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AB 32 Low Carbon Fuel Standard Found Unconstitutional; Other Climate Change Regulations Could Be Next


In Rocky Mountain Farmers Union v. Goldstene (Case no. CV-F-09-2234), the U.S. District Court for the Eastern District granted summary judgment in favor of a group of farming and oil-industry plaintiffs, finding that the Low Carbon Fuel Standard (“LCFS”) regulations promulgated by the California Air Resources Board (“CARB”) to implement provisions of California Assembly Bill 32 (“AB 32”) violate the Commerce Clause of the U.S. Constitution.

Plaintiffs argued that CARB’s method of assigning a higher “carbon intensity score” to ethanol produced in the Midwest, which is otherwise chemically and physically identical to that produced in California, impermissibly discriminates against interstate commerce.  The court agreed and issued an injunction prohibiting enforcement of the LCFS.

According to CARB, the LCFS applies evenhandedly to all ethanol used as a fuel in California.  Under the LCFS, all ethanol sold as fuel in California would receive a carbon intensity value based on its lifecycle greenhouse gas emissions analysis. The carbon intensity value is determined by application of the same scientific modeling tool for all ethanol sold in California, regardless of origin. The court found that, although the same modeling formula applies, the variables within the formula favor California ethanol producers.  CARB has appealed the court’s ruling.

If implemented, CARB estimates that the LCFS would result in a 10 percent reduction of the carbon content of motor fuels sold in California by 2020.  CARB identified the LCFS as a “key element” in its Climate Change Scoping Plan, which outlines the State’s overall strategy for meeting the AB 32 goal of reducing greenhouse gas emissions by 20 percent in 2020.  The court’s prohibition against enforcement of the LCFS could impair the State’s ability to meet this goal.

Key Points

The decision does not affect other aspects of CARB’s AB 32 implementation strategy, several of which took effect on January 1st.  However, challenges to other aspects of California’s climate change regulations, particularly the cap and trade program, based on the dormant Commerce Clause argument embraced by the court seem likely.  See http://www.sacbee.com/2012/01/12/4181493/valeros-revenge-foils-ab-32-implementation.html for more information.

Written by:  Tina Thomas and Amy Higuera

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For questions relating to this blog post or any other California land use, environmental and/or planning issues contact Thomas Law Group at (916) 287-9292.

The information presented in this article should not be construed to be formal legal advice by Thomas Law Group, nor the formation of a lawyer/client relationship. Readers are encouraged to seek independent counsel for advice regarding their individual legal issues.



dateJanuary 22nd, 2012byby


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