California Biodiesel Alliance News
California's Biodiesel Industry Trade Association
ACTION ALERT: With 11:59 pm eastern time today as the deadline to get comments to Administrator Pruitt at the U.S. EPA on their proposed freeze and cut to RFS RVOs, we are making a last push to make our voices heard.
Please click here to quickly send comments through the NBB's website.
You can also write your own and email them (a-and-r-Docket@epa.gov) with
this as the subject: ID: EPA-HQ-OAR-2017-0091 or submit them online here.
CBA's RFS comment letter
is included in this issue. Also included is Doug Smith's testimony
from the August 1st hearing in D.C.
on behalf of the National Renderers Association, CBA, and his company, Baker Commodities.
Several articles provide key updates on CBA's policy efforts in the state. W
e are happy to include two
from the federal front detailing favorable rulings on the RFS and biodiesel imports and one about research that may lead to some lowered biodiesel carbon intensity scores under the LCFS.
With the Cap and Trade fight behind it, ARB has renewed its new LCFS rulemaking. CBA is finalizing comments, which are due September 4th.
See the Industry and Policy sections below for more on this and other key issues.
SAVE THE DATE
CBA'S SEVENTH ANNUAL CALIFORNIA BIODIESEL CONFERENCE
MARCH 1, 2018 -- CAPITOL BALLROOM, SACRAMENTO
Back Issues of this newsletter are available in the Archives on our Members Only webpage.
Need for In-State Biofuels Incentive Funding
Discussed at Committee Hearing on Low Carbon Fuels
On August 22nd in Sacramento, Assemblymember Quirk, Chair of the Select Committee on California's Clean Energy Economy, held a legislative hearing entitled "Low Carbon Fuels: Methods Procurement and Production." The hearing provided an opportunity for education on key points including that biofuels provide 88% of LCFS credits and that only 13% of biofuels generating LCFS credits are produced in-state.
CBA President Russ Teall's presentation included those points and stressed the need for in-state production incentives for biofuels allocated through the state's Greenhouse Gas Reduction Fund (GGRF). The 2012 Bioenergy Action Plan, which includes biodiesel, was discussed at the hearing, and there was agreement that it needs updating. CBA believes that the plan could provide a coordinated focus for state agencies with the correct approach. CBA will follow up with Assemblymember Quirk on a list of specific issues impacting biodiesel.
NEXT STEPS ON THE GGRF BUDGET
The Biofuels Initiative Coalition, with CBA lobbyist Louie Brown at the helm, is discussing next steps on the GGRF budget. Unfortunately, the Senate Pro Tem's plan to invest $1 billion in programs
that reduce or eliminate diesel emissions has no mention of biofuels. The Assembly is expected to present their plan around Labor Day, and the Governor's plan is expected very soon. The deadline for all legislation is September 15th. CBA is involved at all levels, including engaging by phone and email in a lobbying effort aimed at key decision makers.
CAP AND TRADE AUCTION SUCCESS
On the heels of last month's legislative victory that extended the state's Cap and Trade program to 2030, the program passed its first test with flying colors this month. At August's auction, not only were all of the available emission permits sold, but prices reached the highest levels in the program's five year history. O
ver $640,000,000 were raised for the GGRF. With the requirement that all proceeds be spent to lower carbon emissions in the state, this success bodes very well for the state's ongoing ability to fund key programs that make the program a model for other states and nations.
CBA Comments Update CEC on Key Industry Developments
Broader Funding Request Includes Terminal Storage and Blending Infrastructure
This month, CBA submitted comments to the California Energy Commission (CEC) in response to the CEC's July 7th staff presentation on the IEPR - Transportation Energy Demand Forecast. The Integrated Energy Policy Report (IEPR) is California's energy policy document and serves as a guide to state agencies on energy issues.
The comments began by letting CEC commissioners and staff know that on July 20 of this year, the California Air Resources Board (ARB) announced that it had certified a unique biodiesel NOx mitigation additive - VESTA™ 1000 ("VESTA") - that will make possible the expanded use of biodiesel in California up to B20 blends in compliance with the state's Alternative Diesel Fuel (ADF) regulation.
Consistently involved as a participant on the CEC's Advisory Committee for the AB 118 Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP), CBA has worked to increase the funding available for biodiesel through that program. With a broader scope, CBA's IEPR comments included a request for CEC investments in storage and blending infrastructure to address the primary barriers to increased blending at distributor bulk fuel terminals and racks.
Additionally, CBA continued its long-standing encouragement of expanded funding for research and development of in-state purpose-grown energy crops for use as low carbon biofuels feedstocks.
