Establishing state-wide Clean Fuel Standards

The cleanest fuels flow into states with established market mechanisms valuing the lowest carbon intensity scores – without these types of policies, renewable fuels producers can’t readily compete in fossil fuel markets. Our client, one of the world’s largest producers of renewable diesel and SAF, had set a goal of supplying net zero renewable fuels by 2035 and was looking to leverage CFS programs in new territories. Tapping into the Washington market was identified as a top strategic priority.

At the time of this project, only California, British Columbia, and Oregon had established LCFS or CFS programs. The entire West Coast was unified in its desire to address transportation emissions, but Washington’s lack of CFS limited the region's participation in renewable fuels markets and our client’s impact. 

Given our team’s proven record of establishing clean fuel programs along the West Coast, the renewable fuels producer engaged us to accelerate the policy, financial, and market opportunities of CFS in Washington. 

Our approach

Over two years, our team partnered with the renewable fuels producer to create a repeatable model for advancing CFS in Washington and beyond. Here’s an overview of our 5-step approach:

1) Constituent research. Using public opinion research techniques, we determined the relative level of support for and opposition to a clean fuels policy in Washington. This helped us develop a strategy for communicating the benefits of clean fuels programs to both the general population and government officials. For instance, through our analysis, we learned that voters associate clean fuels with better health and clean air and water, while fossil fuels are seen as detrimental to health and air quality.

We also learned the public was concerned about policies that result in increased gasoline or diesel prices. Our team of data scientists and independent researchers modeled the relationship between existing LCFS and CFS credit prices and retail gas and diesel prices and found almost no correlation between the two. Furthermore, using multiple survey methods among West Coast market participants, we found that most voters prioritize health, clean air, and clean water over fuel prices.  

To help policy makers address stakeholder concerns, we used publicly available data to explore the economic impacts of CFS policies. Our research revealed that in California, for example, the GDP of the transportation sector grew by over 94% since the LCFS was implemented.  

2) Cross-industry coalition building. We then facilitated connections between a broad coalition of supporters in tandem with environmental NGOs and clean transportation advocates in targeted states to amplify the effort. A cross-sector convening of this kind had rarely been done in Washington and was critical to helping the CFS pass. Monthly meetings were held among all stakeholders to discuss progress and identify action items.

Stakeholder groups represented in the coalition included:

• Environmental justice groups
• Business groups
• Labor groups
• Health organizations
• Environmental organizations
• Renewable energy producers
• Renewable fuel producers
• Service providers
• Fossil fuel interests
• Electric vehicle charging companies
• Utilities 

3) Legislation drafting and framework creation. Next, we outlined a policy framework based on data, lessons learned, and best practices from the West Coast and Canada to help policymakers develop legislation for Washington. The policy was designed to be technology-neutral, focusing on carbon intensity (CI) reductions of all fuel and energy types used in transportation. 

This approach results in direct decarbonization of the transportation system, regardless of the method – electrons or molecules. Producers of electricity source the lowest CI electrons, and producers of renewable fuels create the lowest CI renewable fuels. That way, everyone is focused on developing the market for zero-carbon-intensity transportation.

The 40+ page document included the following key elements:

• Executive summary and overview of the CFS policy.
• Definition of alternative fuels such as sustainable aviation fuel (SAF), renewable diesel, hydrogen, renewable natural gas, biodiesel, and electricity.
• Overview of how carbon intensity is defined, using the most up-to-date GREET model for calculations.
• Goals of the CFS – in Washington, the CFS set a goal of gradually reducing the carbon intensity of transportation fuels to 20% below 2017 levels by 2034.    

4) Communications and engagement. To engage, educate, inform, and gain support from the broader community, our team launched a multi-channel media campaign. This included a dedicated website and social media campaign, paid advertising, blog posts, and email and text message outreach. Additional PR and media campaigns were launched to educate target audiences throughout the legislative process.

5) Legislative advocacy. Finally, we served as subject matter experts throughout the legislative process by attending hearings, presenting data, and testifying when requested to answer questions on renewable fuels.

Thanks to the deep partnerships with local NGOs and community groups and their leadership, the Washington CFS passed with robust environmental justice provisions. For example, as part of the policy, utilities are required to reinvest 40% of their charging revenue into disadvantaged communities.

Since passing the CFS policy, Washington has seen a substantial influx of electrification and renewable diesel credits, making the market highly competitive and valuable to renewable fuels producers and consumers. In 2023 alone, the program helped avoid nearly 2 million MT CO2e and is over-performing in carbon intensity.