1. (a) General Calculation of Credits and Deficits Using Fuel Pathways. LCFS credits or deficits for each fuel or blendstock for which a fuel reporting entity is the credit or deficit generator will be calculated according to the following equations:

   (1)

   

   where:

   

   is either the number of LCFS credits generated (a zero or positive value), or deficits incurred (a negative value), in metric tons, by a fuel or blendstock under the average carbon intensity requirement for gasoline (XD = “gasoline”) or diesel (XD = “diesel”);

   

   is the average carbon intensity requirement of either gasoline (XD = “gasoline”), diesel (XD = “diesel”), or fossil jet fuel (XD = “jet”) for a given year as provided in sections 95484(d), (e) and (f), respectively;

   

   is the adjusted carbon intensity value of a fuel or blendstock, in gCO₂e/MJ, calculated pursuant to section 95486.1(a)(2);

   

   is the total quantity of gasoline (XD = “gasoline”), diesel (XD = “diesel”), or fossil jet fuel (XD = “jet”) fuel energy displaced, in MJ, by the use of an alternative fuel, calculated pursuant to section 95486.1(a)(3); and

   C is a factor used to convert credits to units of metric tons from gCO₂e and has the value of:

   

   (2)

   

   where:

   CI_i is the carbon intensity of the fuel or blendstock, measured in gCO₂e/MJ, determined by a CA-GREET pathway or a custom pathway and incorporates a land use modifier (if applicable); and

   EER^XD is the dimensionless Energy Economy Ratio (EER) relative to gasoline (XD = “gasoline”), diesel (XD = “diesel”), or fossil jet fuel (XD = “jet”) as listed in Table 5. For a vehicle-fuel combination not listed in Table 5, EER^XD = 1 must be used unless an applicant is granted certification of an EER-adjusted CI value pursuant to section 95488.7(a)(3).

   (3)

   

   where:

   E_i is the energy of the fuel or blendstock, in MJ, determined from the energy density conversion factors in Table 4.

   Table 5. EER Values for Fuels Used in Light- and Medium-Duty, and Heavy-Duty Applications.

   Light/Medium-Duty Applications (Fuels used as gasoline replacement)

   Heavy-Duty/Off-Road Applications (Fuels used as diesel replacement)

   Aviation Applications (Fuels used as fossil jet fuel replacement)

   Fuel/Vehicle Combination

   EER Values Relative to Gasoline

   Fuel/Vehicle Combination

   EER Values Relative to Diesel

   Fuel/Vehicle Combination

   EER Values Relative to Fossil Jet Fuel

   Gasoline (incl. E6 and E10)

   Diesel fuel

   Or

   1

   Or

   1

   Alternative Jet Fuel

   1

   E85 (and other ethanol blends)

   Biomass-based diesel blends

   CNG or LNG (Spark-Ignition Engines)

   0.9

   CNG/ICEV

   1

   CNG or LNG (Compression-Ignition Engines)

   1

   Electricity/BEV or PHEV^* Truck or Bus

   5.0

   Electricity/BEV, or PHEV

   3.4

   Electricity/Fixed Guideway, Heavy Rail

   4.6

   Electricity/Fixed Guideway, Light Rail

   3.3

   On-Road Electric Motorcycle

   4.4

   Electricity/Trolley Bus, Cable Car, Street Car

   3.1

   Electricity Forklifts with lift capacity <12,000 lbs.

   2.4

   Electricity Forklifts with lift capacity ≥12,000 lbs.

   3.8

   eTRU

   3.4

   eCHE

   2.7

   eOGV

   2.6

   H2/FCV

   1.9

   H₂/FCV

   2.5

   H₂ Fuel Cell Forklifts with lift capacity < 12,000 lbs.

   1.6

   H₂ Fuel Cell Forklifts with lift capacity ≥12,000 lbs.

   2.1

   Propane

   1.0

   Propane

   0.9

   * BEV = battery electric vehicle, PHEV= plug-in hybrid electric vehicle, FCV = fuel cell vehicle, ICEV = internal combustion engine vehicle.

2. (b) Credit and Deficit Generation Frequency Using Fuel Pathways. Unless expressly provided elsewhere in this subarticle, credits and deficits for fuel transactions reported each quarter will be generated in LRT-CBTS accounts upon completion of the reporting period for the given quarter, if all the conditions set forth in section 95486(a)(1) are met.

