CALIFORNIA JUDGE FINDS STATE?EUR(TM)S LOW CARBON FUEL STANDARD UNCONSTITUTIONAL

DECEMBER 2011

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(Posted Fri. Dec 30th, 2011)

Dec. 30: A judge in Federal District Court in Fresno, California, has sided with America's ethanol industry in ruling that the State of California's Low Carbon Fuel Standard (LCFS) is unconstitutional. Judge Lawrence J. O'Neill agreed with the arguments that the LCFS is in violation of the Commerce Clause of the U.S. Constitution.

 

“This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state’s border,” said National Corn Growers Association President Garry Niemeyer. “Corn farmers are good stewards and advocates for thoughtful, fair strategies that will improve our environment through the advancement of biofuels. We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions.”

 

On December 24, 2009 the Renewable Fuels Association and Growth Energy filed suit asserting that the California LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states. NCGA contributed funding in support of the suit.

 

The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct. The original filing notes that "the LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security. One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS."

 

On this claim the Court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the Court issued an injunction. Judge O'Neill also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.