(1) What Major Regulatory Updates Affect LCFS Compliance in 2026?
The amendments adopted in July 2025 introduced the most significant changes to the LCFS program since 2020. These updates were the result of a multi-year CARB rulemaking effort involving public workshops, community meetings, modeling updates, and board hearings. With the amendments now in effect, 2026 is the first full compliance year operating entirely under the new structure.
The amended regulation includes updated carbon intensity benchmarks, sustainability provisions applicable to crop-based feedstocks, revised rules for hydrogen and biomethane pathways, credit true-up, invalidation and deficit obligation calculations, third-party verification requirements for electricity crediting, and a shift to CA-GREET 4.0 for new pathway applications and pathway reports. CARB has continued issuing updated FAQs and guidance documents to support implementation, but the July 2025 amendments remain the most recent formal regulatory action guiding LCFS compliance today.
(2) How Do the Updated CI Benchmarks Affect Credit Generation in 2026?
The CI benchmarks adopted in 2025 introduced a sharp step-down for both gasoline and diesel to ultimately reach a 90% CI reduction from 2010 levels by 2045. These updated CI standards now apply to all 2026 reporting. Key changes include:
CI Benchmark Reductions Now in Effect:
- Gasoline benchmark: decreased from 84.52 → 75.16 gCO₂e/MJ
- Diesel benchmark: decreased from 85.38 → 80.17 gCO₂e/MJ
Beyond the immediate step-down (a 9% increase in stringency from the beginning of 2025 to the end of 2025), the annual tightening of CI standards through 2045 will reshape credit generation for renewable fuels supplied in California.
Implications for Credit Generation
As benchmarks become more stringent, fuels such as ethanol, biodiesel, and renewable diesel may shift from credit-generating to deficit-generating in the 2030s. The regulation includes an Auto-Acceleration Mechanism that can further tighten standards if credit bank conditions indicate oversupply.
These benchmark updates reset the starting point for 2026 compliance and will influence the relative credit generation potential of all renewable fuels.
What Is the Auto-Acceleration Mechanism?
The Auto-Acceleration Mechanism is a provision in the amended LCFS regulation that allows CARB to automatically tighten CI standards beyond the scheduled step-downs if program credit bank indicators show persistent oversupply. In practice, this means CI benchmarks may decline faster than planned when credit balances remain high, increasing deficit obligations for regulated parties.
(3) What Feedstock and Sustainability Requirements Apply for 2026 Reporting and Beyond
The amended regulation includes several updates that apply directly to biofuel producers and importers in 2026:
- Palm oil and palm-derived feedstocks remain ineligible for LCFS credit generation.
- Sunflower oil is now explicitly eligible as a feedstock under the amended regulation.
- Corn stover and forest residue are designated as specified source feedstocks, requiring chain-of-custody documentation rather than sustainability program compliance.
- A new 20% crediting limit applies to crop-based biomass diesel supplied by a first reporting entity on a company basis, including both production and imports; fuel volumes reported above this threshold are assigned either the benchmark CI or the certified pathway CI value, whichever is higher.
In addition to feedstock eligibility updates, the amendments establish new sustainability requirements that phase in over several reporting cycles:
- 2026 AFPR and all new pathway applications: geospatial farm boundary data and sustainability attestations required.
- 2028 AFPR reporting: third-party sustainability certification becomes mandatory.
- 2031 AFPR and onward: full sustainability criteria apply.
(4) How Do the Updated Hydrogen Provisions Affect Pathway Modeling and Eligibility?
Hydrogen pathways operate under a revised framework that standardizes CI modeling and updates eligibility requirements for renewable content and book-and-claim use. The amended regulation establishes new modeling expectations that influence projects coming online in future years. Key updates include:
Hydrogen Pathway Updates Now in Effect
- The updated Tier 1 hydrogen calculator replaces prior lookup tables and establishes standardized CI modeling approach.
- Temporary pathways provide credit generation opportunity during hydrogen pathway certification process.
- Book-and-claim accounting for pipeline injected hydrogen and for renewable electricity and RNG used to produce hydrogen.
Longer-Term Eligibility Requirements
- 2030: Hydrogen dispensed must contain at least 80% renewable content or be supported by CCS to remain eligible for LCFS crediting.
- 2035: Fossil-derived hydrogen is eligible only if fully matched with renewable attributes or CCS.
As a result, hydrogen producers face a more flexible modeling framework today and clearer eligibility expectations for projects planned over the next decade.
(5) What Changes Should RNG Producers Expect Under the New LCFS Rules?
Several RNG-related provisions adopted in 2025 affect project viability and crediting generation opportunity in 2026 and beyond. Avoided methane crediting is now tied to the pathway certification date:
- Pathways certified before July 1, 2025, including temporary pathways, may claim three ten-year crediting periods.
- Pathways certified between July 2025 and December 2029 may claim two ten-year periods.
- Projects breaking ground after 2029 may generate avoided methane credits only until 2040.
The amended regulation also introduces a future deliverability requirement for RNG book-and-claim accounting. Beginning in 2041, and potentially earlier depending on certain market conditions, entities must demonstrate that physical gas flow from injection to dispensing occurs at least 50% of the time.
