California Low Carbon Fuel Standard

Last updated: 12 October 2021

California’s Low Carbon Fuel Standard (LCFS) is a trading mechanism designed to reduce the CO2 intensity of the State’s fuel mix. In January 2019, a Carbon Capture and Sequestration (CCS) Protocol was agreed for the LCFS, which allows transportation fuels whose lifecycle emissions have been reduced through CCS to become eligible for credits. The Protocol covers a wide variety of CCS applications, as long as they lead to storage of captured CO2 in depleted oil and gas reservoirs or saline formations, or are used for enhanced oil recovery in oil and gas reservoirs in line with the Protocol’s permanence requirements for geologic sequestration. Credits from projects are based on life cycle emission reductions, and issued after the reported reductions are verified. Credit applications for carbon capture and sequestration may be approved through either the LCFS’ fuel pathway-based crediting or project-based crediting.


Capture facilities generate the LCFS credits for CCS projects, although the associated storage facility must also be a co-applicant (they do not need to be co-located.) Direct air capture facilities do not need to be located in the State to generate credits – they can be anywhere in the world – but must comply with the CCS Protocol, including monitoring of CO2 storage for up to 100 years.

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