Energy identifies 1,345 public and private NGV fueling stations in the U.S., Table 5.