Top US court denies petitions against California fuel standards

30 June 2014 20:25 Source:ICIS News

HOUSTON (ICIS)--The US Supreme Court on Monday denied three petitions to hear a case against California’s low-carbon fuel standard (LCFS) that, if ruled unconstitutional, could have increased demand in the state’s cap-and-trade programme.

The LCFS is a companion programme to the state’s carbon market that is intended to reduce emissions from transportation fuels by 10% from 2010 levels by 2020. The programme encourages the use of gasoline and diesels with a low-carbon footprint.

The Supreme Court announced that it will not hear the case from petitioners who had challenged the LCFS regulation on the grounds that it violates the dormant commerce clause, or a provision that prevents states from regulating business in other states.

The American Fuel & Petrochemical Manufacturers (AFPM) and the Rocky Mountain Farmers Union (RMFU) were among the ethanol, oil companies and trade groups to petition to the court. The Air Resources Board (ARB), the cap-and-trade regulator, also petitioned the court.

By denying the petitions, the Supreme Court affirmed the lower court’s decision that found the ARB did not violate the clause or discriminate against out-of-state fuel producers. The LCFS programme factors in the distance a fuel must travel to get to the California market, meaning in-state fuels have a lower carbon footprint.

Legal experts had said that a Supreme Court decision against the ARB could have opened the California regulator to other lawsuits claiming that its programmes violate the dormant commerce clause. By the court’s denial of the petitions, lawyers said other lawsuits are now less likely to be filed.

By Dan McGraw