California Fuel Standard Fairness Questioned by U.S. Judges

California’s low-carbon fuel standard, which complements the state’s first-in-the-nation economy-wide cap and trade program, appears to favor in-state fuel producers over Midwest ethanol makers, two U.S. appeals court judges said.

Two members of a three-judge panel questioned state lawyers today about why the standard is tougher on ethanol produced in the Midwest and whether California’s method of assessing a higher “carbon-intensity” for Midwest ethanol because of the energy expended to make and then transport it to California was unfair to out of state producers.