CA-GREET 4.0 also now applies to all new pathway applications, and the updated model includes several revisions relevant to RNG producers.
CA-GREET 4.0 Modeling Updates
- Distinct CI modeling methodology for biogas vs biomethane flaring
- Required annual lagoon cleanouts where schedules are unspecified
- Specified-source feedstock designation for food waste
These changes redefine the long-term revenue calculations for RNG projects and make crediting horizons a central factor in 2026 development and investment decisions.
(6) How will Electricity Crediting and EV Forklift Charging Reporting Work in 2026?
Electricity-related provisions under the amended regulation introduce new credit generation opportunities and reporting requirements for 2026. These changes affect utility equity programs, EV forklift crediting, and the applicability of verification requirements. Key updates include:
Electricity Crediting and Reporting Updates Now in Effect
- Administrative allowances: Expanded program requirements now apply for equity projects.
- Mandatory Metering for forklifts: Beginning with 2026 reporting, forklift electricity use must be metered, replacing prior estimation methods and standardizing reporting accuracy.
- Pending verifier guidance: CARB is expected to release additional verifier guidance for electricity pathways during 2026, and reporting entities should anticipate further clarification on documentation and verification expectations.
- Electric distribution utilities (EDUs): Must carry forward unspent equity funds and offer rate structures that support off-peak EV charging, encouraging more efficient electricity use.
These updates strengthen verification, expand eligible participation, and transition electricity crediting into a more standardized measurement framework.
(7) How Will Hydrogen Reporting and Infrastructure Pathways (FCI/HRI) Work in 2026?
Dispensed hydrogen must meet company-wide, weighted-average thresholds for carbon intensity (CI) and renewable content in order to remain eligible for LCFS crediting. These thresholds apply across all fueling stations registered under the same FEIN:
CI Requirement
- ≤ 150 gCO₂e/MJ before January 1, 2030
- ≤ 90 gCO₂e/MJ thereafter
Renewable Content Requirement
- ≥ 40% before January 1, 2030
- ≥ 80% thereafter
Infrastructure pathway requirements, including Hydrogen Refueling Infrastructure (HRI) and Fast Charging Infrastructure (FCI), were revised under the amended regulation. New deadlines determine when infrastructure projects must submit pathway applications in order to qualify for crediting.
Infrastructure Pathway Requirements
- Light- and medium-duty HRI/FCI applications must be submitted by December 31, 2030.
- Heavy-duty infrastructure pathway applications must be submitted by 2035.
- CARB removed the previous 1.5 cap on HRI credit generation.
These updates clarify investment timelines and allow developers to better forecast crediting potential when planning new charging or hydrogen refueling infrastructure.
(8) What Changes Should Fuel Pathway Reporters Expect Under the New LCFS Rules?
CARB has adopted a new credit true up procedure following the Annual Fuel Pathway Review (AFPR). Under the amended regulation, fuel pathway holders whose verified operational CI is lower than their posted CI may now receive the corresponding apportionment of additional credits. Formerly, credits generated in excess of the posted CI were deposited into the CARB buffer account
CARB has also revised the credit removal process applied after AFPR. Previously, fuel pathway holders whose verified operational CI exceeded their posted CI would lose credits in a 1:1 ratio.
Under the new rules:
- If the verified CI exceeds the posted CI but remains within the Margin of Safety (MOS) range, credits are removed at a 1:1 ratio.
- If the verified CI exceeds the posted CI beyond the MOS, credits are removed at a 4× ratio.
Please note that CARB has yet to define how fuel pathway holders who are not currently registered in the LRT-CBTS portal will be required to create accounts to receive or surrender credits associated with AFPR variances.
(9) What Should Reporting Entities Prioritize to Ensure Compliance in the 2026 LCFS Cycle?
With the amended LCFS framework now fully in effect, reporting entities should focus on several areas as they prepare for 2026 compliance. Updated CI benchmarks, new CI exceedance calculations, and transition to CA-GREET 4.0 directly influence LCFS credit positions. Key priorities include:
- Understanding the impact of updated CI benchmarks on credit and deficit outcomes.
- Applying CA-GREET 4.0 to new pathway applications and preparing for its use in CI exceedance evaluations.
- Meeting expanded verification requirements, particularly for electricity transactions.
- Updating documentation systems to support new sustainability attestations and feedstock tracking requirements beginning in 2026.
- Managing increased compliance exposure under the four-times deficit adjustment, which makes accurate CI modeling and the strategic use of a MOS essential for fuel pathway holders seeking to reduce the risk of CI exceedances during verification.
Focusing on these elements early in the compliance cycle will help entities manage exposure, maintain accuracy, and adapt to the evolving LCFS framework.
Trinity Consultants’ Mobile Source & Fuels (MSF) team provides technical and regulatory support to organizations navigating the updated LCFS framework. Our team includes specialists in CI modeling, LCFS pathway development, sustainability documentation, electricity crediting, biomethane and hydrogen compliance, and verification readiness. We partner with producers, importers, utilities, and fleet operators to interpret regulatory changes, assess compliance exposure, and align reporting systems with current LCFS requirements.
Please contact Alex Marcucci, Principal Consultant and Head of Fuels Compliance to discuss how these LCFS updates may affect your operations or to schedule a complimentary 30-minute consultation with our team.
