Introduction
China is predicted to become the world’s largest emitter of greenhouse gases sometime before the end of this decade. Though energy consumption of all sectors in China is increasing at alarming rates, the growth of China’s transportation sector is particularly staggering: China’s automobile sales exceeded expectations with over seven million new vehicles sold in 2006, while the automobile industry has seen recent, yearly growth rates of 25% or more. China is now the second largest vehicle market in the world, and China’s vehicle population could exceed that of the United States within 15-20 years. Annual carbon dioxide emissions from the on-road transportation sector alone in China could reach 2,500 MMT by 2030.
Simultaneously, China, having experienced a steady increase in foreign oil dependence since it first became a net oil importer in 1993, now imports greater than 50% of its petroleum. The transportation sector, currently fuelled almost exclusively by petroleum-based fuels, consumes at least 25% (and rising fast) of this imported oil.
In order to promote energy security and mitigate rising greenhouse gas emissions, China, like many nations around the world, has set future targets for renewable energy and/or biofuel use in the transportation sector. One example of such a target is the Chinese government’s goal that biofuels should comprise 10% of all transportation fuels by 2010. However, a transition away from traditional fossil fuels does not necessarily create desirable reductions in greenhouse gas emissions or meet critical sustainability requirements. Research shows that different fuels’ life-cycle greenhouse gas emissions (including production, transport, and finally consumption) vary dramatically depending on fuel feedstock, production efficiency, transportation method, and other factors. Care must also be taken to ensure that biofuel feedstocks do not endanger arable land or food supply, nor threaten fragile ecosystems.
Some biofuels, such as biodiesel made from grease (waste cooking oil) or oil seeds from certain plants grown on marginal land, are so-called “green” biofuels because their use can result in a net GHG reduction of 80% or more over the use of fossil fuels. On the other hand, other biofuels, for example corn-based ethanol created in America using coal-fired power, are known as “brown” biofuels because their use actually may not result in an overall GHG emissions reduction over using fossil fuels directly.
The problem with current, renewable energy and biofuels targets is that these targets do not differentiate between such “brown” and “green” biofuels. Therefore, in the EU and California, progressive legislation is currently being developed to transition away from direct use fuel targets and towards a new type of target based on the goal of overall greenhouse gas emissions reduction and sustainability. This progressive legislation is called a Low Carbon Fuel Standard.
Low carbon fuels are fuels for which the greenhouse gas emissions over the entire life cycle of the fuel (including production, transport, and finally consumption) are lower than those of traditional, petroleum-based fuels like gasoline and diesel. Low carbon fuels include many forms of alternative fuels, including many biofuels (depending on feedstock and pathways), electricity from renewable sources, and hydrogen.
A Low Carbon Fuel Standard is fundamentally a different way of framing the push for renewable fuels and biofuels. Rather than governments choosing individual fuels and technologies, the policy simply requires fuel suppliers to quantify and eventually reduce the amount of life cycle GHG emissions generated from fuels sold into the marketplace. It is essentially a certification program that sets greenhouse gas emissions targets and then allows the market to determine how to meet them.
