SACRAMENTO – A federal appeals court earlier this week upheld California’s low-carbon fuel standard, ruling that it doesn’t discriminate against Midwest ethanol producers, Bloomberg reports.

Characterizing California’s law as “innovative,” the court ruled that the standard isn’t unfair just because it assigns a higher carbon intensity score to ethanol produced in the Midwest.

“We will not at the outset block California from developing this innovative, nondiscriminatory regulation to impede global warning,” the judges said in a 2-1 ruling. The panel remanded the case back to the trial court to determine whether the fuel standard’s purpose or effect is discriminatory.

The California Air Resources Board had petitioned the appellate judges to reverse a lower-court ruling that threw out parts of the carbon-fuel plan as unfair to out-of-state ethanol producers.

“This is a very good step for Californians and the fight against climate change,” said Dave Clegern, a spokesman for the air resources board. “We are pleased, on behalf of the people of California and its environment, that the court recognized the importance of this program and that the Low-Carbon Fuel Standard remains in effect.”

In 2011, farm and oil industry groups sued to overturn the standard. The appeals court temporarily reinstated it after a district judge ruled that by assigning a higher score to out-of-state ethanol, California was unconstitutionally interfering with interstate commerce.

California assigns a higher carbon intensity score to ethanol produced in the Midwest because officials maintain while the fuel is chemically and physically identical to ethanol produced in California, corn farming, transportation and processing produces more emissions.