In an unexpected development, California’s contentious new fuel regulations, integral to the state’s initiative to move away from fossil fuels, have been rejected by the state agency responsible for reviewing the legality of regulations.
Last year, the Air Resources Board implemented these fuel standards, which sparked heated debates due to their potential impact on gasoline and diesel prices, raising concerns about an undisclosed increase in costs.
The Office of Administrative Law, the state agency tasked with ensuring that regulations are clear, necessary, legally sound, and accessible to the public, deemed the rules inadequate. They pointed out that the proposed regulations failed to meet a requirement under state law mandating that rules be clear enough to be easily understood by impacted individuals.
In response, the Air Resources Board stated that it would thoroughly review the rejection before re-submitting the regulations, with a deadline set for 120 days. Any significant modifications would necessitate a postponement, which would include a period for public feedback.
The low carbon fuels program, in existence since 2011, is designed to provide financial incentives to companies that manufacture cleaner transportation fuels. The initiative aims to facilitate California’s transition away from fossil fuels that contribute to smog, air pollution, and greenhouse gas emissions.
This program encompasses a credit trading system valued at $2 billion, mandating that fuels sold in the state become increasingly cleaner, while also incentivizing the production of less-polluting alternatives like biofuels derived from soybeans or manure.
An initial assessment delivered by the Air Resources Board earlier this year estimated that the new regulations might raise diesel prices by 59 cents per gallon and gasoline prices by 47 cents. However, officials later clarified that these figures should not be viewed as accurate predictions of future costs at the pump.
In contrast, a report from the University of Pennsylvania’s Kleinman Center for Energy Policy estimated that the modifications to fuel standards could lead to an 85-cent increase in gas prices by 2030.
Many Republican legislators vehemently opposed the regulations, leading to the introduction of a bill aimed at repealing them. They celebrated the Office of Administrative Law’s decision to reject the proposed rules.
“Families across the state are already facing skyrocketing living expenses, and an increase of 65 cents or more in gas prices will exacerbate their financial woes,” stated Senator Rosilicie Ochoa Bogh, a Republican from Redlands. She expressed frustration over the administration’s disregard for calls to reconsider the regulations.
Advocates for the new rules argue that they are crucial for California to meet its ambitious climate targets, including achieving net-zero emissions by 2045. However, critics warn that these standards could further escalate fuel prices in a state where consumers already contend with some of the highest gas prices in the country.
Last month, the Air Resources Board was compelled to withdraw other climate and air quality regulations aimed at reducing emissions from trucks and trains after receiving notice that the Trump administration would deny waiver requests related to those rules.
