On February 18, 2025, California’s Office of Administrative Law (OAL) issued a release disapproving the state’s Air Resources Board’s (CARB) amendments to the Low Carbon Fuel Standard (CA-LCFS). Originally approved by CARB’s board in November 2024, these amendments were aimed at further reducing greenhouse gas (GHG) emissions and supporting cleaner transportation fuels in California. However, OAL identified inconsistencies with the clarity standard outlined in Government Code section 11349(c), leading to the disapproval of the amendments.

CARB has 120 days to address the concerns identified by the OAL. While non-substantial changes will be added to the rulemaking record, any substantive modifications will undergo a public comment period before finalization. Meanwhile, CARB will continue implementing the existing LCFS regulation that has been in effect since July 2020.

The CA-LCFS in its current form may lead to an overproduction of credits, exacerbating the existing oversupply situation. The delay in implementing the amended targets means that obligated parties participating in the CA-LCFS must continue operating under the old compliance curve, which may not sufficiently address market imbalances. Without the updated targets, surplus credits could continue to accumulate, potentially impacting credit prices and the overall effectiveness of the program in driving emissions reductions.

EcoEngineers is Here to Help

EcoEngineers is following this process closely to assess the potential impacts on its clients. Our team is prepared to help businesses navigate any regulatory changes that may arise from the CA-LCFS amendment review process. We are committed to keeping our clients informed and prepared for any changes in California’s low-carbon fuel landscape.

If you have questions or would like to discuss how these regulatory developments may affect your operations, please email Lisa Hanke, Regulatory Engagement Director, at lhanke@ecoengineers.us.