Because CEC works closely with ARB, comments also stressed the importance of equitable vetting of all participants in the LCFS value chain. Proper pathway verification and follow up of all program participants were cited as crucial to the success of the LCFS program.
Details and information on the report, which is currently being developed, are here
CBA Joins National Industry in Opposing Proposed RFS Volumes
COMMENTS ON THE RENEWABLE FUEL STANDARD PROGRAM
Docket ID EPA-HQ-OAR-2017-0091
The California Biodiesel Alliance (CBA) appreciates the opportunity to comment on the 2018 and 2019 Standards for the Renewable Fuel Standard Program (referred to herein as "RFS Proposal"). CBA is California's
not-for-profit biodiesel industry trade association, representing the state's biodiesel producers and a broad range of stakeholders.
CBA endeavors to increase awareness about biodiesel as California's leading and widely available advanced biofuel that delivers significant economic, environmental, and energy diversity benefits throughout the state.
In submitting this letter, CBA wishes to state our support for the comments of the National Biodiesel Board in this matter. Specifically, we stand with the national biodiesel industry in unequivocal opposition to the proposed freeze of the Biomass-Based Diesel Renewable Volume Obligation ("RVO") at 2.1 billion gallons for 2019 and to cutting the 2018 Advanced Biofuel RVO to 4.24 billion gallons from 4.28 billion gallons for 2017. CBA and its members feel strongly that the demand for low-carbon renewable transportation fuels in California and across the country more than justifies a moderate increase in both the Biomass-Based Diesel and Advanced Biofuel numbers. We respectfully request that EPA's final rule reflect a moderate increase to 2.75 billion gallons for Biomass-Based Diesel and 5.25 billion gallons for Advanced Biofuel.
The continued growth of the RFS is in line with the Administration's America First policy, creating good, family supporting jobs across the country in a wide array of industries ranging
from agriculture to aerospace. In fact, the national biomass-based diesel industry currently supports about 64,000 jobs with
3,200 new jobs created for every 100 million additional gallons
of biodiesel production.
The RFS is also a huge factor in energy security, as evidenced by the massive use of renewable fuels by our brave branches of the military. Conversely, a reduced or stagnated RVO has the substantial likelihood of resulting in reduced domestic production and job loss. In fact, four of California's eleven biodiesel plants closed their doors as a result of poor market conditions in 2014. Other plants scaled back production, laid off workers, deferred expansion projects, and lost investment opportunities.
The current RFS proposal would reverse the long-term bipartisan policy of growing advanced biofuels that Congress intended when it created the RFS program. The proposed rule seeks to lower the advanced biofuel volume below the level EPA has determined is "reasonably attainable," citing compliance costs, potential for diversion of feedstocks and the lapsed tax credit. As discussed at length in NBB's comments, these arguments are simply inappropriate and factually inaccurate. The entire purpose of the RFS was to stimulate growth of the renewable fuel market and to encourage infrastructure investments to reduce costs along the way. The program - especially the biomass-based diesel portion-has been a huge success.
In California, nearly all of the major terminals have installed biodiesel blending infrastructure and smaller operations are following suit. The State of California Energy Commission has also helped stimulate domestic production with grants. As a result of these and other efforts to grow the market, we have witnessed a staggering 250% growth in the market since 2013, including years in which the tax credit was lapsed. Given the mandated increase in carbon reduction from 3.5% in 2016 to 10% in 2020, it is reasonable to expect California's consumption of biomass-based diesel to at least double to reach 820 million gallons in 2020.
LCFS Volumes as Reported by the California Air Resources Board
We strongly urge the EPA to revise the RFS proposal in the final rule for both Biomass-Based Diesel and Advanced Biofuels to match the potential of the biodiesel industry to increase production given current and projected capacity. We ask that the advanced biofuels volumes be set at a minimum of 5.25 billion gallons for 2018, an increase from the proposed 4.24 billion gallons. The 2019 RFS for biomass-based diesel should be at least 2.75 billion gallons, an increase from the proposed 2.1 billion gallons. Further, we believe that Biomass-Based diesel, as the largest single source of advanced biofuels in our country today with the lowest of compliance, should be grown by hundreds of millions of gallons each year.
LMC International, The Economic Impact of the Biodiesel Industry on the U.S. Economy, June 2016, EPA-HQ-OAR-2015-0111 ("LMC Jobs Study").
The four plants that closed were: Yokayo Biofuels, Blue Sky Biofuels, Promethean Biofuels and Bently Biofuels.
National Renderers Association)
Biodiesel Renewable Fuel Standard Volumes Should be Increased
Ample Rendering Feedstock Supplies Seen in Future, Cleaner Air, More Jobs
Washington, D.C. - August 2, 2017 - The rendering industry is ready to supply increased volumes of feedstocks for biodiesel production if the Environmental Protection Agency (EPA) increases its Renewable Fuel Standard (RFS) volumes in 2018 and 2019, said Doug Smith of Baker Commodities in testimony at the agency's public hearing August 1 in Washington, D.C.
