It's the beginning of 2009 and gas prices are on their way back up. Perhaps more importantly, 2020 is not that far off. That is the year -- according to AB 32 -- that California is expected to reduce its carbon emissions to 1990 levels, growth in the state's population notwithstanding.

That challenge was the focus of the Target 2030 Conference held last week in Sacramento. The conference brought together policymakers and technology companies to discuss and demonstrate ways in which that challenge can be met.

A reality that was apparent from those in attendance was that the car is not going away anytime soon, so the question became how to reduce the impact cars have on the environment and manage congestion. There was a lot of talk about measuring performance with a new metric--person-miles traveled as opposed to vehicle miles traveled.

What the industry needs, representatives said, is a level playing field, a consistent regulatory environment and government to spur innovation without picking winners. Some capital would be nice, too.

A number of vehicles running on a variety of fuels were available for ride and drive at the conference. The California Department of General Services was there with one of its flex-fuel vehicles. Other vehicles included a utility truck, a bus and several others.

Solazyme, a San Francisco-based biofuel manufacturer, demoed a Jeep running on its biodiesel produced from algae. The company has also tested its fuel in a Mercedez Benz diesel.

Solazyme's biodiesel is a "drop-in replacement" for traditional diesel, and it burns with a lower carbon footprint than diesel, a company spokesman said. In fact, the car used in the demo was purchased used online from Nevada and the car has run on Solazyme biodiesel for about a year. The Jeep gets 21-22 mpg on the highway.

It takes days for Solazyme to grow algae in the dark as compared with algae grown in sunlight. And that algae is 50 to 80 percent oil. The only byproducts are algae and water, which can both be reused.

The algae can be fed a variety of foodstocks including switchgrass, woodchips, molasses or any kind of sugar.

The company recently raised $70 million in investments and has passed proof of production, according a company spokesman. It has done tests of the fuel with the Department of Defense and recently began producing jet fuel. Just like traditional crude oil, Solazyme's crude can be refined into oil similar to olive oil, cosmetics as well as fuel, which is the lowest grade use of the crude.

The company is planning to achieve economies of scale allowing it sell its crude for between $40-80 a barrel in 24-36 months, Genet Garamendi, Solazyme vice president corporate communications said. It announced a distribution deal with Chevron back in 2008 and it is currently searching for a dedicated refinery facility.

Propel, another promising company profiled at the conference, is building a network of alternative fuelling stations and provides a system that tracks and displays the reductions in carbon emissions from the use of alternative fuels purchased at the company's fueling stations. In doing so, Propel's CleanDrive system opens the door for users to comply with growing governmental standards for the use of renewable fuels and carbon emissions reduction such as California's 2020 Targets.

As states such as California continue to develop carbon emissions reduction targets, products such as CleanDrive will be essential to help track and report on emissions reductions.

With all that, perhaps the biggest step toward meeting California's climate change goals would come if the legislature mandated the use of clean diesel instead of gasoline in cars driven on the state's roads.