A critical piece of California’s new law cutting carbon emissions from transportation fuels is getting a another look, with state air-quality regulators likely to vote by December on the issue known as “indirect land use.”

The months of new study follows complaints from ethanol producers and others who said the new rule unfairly targeted farmers who grow fuel crops.

“We want to make sure that the numbers we’ve got track with the latest science,” said Stanley Young, a spokesman for the Air Resources Board, “so we will be engaging in a review of the related indirect impacts and submitting them to the board.”

Last week, California’s Air Resources Board approved the Low Carbon Fuel Standard, or LCFS, which is intended to reduce climate-changing carbon emissions by 10 percent from gasoline, diesel and other fuels by 2010. The regulation, the first of its kind in the world to combat greenhouse gases, would remove some 16 million metric tons of carbon from the air during the next 11 years, according to the board staff. Just days

The new rule is intended consider the “carbon intensity” of fuels not only at combustion, but in the manufacture and distribution of the fuels, including gasoline, diesel, biofuels such as ethanol, and others. The regulation takes a “cradle-to-grave” approach to fuels, and it is this approach that has sparked complaints from ethanol producers, because it counts carbon emission used along the entire chain of ethanol production.

For example, the “cradle-to-grave” approach means considering the emissions from the processes used to grow the corn  the fertilizer manufacturing, the emissions for trucking and tractors, processing costs are taken into account when calculating the total carbon emissions associated with ethanol.

Because it has a potential impact on what crops are grown and how they are grown, the regulation may change the way land is used. Cutting down trees to plant corn to make ethanol could result in a net increase in carbon emissions, for example.

“The new standard means we can begin to break our century-old dependence on petroleum and provide California with greater energy security,” ARB Chairwoman Nichols said earlier. “The drive to force the market toward greater use of alternative fuels will be a boon to the state’s economy and public health - it reduces air pollution, creates new jobs and continues California’s leadership in the fight against global warming.”

But some fuel producers questioned efficacy and fairness of the regulation.

Combining the emissions’ tally means that biofuels “are held to a higher standard than all other fuels, including oil,” according to an earlier assessment by the New Fuels Alliance, which represents biofuels producers. Others in the ethanol industry agreed.

“Adopting this standard sets a dangerous precedent about the application of unproven science to industries across the country,” said Bob Dineen, president and CEO of the Renewable Fuels Association. “In unfairly penalizing ethanol, ARB is relegating California to more petroleum use as biofuels are the only viable alternative liquid fuel.” A letter signed by 135 scientists questioned the “cradle to grave” approach.

At the time the ARB approved the Low Carbon Fuel Standard, the board also approved conducting the  new review, noting that it wanted more time to study the issue. An industry trade publication, Ethanol Industry Magazine, described the review as “a bright note in an otherwise dismal decision for the ethanol industry.” Critics of the LCFS believe the regulation will cost $3.7 billion annually.
The ARB rejects the ethanol industry’s position that it favors petroleum fuels over ethanol, notes that in seven of 11 ethanol production and use scenarios called “pathways,” ethanol emerged with fewer carbon emissions than petroleum-based fuels.

The regulation applies to California, but environmentalists and most ARB members believe the rule will prompt a corresponding rule at the federal level. The state rule Gov. Schwarzenegger described it Thursday as a “first in the world” regulation requires the carbon component of fuels to be reduced by 10 percent during the next 11 years. The goal is to eliminate 16 million metric tons of carbon emissions from the air over the next decade.

According to the state, the LCFS will result in the replacement of 20 percent of on-road gasoline consumption with lower-carbon fuels, triple the size of the state’s renewable fuels market and place more than 7 million alternative fuel or hybrid vehicles on California’s roads – a 20-fold increase over today’s number of vehicular hybrids.

Because it has an impact on how fuel crops, such as corn, are grown and harvested, the LCFS affects land-use decisions as well – a sore point with LCFS critics, led by business interests. Others believe the regulation may be based on inadequate research and pop science.

It would encourage the development of alternative fuels, including some biofuels, hydrogen and electricity, and require conventional fuel producers to track – and reduce – the carbon in their products.

“It’s a game-changer,” Young said. “The broader implication here is that for 35 to 40 years we have been trying to find a way to steer the economy away from a dependence on petroleum, and it’s a problem that’s been bedeviling us. The Low Carbon Fuel Standard presents an opportunity we’ve never had before. It sends a clear signal to the market that there will be a demand for low-carbon fuels, no matter what the cost of oil.”