A judge in Federal District Court in Fresno, California, has ruled that the State of California's Low Carbon Fuel Standard is unconstitutional. Judge Lawrence J. O'Neill agreed with the arguments that the LCFS is in violation of the Commerce Clause in the U.S. Constitution. The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct.
On this claim the Court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the Court issued an injunction. Judge O'Neill also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing Green House Gas emissions to combat global warming.
The judge agreed with the farmers that California’s method of assigning a higher so-called carbon intensity score to ethanol produced in the Midwest, which is otherwise chemically and physically identical to that produced in California, because of factors such as electricity used to produce it and transportation, discriminates against interstate commerce.
Similarly, the judge found that California discriminates against Alaska and foreign crude oil by assigning these a higher carbon intensity value.
In a joint statement, RFA President and CEO Bob Dinneen and Growth Energy CEO Tom Buis said the state of California overreached in creating its low carbon fuel standard by making it unconstitutionally punitive for farmers and ethanol producers outside of the state's border. With this ruling, it is our hope that the California regulators will come back to the table to work on a thoughtful, fair, and ultimately achievable strategy for improving our environment by incenting the growth and evolution of American renewable fuels.