Tradable credits system design and cost savings for a national low carbon fuel standard for road transport
- Univ. of Maine, Orono, ME (United States). Margaret Chase Smith Policy Center
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
This research examines the economic implications of different designs for a national low carbon fuel standard (NLCFS) for the road transportation sector. A NLCFS based on the average Carbon Intensity (CI) of all fuels sold in the gasoline and diesel markets will generate an incentive for fuel suppliers to reduce the measured CI of their petroleum fuels. The economic impacts of a NLCFS are fundamentally determined by: the availability of low carbon fuels; the compliance path; the reference level CI of the fuel baseline; and the degree of flexibility in the credit system. To quantitatively examine the implications of a NLCFS, we created the Transportation Regulation and Credit Trading (TRACT) Model. With TRACT, we model a NLCFS credit trading system among profit maximizing fuel suppliers for light- and heavy-duty vehicle fuel use for the United States from 2012 - 2030. Given the wide range of cost and availability of biofuels, we find that credit trading across gasoline and diesel fuel markets combined with credit banking can significantly reduce compliance costs and stabilize credit prices. We make policy recommendations on how to combine a NLCFS with other existing regulations for transportation fuels.
- Research Organization:
- Oak Ridge National Laboratory (ORNL), Oak Ridge, TN (United States)
- Sponsoring Organization:
- USDOE
- DOE Contract Number:
- AC05-00OR22725
- OSTI ID:
- 1352738
- Journal Information:
- Energy Policy, Journal Name: Energy Policy Journal Issue: C Vol. 56; ISSN 0301-4215
- Publisher:
- Elsevier
- Country of Publication:
- United States
- Language:
- English
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