In a surprising turn of events, California’s new and controversial fuel standard, a crucial part of its efforts to replace fossil fuels, has been rejected by the state agency tasked with reviewing the legality of state regulations. The fuel standard, enacted by the Air Resources Board last year, sparked heated debate primarily due to its potential to increase the prices of gasoline and diesel to an unknown extent.
The rejection came from the state’s Office of Administrative Law, whose mission is to ensure that regulations are clear, necessary, legally valid, and accessible to the public. The agency informed the Air Board that the rule does not comply with a provision in the state code requiring clarity in the drafting of regulations so that those directly affected by them can easily understand their meaning.
The Air Board has stated that they will review the order and resubmit the rules within the required 120 days. However, any substantial changes would necessitate a delay, including a public comment period. The low-carbon fuel program, which provides financial incentives to companies to produce cleaner transportation fuels, aims to help the state transition away from fossil fuels that contribute to smog, air pollution, and greenhouse gases that warm the planet.
Established in 2011, the $2 million credit trading system requires fuels sold in California to become progressively cleaner while offering financial incentives to companies to produce less polluting fuels, such as biofuels made from soy or cow manure.
An initial assessment published in 2023 by the Air Board projected that the new rules could potentially raise diesel prices by 59 cents per gallon and gasoline by 47 cents. However, officials later clarified that the analysis should not be interpreted as a prediction of future credit prices or a direct impact on pump prices.
A report from the Kleinman Center for Energy Policy at the University of Pennsylvania predicted that changes to fuel standards could increase gasoline costs by 85 cents per gallon by 2030. Republican lawmakers, who opposed the standard and introduced a bill to repeal it, welcomed the legal office’s decision to reject it.
Senator Rosilicie Ochoa Bogh, a Republican from Redlands, applauded the rejection, stating, “Families in this state are already dealing with rising costs of living, and a gasoline price increase of 65 cents or more will only deepen their financial strain. It is deeply frustrating that the governor’s administration has ignored calls for reconsideration from the start.”
Supporters argue that the new rules are necessary for California to stay on track with its ambitious climate goals, including net-zero emissions by 2045. However, critics have warned that the new standards could further raise gasoline prices in a state where drivers already face some of the highest fuel costs in the country.
Last month, the Air Board was forced to abandon other climate and air pollution standards that would have cleaned up emissions from trucks and trains because the Trump administration would not grant exemptions.
Alejandro Lazo writes about the impacts of climate change and air pollution and California’s policies to tackle them. He’s written about the state’s groundbreaking electric vehicle mandate, the oil…
