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AB-2797 Decarbonizing Fuels Incentive

Introduced by Assembly Member Petrie-Norris (Coauthors: Assembly Members Cunningham, Flora, Gray, Grayson, Lackey, Mayes, Valladares, Villapudua, and Waldron) (Coauthors: Senators Hurtado and Newman)

This bill establishes the Carbon Neutrality Fund (Fund) and requires the California Department of Tax and Fee Administration to make specified “incentive payments” to a transportation fuels vendor based on the carbon intensity of fuel sold. This bill would complement the existing Low Carbon Fuel Program by providing additional incentives for the transition to deep decarbonized fuels and a successful transition away from high carbon fuels.

POSTED: May 11, 2022

STATUS: Assembly Appropriations, hearing 5/19


Thoughts for consideration:

· A coalition of environmental justice groups argued that this bill “would direct significant funding toward a false solution to California’s mandate to reduce greenhouse gas emissions from the transportation sector....Instead, [$500 million] could be spent to accelerate zero emission transportation technologies.”

· Assembly Transportation Committee’s analysis of this bill, “This bill provides a minimal benefit to fuel producers whose fuels are already incentivized by the Low Carbon Fuel Standard. This bill will likely incentivize mostly compressed natural gas and liquefied natural gas, as those are the only fuels...that currently have significant volumes meeting the CI standards of the bill.”

· By the Assembly’s own analysis, this bill spends money with no apparent benefit to the state.


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