Schwarzenegger signs Calif. carbon emissions cut

SACRAMENTO, California (Reuters) - California Gov. Arnold Schwarzenegger signed an executive order on Thursday to reduce carbon emissions from transportation fuels, a move intended to widen the development and use of alternative vehicle fuels in the nation's biggest state.

The order, the first of its kind in the United States, sets a standard to cut carbon levels in vehicle fuels by at least 10 percent by 2020.

It also will implement a state law adopted last summer that mandates state emissions caps to reduce greenhouse gases linked to global warming by 25 percent by 2020.

In a signing ceremony outside the state capitol, Schwarzenegger said new alternative fuels such as ethanol blends, compressed natural gas and hydrogen will help to stabilize prices at the pump and ease dependence on foreign oil.

The Republican governor was surrounded by some new alternative-fueled taxicabs, SUVs and other vehicles, state lawmakers, and representatives from environmental groups, fleet vehicle owners, and alternative fuel producers, including energy major Chevron Corp..

Rick Zalesky, Chevron's vice president for biofuels, said Chevron "pledges its full commitment and support" to help California meet the program goals.

The company has alternative fuel programs under way, including three fueling stations for hydrogen-powered cars and research and development projects with the University of California, Zalesky said.

"California is the nation's largest market for transportation fuels," Roland Hwang, vehicles policy director for the Natural Resources Defense Council, said. "So what the low-carbon fuel standard basically is doing is creating a market, and what investors and developers need is a market and a certainty that the marketplace will be there if they make the investment."

California's Air Resources Board will put the new fuel regulations into effect no later than December 2008.

The Air Resources Board is working with the state's Environmental Protection Agency and the California Energy Commission to work out the details of the new regulations.

(Additional reporting by Jenny O'Mara in Sacramento)