Bergeson & Campbell, P.C.

Low carbon fuel bill passed in Oregon senate

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On February 26, 2015, the Oregon State Senate passed Senate Bill 324 (SB 324), a measure that would require fuel producers to reduce the amount of carbon in car and truck fuels. If passed by the Oregon House of Representatives, SB 324 will implement a low-carbon standard in the state of Oregon. The measure is modeled on California's fuel standard, and would require fuel importers to cut the carbon in fuels by 10 percent from 2016 to 2025. This would result in a three percent reduction of the total emissions in Oregon. The fuel standard could be met through increasing the percentage of alternative fuels being blended into products, or by using more advanced biofuels to replace current alternative fuels that are already being blended into fuels. If the fuel companies are not able to blend to reach the proper low-carbon standard, they will have to buy credits to offset the excess carbon in their fuels. Carbon credits could be created and sold by any Oregon-based public or private entity that is cutting transportation-related carbon emissions. This broad rule leads to uncertainty in what the cost of carbon credits will be, and could lead to higher fuel prices. The Oregon Department of Environmental Quality will be authorized to stop or slow down the low-carbon standard if the price of gasoline increases substantially as a result of the program.

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