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A Tale of Cane and Corn: Evaluating Compliance Opportunities for Brazilian Sugarcane Ethanol under a Low Carbon Fuel Standard (LCFS)

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It is the purpose of this paper to investigate the potential for Low Carbon Fuel Standard (LCFS) compliance to be achieved using Brazilian Sugarcane ethanol. This was first done finding the true effects of the policy in California to date and then by modelling abatement costs and feasibility under various scenario assumptions. Since its implementation in California, it was found the policy has incentivized relatively higher Sugarcane ethanol blends (5.4% higher relative to the control) and increased E85 infrastructure to the point where E15-E20 blends could be possible in the near future. The model which this paper proposes then found that if E15 blending is possible by 2020, full compliance could be achieved via Sugarcane ethanol blending at a relatively low compliance cost ($112/TonCO2), with only minor improvements in Biodiesel blends and credit banking necessary. If the state is still constrained by the E10 blend wall in 2020, compliance will be more difficult, requiring additional investments in other low-CI fuels as well as B15-B20 Biodiesel blends. Compliance in 2030 will be costlier, and, even at E20 blending, would still require increased credit banking from other low-CI fuels as well as higher Biodiesel blends (B30) and an LCFS credit price of at least $202/TonCO2. The marginal abatement costs of Sugarcane ethanol blending, are, however, highly subject to RFS RIN pricing, as well as CARBOB prices and average Carbon Intensity values for Sugarcane ethanol.

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2018-05-09

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A Tale of Cane and Corn: Evaluating Compliance Opportunities for Brazilian Sugarcane Ethanol under a Low Carbon Fuel Standard (LCFS)

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dissertation or thesis

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