Proposed amendments to the Low Carbon Fuel Standard (LCFS) are now in effect, following approval by the Office of Administrative Law (OAL) on June 27, 2025 The updated rules, which took effect on July 1, are designed to accelerate the transition to cleaner fuels, expand zero-emission infrastructure, and help California meet its climate and air quality goals.
Liane Randolph, Chair of the California Air Resources Board (CARB) emphasized the broader benefits of the program in CARB’s announcement, stating, “Implementing the July 1 effective date for the LCFS provides critical certainty to industry, as well as the LCFS credit market. But often lost in the noise around this program are our primary reasons for approving it: better health for Californians, our economy and the environment.” She also noted that despite predictions of dramatic fuel price increases, gasoline prices remained stable—even lower than the same time last year—demonstrating the market’s resilience and the program’s effectiveness.
The investment market responded positively to the regulatory certainty provided by the OAL’s approval. Credit prices remain steady, and stakeholders across the clean fuels sector welcomed the clarity and direction.
The LCFS has already driven over $4 billion annually in private investment, displaced more than 30 billion gallons of petroleum, and helped reduce the carbon intensity of California’s fuel mix by nearly 13%. The newly adopted amendments aim to deepen these impacts, targeting a 30% reduction in carbon intensity by 2030 and 90% by 2045. For renewable natural gas (RNG), the LCFS has been a powerful catalyst for production growth in California and has created a predictable financial incentive for producers to invest in and scale up RNG projects.
California now has the greatest number of RNG projects of any state, at 223. In-state supply of RNG to natural gas vehicles has grown from 7% of demand in 2021 to 23% in 2024. For comparison, California produces only 10% of the fossil gas and 23% of the oil that we consume. This market-based approach has helped RNG become the dominant fuel in California’s natural gas vehicle sector, accounting for 99% of all on-road fuel used in natural gas vehicles in California in 20241. The LCFS supports the development of this cleaner, more resilient fuel supply that reduces methane emissions and supports the state’s broader climate and air quality goals.
As California continues to lead on climate policy, the LCFS remains a cornerstone of its strategy to reduce emissions, protect public health, and foster economic growth through clean energy innovation.