3. (c) Calculation of Credits for EV Charging Using Fuel Pathways.

   1. (1) Base Credits. “Base Credit” refers to the credit generated by an EDU for electricity using carbon intensity values provided in the Lookup Table pathway for California Average Grid Electricity and the credit calculation in 95486.1(a).

      1. (A) Determining Quantity of Electricity. For calculating base credits to EDUs, the quantity of electricity must be determined as follows:

         1. 1. For Non-Metered Residential EV Charging. The Executive Officer will use the following method to calculate the quantity of electricity used for non-metered residential charging:

            

            where:

            

            is the estimated electricity use in kWh of non-metered residential plug-in electric vehicles assigned to an EDU for the reporting period;

            

            is the total number of non-metered residential EVs within the EDU service area;

            

            is the total number of non-metered residential EVs within California;

            Electricity_{Daily Average} is the quantity of KWh/day/vehicle of electricity used daily for residential charging of EVs, based upon the best data available to the Executive Officer, during the reporting period; and

            

            is the number of days in the reporting period;

         2. 2. Using the equation in subsection 1. above, the Executive Officer may also calculate, based upon the best data available, the quantity of non-metered electricity used in residential EV charging within service areas for which the EDU has not opted in or is not eligible to receive base credit per section 95483(c)(1)(A). The Executive Officer may then calculate credits generated from this quantity of electricity and assign these credits to Large IOUs and Large POUs that are eligible to receive base credits.
         3. 3. For Metered Residential EV Charging. The entity may demonstrate the quantity of electricity for the purposes of calculating the base credits for metered charging at residences through timely submission of Quarterly Fuel Transaction Reports based on meter records.
      2. (B) Calculation of Base Credits. The Executive Officer will use the quantity of electricity as determined in subsection (A) above to calculate the base credit using the Lookup Table pathway CI value for California Average Grid Electricity and the credit generation equation provided in section 95486.1(a).
      3. (C) Credits calculated and generated pursuant to subsection (B) above are exempt from the credit generation requirements pursuant to sections 95486(a)(2) and 95486.1(b).

   2. (2) Incremental Credits for Residential EV Charging. “Incremental Credit” refers to any credits generated in addition to the base credits generated by an EDU pursuant to subsection (1)(B) above, for the same electricity, using the calculation in subsection (2)(B), below.

      1. (A) Quantity of Electricity.

         1. 1. Non-Metered Residential EV Charging. The Executive Officer shall use the formula in 95486.1(c)(1)(A) for calculating the quantity of electricity eligible to generate incremental credits for each residence that has an electric vehicle that is not separately metered and is shown to receive low-CI electricity, and is not claimed by another generator of incremental low-CI electricity credits using metered data.
         2. 2. Metered Residential EV Charging for Incremental Credits. Any entity generating incremental credit for metered residential EV charging must supply the quantity of electricity through timely submission of Quarterly Fuel Transaction Reports based on meter records.

      2. (B) Calculation of Incremental Credits. Incremental credits for residential EV charging, including either low-CI electricity or smart charging, and incremental credits for smart electrolysis pathways, must be calculated according to the following equation:

         Credits_i(MT) = (CI_{grid average} - CI_reported) X Electricity X C

         where:

         Credits_i(MT) is the number of incremental LCFS credits generated (a zero or positive value), in metric tons, for improvements in carbon intensity of electricity supplied to residential EV charging or for hydrogen production using electrolysis compared to the grid-average carbon intensity;

         CI_{grid average} is the carbon intensity of California Average Grid Electricity pathway certified by the Executive Officer for a given year, or the applicable region's average grid electricity for hydrogen imported to California;

         CI_reported is the adjusted carbon intensity of electricity, in gCO₂e/MJ, as calculated for a certified Tier 2 pathway or a Lookup Table pathway, including smart charging or smart electrolysis pathways;

         Electricity is the total quantity of either low-CI electricity supplied for EV charging, or electricity supplied for smart charging or smart electrolysis and reported by hourly windows, in MJ, determined from the energy density conversion factors in Table 4; and

         C is a factor used to convert credits to units of metric tons from gCO₂e and has the value of:

         

4. (d) Calculation of Credits for Non-Residential EV Charging Using Fuel Pathways. The base and incremental framework does not apply to non-residential EV charging. Only one entity per FSE may claim credits for non-residential metered EV charging.

