California Air Resources Board

The LCFS Regulation, which appears at sections 95480 to 95503 of title 17, California Code of Regulations, is designed to reduce greenhouse gas emissions associated with the life cycle of transportation fuels used in California. CARB staff has prepared this guidance information to describe the regulatory requirements in a user-friendly format. Unlike the regulation itself, information on this webpage does not have the force of law. It is not intended to and cannot establish new mandatory requirements beyond those that are already in the LCFS Regulation, nor can it supplant, replace or amend any of the legal requirements of the regulation. Conversely, any omission or truncation of regulatory requirements does not relieve entities of their legal obligation to fully comply with all requirements of the regulation.

Substitute Pathways

Pursuant to section 95488.9(d) of the LCFS,1 CI values for substitute pathways are calculated based on the volume-weighted average CI for that fuel in the prior data year. 

Substitute pathways can only be used for reporting the following transactions types in the LCFS Reporting Tool and Credit Banking and Transfer System (LRT-CBTS):

• Sold without obligation,
• Purchased without obligation,
• Export,
• Loss of inventory, or
• Not used for transportation.

When using a substitute pathway, the fuel reporting entity must use the default Company ID and Facility ID values for reporting in the LRT-CBTS, as provided below:

• Default Company ID: 0000 (Alt. Fuel Production Facility – Defaults)
• Default Facility ID: 00004 (Production Facility Unknown – CI Unknown)

Substitute Pathways for Reporting Fuels With Unknown CI for 20232

Substitute Pathways for Reporting Fuels With Unknown CI for 20243

Sunsetting of Active Pathways

Fuel pathways that receive a sunset date will no longer receive a one quarter overlap for inventory swapping using the "Loss of Inventory"/ "Gain of Inventory" transaction types in the LRT-CBTS. It is recommended that parties that wish to further transfer this fuel downstream use the substitute fuel pathways provided above to make a sale without obligation to their downstream party, subsequently initiating a type 1 credit transfer with a zero-credit price in the LRT-CBTS to process the credits that would have been associated with a legacy pathway sale with obligation transaction.

Using Default Fuel Blend Levels for Reporting

When fuel blend levels are not known or cannot be reasonably estimated based on the information available to the reporting entity,4 the following default blend percentages must be used to break out and report fuel with relevant fuel pathway code. These default blend percentages apply for reporting only the following transaction types in the LRT-CBTS when blend levels are not known:

• Export,
• Loss of inventory, or
• Not used for transportation.

See the example below on how to use default blend percentages for reporting.

Default Blend Percentages for Reporting Fuels with Unknown Blend Levels for 2023

Default Blend Percentages for Reporting Fuels with Unknown Blend Levels for 2024

The default blend percentage value for ethanol in E85 is based on the weighted average ethanol content reported under E85 test program exemption. Default blend percentage values for gasoline and diesel blends containing ethanol and renewable diesel, respectively, are based on the best conservative representation of LCFS data. Default blend percentages for biodiesel blends are based on the data reported in the Alternative Diesel Fuel (ADF) Program, calculated as a volume-weighted average. 

CARB plans to post annual updates to these values by October for the subsequent reporting year (e.g., update for 2021 reporting to be posted by October 2020).

Reporting Fuel Export

Pursuant to section 95491(d)(1)(D) of the LCFS regulation, if fuel reported in the LRT-CBTS is subsequently exported out of California, the export must be reported in the LRT-CBTS by the entity responsible for reporting export as described in section 95483(a)(4).11

Blend Level Disclosure and Product Transfer Document (PTD) Requirements

An entity transferring ownership of fuel is the "transferor" and an entity acquiring ownership of fuel is the "recipient." The transferor must provide the fuel blend levels to the recipient that are known to the transferor or reasonably estimated based on the information available to the transferor. For each blend component of the fuel, the transferor must provide the recipient information pursuant to section 95491.1(b) of the LCFS regulation.

The reporting entity must rely on the information provided via PTD to account for the fuel blend levels for LCFS reporting. If the blend levels are not known or cannot be reasonably estimated by the transferor, then the PTD must clearly state so.

Example

A marketer “ABC Fuels Corp.” purchases 20,000 gallons of unlabeled ULSD below-the-rack, without a LCFS obligation, and ends up diverting 10,000 gallons of that product to a retail station in Arizona via truck during July 2024. What must be reported in the LCFS in this case?

In the Q3 2024 report, ABC Fuels Corp. must report a purchase without an obligation of the 20,000 gallons of ULSD from the upstream entity which passed along the title of the fuel.

In this case, ABC Fuels Corp. is the entity responsible for reporting the export pursuant to section 95483(a)(4)(C).11 Therefore, in the same report, ABC Fuels Corp. must report the 10,000 gallons of the product they trucked to Arizona as an export transaction. 

Because the ULSD exported was unlabeled, ABC Fuels Corp. must use the default blend levels provided in the table above for Q3 2024 and relevant substitute pathways for applicable volume of the fuel portion. The following volumes would be reported using the "Export" transaction types:

• 1All citations to the LCFS Regulation are found in Title 17, California Code of Regulations (CCR), sections 95480-95503.
• 22021 data was used to calculate 2023 substitute pathway CI values.
• 32022 data was used to calculate 2024 substitute pathway CI values.
• 4Contact staff for questions related to estimating blend levels.
• 5Based on the data reported under E85 test program exemption (TPE) for 2021.
• 6ab Calculated based on 2021 ADF data.
• 7Calculated based on 2021 LCFS data.
• 8Based on the data reported under E85 test program exemption (TPE) for 2022.
• 9ab Calculated based on 2022 ADF data..
• 10Calculated based on 2022 LCFS data.
• 11ab "Designation of a Fuel Exporter. Entities responsible for reporting exports of fuel that has been previously reported in the LRT-CBTS are identified below: (A) When the fuel is sold or delivered above the rack for export, the entity holding title to the fuel as it crosses the California border on its way toward the first point of sale/delivery is responsible for reporting the export in the LRT-CBTS. (B) When the fuel is sold across the rack for export, the entity holding title to the fuel as the fuel crosses the rack is responsible for reporting the export in the LRT-CBTS. (C) When the fuel is diverted out-of-state below the rack, the entity holding title to the fuel, as it crosses the California border, is responsible for reporting the export in the LRT-CBTS."