Low Carbon Fuel Standard (LCFS): How EV Charging Can Generate Value

An educational overview of how California’s Low Carbon Fuel Standard may create financial value for EV charging station owners.

What is the Low Carbon Fuel Standard?

The Low Carbon Fuel Standard (LCFS) is a California policy framework designed to reduce greenhouse gas emissions from transportation fuels by encouraging the use of lower-carbon alternatives.

Under this framework, fuels with a lower carbon intensity—such as electricity used to charge electric vehicles—may generate tradable credits based on their use.

Why LCFS matters for EV charging

Electricity used for vehicle charging can qualify as a low-carbon transportation fuel. When EV charging stations dispense electricity to vehicles, that energy use may translate into LCFS credits over time.

These credits can be monetized through market transactions with entities that require credits for regulatory compliance.

How LCFS credit value is generated

Potential credit revenue is influenced by two primary variables:

• The amount of electricity dispensed through EV charging stations
• The prevailing market price of LCFS credits

Higher station utilization generally leads to higher potential credit generation. However, LCFS credit prices are market-driven and may fluctuate over time.

Illustrative revenue estimates (example only)

*Examples shown for illustration only. Actual credit revenue depends on utilization, credit prices, and participation structure.

How LCFS value can be used

Revenue generated through LCFS credits is often used to:

• Offset ongoing operating and maintenance expenses
• Reduce total cost of EV charging ownership
• Support expansion of additional charging infrastructure

For higher-power charging installations, additional crediting mechanisms may apply, depending on how energy is dispensed and reported.

Ways to participate in LCFS-related value creation

Entities installing EV chargers generally consider one of three participation approaches.

Direct participation

Organizations deploying large numbers of chargers may choose to register directly and manage their own credit generation and sales.

• Greater control over credits
• Higher administrative responsibility

Assignment to charging vendors

Some site hosts assign future credits to EV charging vendors in exchange for:

• Discounted equipment pricing
• Reduced network or maintenance fees

This approach minimizes administrative involvement while still capturing economic value.

Participation through an aggregator

Aggregators pool credits from multiple charging sites and manage credit sales on behalf of participating entities.

• Lower administrative burden
• Revenue share based on agreed terms

Key considerations before participating

• Station utilization levels and growth expectations
• Administrative capacity and reporting requirements
• Contract terms with vendors or aggregators
• Market variability of credit prices

Summary:
The Low Carbon Fuel Standard creates an opportunity for EV charging station owners to generate additional economic value while supporting cleaner transportation. Understanding participation options early can help maximize benefits and reduce the long-term cost of EV infrastructure deployment.