This latter requirement was probably written by a political aide with only a cursory knowledge of organic chemistry. Biodiesel and ethanol are not low-carbon fuels and have just as much carbon as petroleum fuels. What it is that they are, when blended into petroleum fuels, is a way to reduce fossil fuel use. By using the biofuels they are recycling carbon that is already in the atmosphere, rather than releasing carbon from the earth. While all of this is a step in the right direction, it still does nothing to address the demand side of the equation. As long as customers are still looking for larger more powerful vehicles, car makers will want to build them something they will buy.
[Source: US Senator Diane Feinstein]