Fuel companies could comply by blending in more renewable fuels or by substituting alternative fuels with lower carbon intensity. Companies producing low-carbon fuels would be able to sell pollution credits to higher-polluting fuel producers.
Proponents hope the requirements will spur new clean-fuel innovations and speed the adoption of alternative-fuel technologies.
That's a business opportunity for Blue Star Gas, a propane supplier that operates in northern California and Oregon and converts fleet vehicles to run on propane autogas. Full adoption of the low-carbon fuel standard would create an incentive for companies to convert fleets to run on propane, generating pollution credits that could be sold to high-polluting fuel suppliers, said Darren Engle, the company's marketing director.
Electric utilities or owners of electric-vehicle charging stations also could generate credits based on electricity used to power electric vehicles.
Critics have a number of concerns, chief among them that gas and diesel prices would rise significantly — a claim proponents dispute.
They also say it would be impossible to meet the 10 percent reduction targets based on the fuels and technologies currently available. Under Oregon law, 10 percent of retail gasoline already must be ethanol, and 5 percent of diesel must be biodiesel.
"We're an industry that's very heavily regulated," said Debra Dunn, president of Oregon Trucking Associations, and industry group. "Our profit margins are very narrow. So any added cost really has a much greater impact on our bottom line than most people realize."
Critics also say Oregon should wait for courts to sort out whether a similar law in California is unconstitutional. A federal judge ruled earlier this year that the California law illegally discriminates against out-of-state fuel producers. The case is now pending before the 9th U.S. Circuit Court of Appeals.