The California Air Resources Board on Thursday adopted a controversial low carbon fuel standard that, while well received by environmental groups, has upset the oil industry and biofuel companies alike.

That's because the standard includes rules for adding the greenhouse gas emissions that could come from land use changes driven by increasing the cultivation of crops to make biofuel.

Scientists who support measuring such land use changes – such as emissions that come from cutting down Amazon rainforest to grow crops to replace those that will be made into biofuel in the United States – say they're real and must be measured.

But biofuel backers say including those impacts will saddle biofuels with a carbon emission measurement that will make them unattractive to the refiners that blend them into gasoline and diesel fuel. Such measurements shouldn't be included unless the indirect impacts of other fuels are included as well, they say.

In October, 25 biofuel company executives and well-known biofuels investor Vinod Khosla sent a letter to CARB laying out those concerns (see California Fuel Standards Create Biofuel Worries). Thursday's hearing heard more comments on the controversy.

"Indirect effects are present in all sorts of fuels. In order to apply them to one fuel, we need to apply them to all," Bill Coleman, general partner with Mohr Davidow Ventures, said in testimony. His firm has backed biofuel companies including Zeachem, Catilin and OPX Biotechnologies. 

Similar concerns were set forth by General Wesley Clark, former Presidential candidate and co-chairman of biofuels group Growth Energy, in a letter to the board.

"Adopting an LCFS that selectively applies one standard for biofuels and another for all other fuels, including gasoline, is not equitable, would cripple the ethanol industry and all but guarantee America's continued dependence on fossil fuels," Clark wrote.

Board Chairwoman Mary Nichols replied to Clark in a letter that pledged to research land use impact of all transportation fuels and use future U.S. and European Union land use standards to adapt the rule in coming years, among other concessions, Reuters reported Thursday.

The board also agreed during Thursday's hearing to review the science behind the indirect land use calculations. The standard aims to reduce the greenhouse gas impact of fuels burned in the state by 10 percent by 2020.

Oil industry groups have also protested the rule. California oil producers and refiners, represented by the Western States Petroleum Association trade group, have asked the board to delay a decision until more research can be done on its effects.

But groups including the Environmental Defense Fund and the Union of Concerned Scientists came out in support of the rule.

"If we do not account for these emissions, the standard could result in more pollution than if we continued to rely on gasoline and diesel," Patricia Monahan, director of the Union of Concerned Scientists' (UCS) Berkeley office, said in a prepared statement Thursday. "The biofuel industry's call for 'sound science' is dishonest."

Controversy over the rule has been amplified by the fact that California's rule - the first in the nation to place limits on greenhouse gas emissions from transportation fuels -could be used as a template for national fuel policies.

President Barack Obama has also called for a national low-carbon fuel standard to help cut greenhouse gas emissions more than 80 percent by 2050, and a draft version of an energy and climate bill introduces by House Democrats last month also contained such a proposal (see House Energy Bill Draft: Cap-and-Trade Included).

The Environmental Protection Agency earlier this month also issued a proposed finding that could move the government closer to regulating manmade greenhouse gas emissions as a pollutant (see EPA Says GHG Emissions Pose Health, Nat's Security Risks).

The standard is part of the state's efforts to implement the California Global Warming Solutions Act of 2006, which requires the state to cut emissions to 1990 levels by 2020 (See California Offers Plan to Clear the Air).

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