Carbon Intensity – Impact to Fuel Producers & Fleets
October 9, 2020
Carbon intensity (CI) is a term of growing importance commonly heard within alternative fuel discussions. However, for someone not familiar with the language, it can often seem confusing – but, it doesn’t have to be. If you’re looking to better understand the role carbon intensity has in the alternative fuel space, look no further – this post is for you. Below, we’ve compiled the most frequently asked questions related to carbon intensity.
1. What is carbon intensity?
Carbon intensity can be defined as a fuel’s lifecycle, or well-to-wheel, greenhouse gas emissions per unit of transportation energy delivered. It’s important to note that a CI score accounts for lifecycle emissions, not just those that are emitted when a fuel is used by the transportation sector. This means emissions from generating, refining and utilizing a fuel are tracked and factored into the final CI score. This score is then expressed in grams of carbon dioxide equivalent per megajoule of energy provided by that fuel.
After a fuel’s pathway is determined by assessing the greenhouse gas emissions from each stage of the fuel’s feedstock production, conversion and use, a CI score can be calculated. Often, scores are calculated using the GREET model (Greenhouse Gases, Regulated Emissions and Energy Use in Transportation) which was developed by the Argonne National Laboratory. While there are other assessment tools available, it’s important to note they may only consider tailpipe (or end use) emissions – unlike the GREET model which offers a comprehensive measurement of total emissions produced. This is an important distinction because many alternative fuel programs use CI scores to determine the amount of financial credits certain fuels are eligible to generate – leading us into our next point.
2. How exactly does carbon intensity impact credits generated by alternative fuels?
Carbon intensity scores are a key factor in programs aimed at reducing pollution generated by transportation, namely the California LCFS and Oregon CFP. They are used to determine how many credits a regulated party will receive from either producing or utilizing an alternative fuel. This is important in that for fleets and organizations seeking these financial incentives, it’s essential to minimize their CI scores to maximize credit potential. This may sound wrong, but the lower the CI score, the cleaner it is.
One way to begin evaluating the credit potential is to first understand the current CI scores associated with alternative fuel types. California Air Resources Board’s graph below depicts the Energy Economy Ratio (EER)- adjusted CI ranges for each alternative fuel in comparison to gasoline and diesel – the baseline fuels. An EER-adjusted CI score is calculated by taking an alternative fuel’s CI score and dividing it by its EER ratio. The resulting value represents emissions from the use of an alternative fuel per megajoule of displaced conventional fuel. Because of differences in feedstock types, processing and vehicle efficiencies, most fuels produce a range of certified CI scores.
Currently, there are various low CI fuels that are eligible to receive credits: ethanol, biodiesel, renewable diesel, renewable natural gas (RNG), compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen and electricity for use within transportation. While ethanol is the greatest contributor to the alternative fuel pool for the transportation market, there is a constraint on how much it can contribute to the overall fuel pool. This is because most vehicles are limited to a 10% ethanol/gasoline blend. However, with the demand for other alternative fuels expanding, the composition of the fuel pool is becoming more diversified and importance of CI scores is rising.
3. Bring it home. Why does this matter?
A fuel’s CI score is a key focus in determining its financial value, which is why understanding CI use and calculation is key to renewable project developers and end users. For fuels with higher CI scores, you will generate fewer credits – hindering the strong incentive potential alternative fuels offer. On the opposite end, fuels like renewable natural gas boast the lowest CI scores and, in those instances, can be the most financially attractive. Together, CI scores and financial credits drive expansion and efficiencies in renewable fuel production, while incentivizing fleets to adopt cleaner fuels for improved air quality.
Now, having a basis for what carbon intensity is and the importance of CI scores in the credit generation process, there’s only one question left: how can carbon intensity benefit you? From developing more efficient production projects to sourcing the cleanest fuel, we can help. Reach out to learn more.