BILL ANALYSIS SB 210 Page 1 Date of Hearing: August 22, 2007 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mark Leno, Chair SB 210 (Kehoe) - As Amended: August 20, 2007 Policy Committee: Transportation Vote: 8-6 Natural Resources 6-3 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill requires the Air Resources Board (ARB), by January 1, 2010, to adopt, implement and enforce a low-carbon fuel standard (LCFS) that achieves maximum technologically feasible and cost-effective greenhouse gas (GHG) emissions reductions, including a minimum 10% reduction in life-cycle GHG by 2020. Specifically, this bill: 1)Requires the LCFS to maintain or improve reduction of emissions of air pollutants and toxic air contaminants as measured on a life-cycle basis that include all activities related to the fuel's production, extraction, cultivation, transportation, storage and use. 2)Specifies that a fuel produced from biomass derived from certain public lands, and lands newly-converted from open space, does not meet the LCFS. 3)Requires the ARB, by January 1, 2010, to develop environmental reporting requirements to determine the environmental impacts associated with producing the feedstock and fuel that is subject to the LCFS. 4)Requires the California Energy Commission (CEC), by June 30, 2013 and triennially thereafter, to assess the actual and expected environmental impacts associated with LCFS implementation. 5)Requires the CEC, by June 30, 2010, to update and reissue its alternative fuels report. SB 210 Page 2 FISCAL EFFECT 1)Moderate costs, in the range of $1.5 million spread over three years starting in 2007-08, to the ARB to develop and begin enforcing the LCFS, and to develop related environmental reporting requirements. To the extent the ARB is already conducting some of these activities under an executive order issued by the governor, these costs would be reduced. (Motor Vehicle Account) 2)Moderate one-time costs, $375,000 in 2008-09 and 2009-10, to the CEC to update its alternative fuels report. (Energy Resources Programs Account) 3)Moderate GF costs, in the range of $180,000 in 2012-13 and triennially thereafter, to the CEC to assess LCFS environmental impacts and to issue recommendations on how to minimize these impacts. COMMENTS 1)Rationale . The author believes reducing the level of carbon in engine fuels or reducing the emission of carbon from the production and use of these fuels, especially in light of the fact that the transportation sector accounts for over 40% of GHG emissions in California, would be a major means by which to achieve the GHG emission reductions mandated by AB 32 (Nunez) - Chapter 488, Statutes of 2006. 2)Governor's Executive Order . In January, Governor Schwarzenegger issued executive order S-01-07, which establishes a goal to reduce, by 10%, the carbon intensity of California's transportation fuels by 2020 and to require the ARB to consider adopting an LCFS to implement this goal. In June, the ARB adopted establishment of an LCFS as an early action measure under the AB 32 process. Analysis Prepared by : Steve Archibald / APPR. / (916) 319-2081