Higher RFS volumes beyond EPA's proposal will further increase U.S. biodiesel production, Smith explained. "A stronger RFS will grow U.S. jobs, clean our air by reducing emissions, promote domestic energy production and reduce imports of foreign biodiesel."
The biodiesel industry currently uses 32 percent of the billions of gallons of rendered animal fats and used cooking oil produced each year in the U.S. Rendering is a green industry that sustainably upcycles used cooking oil, animal fats, yellow grease, and brown grease into feedstocks for biodiesel and renewable diesel.
Smith testified on behalf of the National Renderers Association, the California Biodiesel Alliance, and Baker Commodities of Vernon, California.
For consumers, substitution of biodiesel and biodiesel blends is the easiest way to achieve immediate reductions in diesel emissions. In addition, biodiesel consumers and blend users save money, making biodiesel a cost-effective, renewable alternative fuel," Smith explained.
EPA has greatly underestimated the potential of the biodiesel industry to increase production given current and projected capacity, said Smith. He urged EPA to set the RFS for advanced biofuels in 2018 at a minimum of 5.25 billion gallons, an increase from the 4.24 billion gallons proposed by the agency. The 2019 RFS for biomass-based diesel should be at least 2.75 billion gallons, Smith recommended, above the 2.1 billion gallons advocated by EPA.
About 3,200 new jobs are created for every 100 million additional gallons of biodiesel production. The rendering industry also provides thousands of full-time jobs across the country in rural and urban areas.
Increases in RFS volumes will encourage the confidence to invest which creates jobs here at home and contributes to overall U.S. economic growth. Higher RFS volumes will also continue to stimulate important new innovation in feedstock development. If higher RFS volumes are not adopted by the EPA, domestic production may stagnate and foreign biodiesel imports will continue to rise.
NBB Fair Trade Coalition Succeeds in Latest Stage of Biodiesel Import Case
Commerce Department Finds That Argentina and Indonesia
Unfairly Subsidize Biodiesel They Export to US
August 22, 2017
WASHINGTON, D.C. - The National Biodiesel Board (NBB) Fair Trade Coalition won a preliminary countervailing duty determination from the Commerce Department regarding subsidized biodiesel imports from Argentina and Indonesia. The Commerce Department found that Argentina and Indonesia provide subsidies to their biodiesel producers in violation of international trade rules. In addition, Commerce found "critical circumstances" to address the post-petition surge of imports from Argentina, paving the way for the imposition of retroactive duties, going back to May 2017.
"The Commerce Department has recognized what this industry has known all along - that foreign biodiesel producers have benefited from massive subsidies that have severely injured U.S. biodiesel producers. We're grateful that the Commerce Department has taken preliminary steps that will allow our industry to compete on a level playing field," said Doug Whitehead, chief operating officer of the National Biodiesel Board.
As a result of Commerce's ruling, importers of Argentinian and Indonesian biodiesel will be required to pay cash deposits on biodiesel imported from those countries. The cash deposit rates range from 50.29 to 64.17 percent for biodiesel from Argentina, and 41.06 to 68.28 percent for biodiesel from Indonesia, depending on the particular foreign producer/exporter involved. Cash deposit requirements will be imposed when this preliminary determination is published in the Federal Register sometime next week. In addition, based on Commerce's "critical circumstances" finding, these rates for Argentina will apply retroactively 90 days from the date of the Federal Register notice.
The NBB Fair Trade Coalition filed these petitions to address a flood of subsidized and dumped imports from Argentina and Indonesia that has resulted in market share losses and depressed prices for domestic producers. Biodiesel imports from Argentina and Indonesia surged by 464 percent from 2014 to 2016, taking 18.3 percentage points of market share from U.S. manufacturers. Imports of biodiesel from Argentina again jumped 144.5 percent following the filing of the petitions. These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused U.S. producers to pull back on further investments to serve a growing market.
Between the preliminary and final determinations, the Commerce Department will audit the foreign producers and governments to confirm the accuracy of their data submissions. Parties will file briefs on issues arising from the agency's preliminary countervailing duty determinations, and the Commerce Department will hold a hearing. Preliminary determinations in the companion antidumping investigations are due to be issued in October. Final Commerce determinations will be issued later this year, or in early 2018, with a final determination by the International Trade Commission soon thereafter
D.C. Court of Appeals Finds in Favor of NBB's Arguments
in 2014-16 RFS Litigation
Americans for Clean Energy, et al., v. Environmental Protection Agency
July 28, 2017
WASHINGTON, D.C. - The U.S. Court of Appeals for the District of Columbia Circuit released its decision regarding several questions related the Renewable Fuel Standard (RFS) for 2014-16. The court sided with NBB on the U.S. Environmental Protection Agency's (EPA) interpretation and use of its general waiver authority under the RFS statute. It also rejected continued attempts by the obligated parties to limit growth in biomass-based diesel, which NBB intervened on behalf of EPA.
