News Briefs | 04.24.17

California State Appeals Court Upholds Cap-and-Trade Program

On April 6, the Third District Court of Appeal in Sacramento upheld CARB’s cap-and-trade program through at least 2020, ruling in a 2–1 decision that auction sales are not the same as a tax. The court said that the purchase of pollution credits by businesses is voluntary and the credits are “a thing of value.” According to the Sacramento Bee, Justice Elena J. Duarte wrote for the majority, “These twin aspects of the auction system, voluntary participation and purchase of a specific thing of value, preclude finding that the auction system has the hallmarks of a tax.”

The tax issue was key because the plaintiffs—the California Chamber of Commerce and Woodland-based tomato processor Morning Star—had argued that cap-and-trade amounted to a tax but was not passed by two-thirds of the Legislature as the state constitution requires for taxes. CARB Chair Mary Nichols stated that “the decision provides additional certainty for this keystone program, which supports all the other approaches California has under way to fight climate change.” The decision is a victory for Gov. Jerry Brown and the legislators who are developing a package to extend the cap-and-trade program beyond 2020.

Court Largely Upholds LCFS, Requires More Analysis of Biodiesel

CARB can continue to enforce most aspects of the Low Carbon Fuel Standard, but must analyze and report on the regulation’s effect on NOx emissions, and address mitigation measures if necessary. That’s the result of an April 10 ruling by Judge Brad R. Hill in California’s Fifth District Court of Appeal on a lawsuit filed against CARB by POET, a South Dakota–based ethanol producer. POET has been seeking to overturn the LCFS since 2013.

The court found that CARB had failed to comply with the California Environmental Quality Act (CEQA) requirement that it analyze how the LCFS would affect NOx emissions from biodiesel fuels. But the court agreed with CARB that provisions related to conventional diesel fuel and its substitutes can be separated from the rest of the LCFS, allowing the other regulations to continue according to the existing schedule. In addition, the court declined to throw out or strike text from the diesel and biodiesel provisions, or to return the standards to 2013 levels. Instead, the court froze the carbon intensity targets for those fuels at 2017 levels for now. Judge Hill also preserved the 2015 Alternative Diesel Fuels (ADF) regulations, which were adopted to counteract the effects of NOx emissions from increased use of biodiesel.

The ruling directs CARB to analyze whether the implementation of LCFS rules may have caused an increase in NOx emissions, using a baseline no later than 2010, and whether it is likely to do so in the future.

CEC Approves the 2017­–18 AB 118 Investment Plan Update

The CEC voted on April 12 to approve the 2017­–18 Investment Plan Update for the Alternative and Renewable Fuel and Vehicle Technology Program. The program is now required to fund its support costs from motor vehicle registration fees instead of commercial and residential utility surcharges, a change mandated by last year’s SB 20. The law predicted that the program would receive about $100 million per year from its $2 slice of each vehicle registration fee, but if this year’s budget proposal is approved, the program will receive $97.2 million instead. The CEC spread the $2.8 million decrease equally across funding allocations, reducing each area by 2.8 percent.

Coalition President Thomas Lawson, an ARFVTP advisory committee member, said that allocations are fair, and still high enough to support California’s commitment to alternative fuels. “The funding plan allocates funding for natural gas infrastructure and provides vehicle incentives, which will allow the natural gas industry to move forward,” he said.

Cryoshelter Launches Next-Gen Heavy-Duty Truck LNG Tank

Austria-based LNG technology company Cryoshelter GmbH has introduced its second-generation LNG tank for heavy-duty trucks, which will reduce the overall cost of ownership by improving performance, the company said. The cryogenic thermal insulation system relies on two innovations built into the vacuum space between the inner tank and the outer shell: the Inner Tank Support (ITS) and the Cryoshelter Shield Technology. The ITS reduces heat losses while increasing the tank’s load-bearing capacity from 270 liters to 750 liters. The Shield Technology provides 10 times the specific reflective thermal insulation capacity of the multilayer-insulation technologies used in current LNG tanks, keeping the fuel cold longer, the company said.

Roseville Plans to Use Natural Gas to Fuel City Vehicles

Roseville has decided to expand the city’s sewer plant to include new facilities that will recover energy from waste, including RNG to power the city’s garbage trucks. The Energy Recovery Project will heat and compress waste to produce both RNG and electricity at the Pleasant Grove Wastewater Treatment Plant.

Sales of LNG and CNG Increase in Redlands

For the second time this year, the city of Redlands is increasing the amount of LNG and CNG available at its fueling station, thanks to an uptick in use by non-city vehicles. The city council approved buying $175,000 more in fuel from Applied LNG Technologies, a move that is expected to generate an additional $240,000 in revenues for the city this fiscal year.