   1. (1) An entity may generate credits for Non-Residential EV charging using a carbon intensity for California Average Grid Electricity, Zero-CI Electricity, or Smart Charging pathway from the Lookup Table in section 95488.5, or a carbon intensity value certified through the Tier 2 pathway application process, and the credit calculation in 95486.1(a).
5. (e) Calculation of Credits for Other Electricity used as Transportation Fuel Using Fuel Pathways. An entity may generate credits for the non-EV charging applications listed in sections 95483(c)(3) to (6), which use electricity to displace conventional transportation fuel, using a carbon intensity for California Average Grid Electricity or Zero-CI Electricity from the Lookup Table 7-1 in section 95488.5, or a carbon intensity value certified through the Tier 2 pathway application process, and the credit calculation in 95486.1(a).

6. (f) Calculation of Credits for Hydrogen Using Fuel Pathways.

   1. (1) An entity may generate credits for hydrogen used as a transportation fuel using a carbon intensity value certified through the Tier 1 or Tier 2 pathway application process, and the credit calculation in 95486.1(a).
   2. (2) Smart Electrolysis Pathways for Hydrogen Production. An entity can generate incremental credits, in addition to credits generated under a pathway for electrolytic hydrogen produced using average grid electricity, for hydrogen using smart electrolysis pursuant to section 95488.5 and the incremental credit calculation in section 95486.1(c)(2)(B).

7. (g) Calculation of Deficit Obligation for Verified CI Exceedance. Beginning with the 2025 fuel transactions reporting year, a fuel pathway holder for a non-provisional fuel pathway generates a deficit obligation following a verified CI exceedance. A verified CI exceedance occurs if the verified operational CI of a fuel pathway for a given compliance period, pursuant to section 95488.10, exceeds the certified CI used for reporting that fuel pathway, and is calculated as specified below.

   1. (1) The quantity of deficits generated by CI exceedance is calculated as four times the difference between the verified operational fuel pathway CI and the reported CI, multiplied by the quantity of fuel reported using that fuel pathway during the applicable year. Deficits will be calculated using the following equation:

      Deficits(MT) = (CI_operational -- CI_reported) x E x C x 4

      where:

      Deficits(MT) is the number of calculated deficits from CI exceedance;

      CI_operational is the verified operational fuel pathway CI for a given compliance period;

      CI_reported is the certified CI in LRT-CBTS under which the fuel was reported;

      E is the reported fuel under a given certified fuel pathway in Megajoules;

      C is a factor used to convert credits/deficits to unit of metric tons from gCO₂e and has the value of:

      

   2. (2) Any fuel pathway holder without an LRT-CBTS account that generates a deficit obligation under this section must register to create an LRT-CBTS account. Any pathway holder generating deficits following a verified CI exceedance must satisfy the compliance demonstration requirements of section 95485.
   3. (3) A pathway holder that meets the exemption criteria specified in section 95488.10(a)(7)(C) will not generate deficits under this subsection.

Note: Authority cited: Sections 38510, 38560, 38560.5, 38562.2, 38571, 38580, 39600, 39601 and 43018, Health and Safety Code. Reference: Sections 38501, 38510, 39515, 39516, 38571, 38580, 39000, 39001, 39002, 39003, 39515, 39516 and 43000, Health and Safety Code; Section 25000.5, Public Resources Code; 42 U.S.C. Section 7545; and Western Oil and Gas Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249 (1975).

History

1. Redesignation and amendment of former section 95486, subsections (b)(3)-(c) as new section 95486.1 filed 1-4-2019; operative 1-4-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 1).

2. Amendment of subsection (c)(1)(A)2. filed 5-27-2020; operative 7-1-2020 (Register 2020, No. 22).

3. Amendment of subsections (a)(1)-(3), (c)(1)(A)1., (c)(1)(A)3. and (f)(1), repealer of subsection (a)(4), amendment of Table 5, new subsections (g)-(g)(3) and amendment of Note filed 6-27-2025; operative 7-1-2025 (Register 2025, No. 26).