"Today's decision from the D.C. Circuit is welcome reassurance that EPA has the authority to increase volumes of biomass-based diesel. We must do so to advance the goals of the law. And as co-petitioners to the general waiver authority argument, we were pleased to see the court agreeing with our arguments," said Donnell Rehagen, chief executive officer at the National Biodiesel Board.
Various groups were seeking to force changes to the fuel volumes required for compliance years 2014-16 and the biomass-based diesel volumes for 2014-2017. Several cases were consolidated into the one decided on today.
On the question of biomass-based diesel volumes, the court sided with NBB and EPA, rejecting the arguments by obligated parties that EPA did not have authority to increase the biomass-based diesel volume because it missed statutory deadlines. The court held that the agency had authority and acted reasonably.
NBB joined various ethanol groups on arguments related to EPA's general waiver authority. The court agreed with NBB and rejected EPA's interpretation of "inadequate domestic supply," finding it inappropriate to consider issues of demand.
The RFS - a bipartisan policy passed in 2005 and signed into law by President George W. Bush - requires increasing volumes of renewable fuels to be blended into the U.S. fuel stream. The law is divided into two broad categories: conventional biofuels, which must reduce greenhouse gas emissions by at least 20 percent, and advanced biofuels, which must have a 50 percent reduction. Biodiesel is the first advanced biofuel to reach commercial-scale production nationwide and has made up the vast majority of advanced biofuel production under the RFS to date.
Academic Study: Biodiesel Benefits Under-Valued for Years
New Article Improves Confidence in America's Advanced Biofuel
Jefferson City, MO - A new academic paper published in
Biotechnology for Biofuels
shows biodiesel's benefits are even better than previous models suggest. Updated modeling from Purdue University suggests the advantage of using biodiesel has been underestimated by 10 percent.
"This latest research verifies biodiesel is an ideal option to support American-made energy and renewable fuels," said Don Scott, National Biodiesel Board Director of Sustainability. "The more accurate the models become, the more clearly they show biodiesel's benefits."
Research has long supported the benefits of biodiesel in reducing wastes, supporting domestic jobs, and reducing harmful emissions. With all these proven advantages, the remaining question has become: How much biodiesel can we make and maintain each of these benefits? For nearly a decade, the U.S. Environmental Protection Agency (EPA), the California Air Resources Board (CARB) and a handful of scientific institutions have been trying to determine how major biofuel policies might impact land use around the world.
One theory had suggested that policies promoting biofuels will produce economic incentives that encourage farmers to plant more crops. Since federal policy does not allow biofuels from new cropland to participate in incentive programs, it is assumed that these additional crops add food and livestock feed to global markets. EPA and CARB have used computer models to predict this additional production in response to the economic signal from biofuels. If there are carbon emissions associated with creating new farmland, EPA and CARB follow this theory to add those estimated carbon emissions to the lifecycle of biofuels.
This conservative approach ensures no unintended ill-effects from biofuel production, but holding biodiesel accountable for the carbon emissions from putting more food and feed in the world has impacted biodiesel's carbon score when compared to petroleum fuel. Without these indirect effects, biodiesel reduces greenhouse gases (GHGs) by 85 percent compared to fossil fuels. Including predicted indirect emissions estimates has lowered biodiesel's advantage to just more than 50 percent cleaner than diesel fuel. That is, according to modeling done by EPA in 2010 and CARB in 2014. Purdue University's latest research shows these measures underestimate the carbon benefit of biodiesel by 10 percent.
"Biodiesel is already recognized as the commercial biofuel with the lowest net GHG emissions. The power in these new findings is that science is improving. The prediction of economic impacts and land use change is becoming more reliable. More data has been analyzed today than has ever been available in the past. The data shows that farmers all around the world are becoming more efficient. We are feeding better food to more people, and we are doing it using less land," Scott said. "This is great news, because agriculture is our most powerful tool to turn solar energy and carbon dioxide into things like food and biodiesel. This is a powerful formula, because sunshine is free, and farming turns the liability of excess carbon dioxide into an asset when we use it to support American jobs. Biodiesel is a powerful driver to create jobs and help our environment. As these models look more and more like the real world, biodiesel's extensive real-world benefits come into focus."