California Biodiesel Alliance News
California's Biodiesel Industry Trade Association
We begin by welcoming Western Iowa Energy (WIE) as the new owner of Agron Bioenergy's Watsonville biodiesel plant, here and by including an article on the purchase below. Agron has been a long-standing CBA board member, and we are happy that Roxby Hartley will continue his service on the board as WIE's representative.
CBA had a strong showing at the NBB's meeting and lobby day on Capitol Hill this week. We congratulate CBA board member Harry Simpson, of Crimson Renewable Energy, on his election to the NBB Governing Board. CBA board members met with staffers in the offices of Senators Diane Feinstein and Kamala Harris, making our case for the biodiesel tax credit and a strong RFS. The biodiesel tax credit is not in the federal tax overhaul bill, and will hopefully move in a package separate from it, as an extenders package, by the end of the year.
This newsletter has key updates on federal issues including positive news on the final success in the subsidies case and that the EPA is keeping the RFS' Point of Obligation.
We include NBB's news release on RFS volumes, which came out today - and is not good news.
We reprint our latest public comments to the California Energy Commission (CEC) on the ARFVTP, as an important window into the ongoing, consistent efforts by CBA to increase funding for biodiesel and to stress the importance of biofuels to state goals. Thanks to CBA Vice President, Joe Gershen, for his years-long leadership as our representative on the ARFVTP Advisory Committee.
The policy section provides substantive updates that those doing business in the state need to know. This month it includes info on NBB's technical comment letter to ARB on the LCFS co-processing issue; a link to regulatory guidance on the POET lawsuit; news on the potential ICE ban; and more.
Registration Opens Soon for Our
SEVENTH ANNUAL CONFERENCE
MARCH 1, 2018 -- CAPITOL BALLROOM, SACRAMENTO
Back Issues of this newsletter are available in the Archives on our Members Only webpage.
Alternative Diesel Fuels Regulation (ADF)
2018 Reporting Form and FAQ Released by ARB
, which became effective January 1, 2016, affects all who handle biodiesel in the state and includes reporting and recordkeeping requirements applicable to entities in the biodiesel industry.
CBA's ADF Summary, which provided background, details, and Q & As on the regulation, was made available to members in December 2015 through generous funding from the National Biodiesel Board (NBB). CBA and the NBB involved biodiesel experts and actively participated for 10 years in the rulemaking process to ensure the best possible outcome for our industry. For background and information on the regulation, click here.
CBA members will have the opportunity to participate in a call with ARB staff on December 19th to get updates and ask questions about the new 2018 ADF compliance requirements.
on CEC's 2018-2019 Investment Plan Update
for the ARFVTP
Below is an excerpt of CBA's comment letter submitted this month to the California Energy Commission (CEC) on the latest funding plan for the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP):
We thank Commissioner Scott and Commission staff for their hard work on this Investment Plan Update. Your dedication to this program and process is very much appreciated by all of us on the committee. We have the following comments and recommendations:
In Chapter 3, in the fourth paragraph under "Low-Carbon Fuel Production and Supply," it states that the Energy Commission has provided 11 grants through the ARFVTP to expand the in-state annual production capacity of biodiesel by a cumulative 82 million gallons, and two of these projects have been completed and are producing fuel. We believe this is not correct. It's our understanding that the following four companies have completed grant projects under the ARFVTP: Crimson Renewable Energy, New Leaf Biofuel, Community Fuels and Biodico.
While we agree that there is enormous petroleum and GHG emission reduction potential of any low-carbon, drop-in gasoline or petroleum replacement, we would caution staff not to react too extremely. We are very supportive of the development of upstream biofuels, such as renewable gasoline and renewable crude oil, but there is still great potential for growth of in-state downstream biofuels production such as biodiesel and renewable diesel. We continue to believe that expansion of existing in-state biofuels plants is the most pragmatic path forward and will lead to meaningful carbon reduction and petroleum displacement. There are numerous technologies that can expand capacity and lower carbon intensity of existing biofuels production facilities, all worthy of investment under the ARFVTP.
We believe the best way to stimulate in-state biodiesel production is through a biodiesel incentive based on the volume of biodiesel produced, Carbon Intensity, and CalEnviroScreen score. This is a simple mathematical calculation that can be done ministerially on a quarterly basis, without placing CEC funds at risk with potentially unsuccessful projects. The incentive is based upon actual production, and rewards volume, low carbon intensity and positively impacting disadvantaged communities. This avenue should be explored for all biofuels, and we are available as an industry to assist with the development of this funding mechanism.
We are pleased with, and supportive of, the increase in funding to $25 million for this category. We have also been requesting funding for biodiesel storage and blending infrastructure for at least six years and continue to be disappointed in this area. Only about 30 percent of California's existing bulk fuel racks and terminals are capable of blending biodiesel in the state, and some minimal strategic investments in this area would send an important signal to refiners and fuel marketers, helping to break through the largest barrier to increased biodiesel blending in California. I strongly urge you to revisit this before finalizing this investment plan.
Finally, the Bioenergy Action Plan in 2012 was instrumental in coordinating existing and future programs for biofuel and bioenergy development. This plan should be updated, and an industry panel formed to assist in its development.
We value the open dialog and relationship that our industry has developed with the Energy Commission and look forward to continuing to communicate with staff. We hope this will lead to even more meaningful funding allocations for the biodiesel industry in the near future.
In Final Decision, Commerce Department Confirms Unfair Subsidies by Argentina, Indonesia of Biodiesel Imports
WASHINGTON, D.C. - Today the Commerce Department issued a final determination in a case brought by the National Biodiesel Board (NBB) Fair Trade Coalition regarding subsidized biodiesel imports from Argentina and Indonesia. Earlier this year, the Commerce Department made a preliminary finding that Argentina and Indonesia provide subsidies to their biodiesel producers in violation of international trade rules. Today's decision cements that earlier finding, and the cash deposit rates required of importers of biodiesel will be updated to reflect this final determination.
"The biodiesel industry has been injured for the past several years due to unfairly traded imports from Argentina and Indonesia. We appreciate that these unfair subsidies are being addressed, so we can fix this particular obstacle to continued growth in the domestic industry," said Doug Whitehead, chief operating officer of the National Biodiesel Board. "Though not yet over, this is a step forward in ensuring the product that supports nearly 64,000 jobs is not undercut by unfair imports."
To reflect the final determination, the Commerce Department will update the cash deposit rates that importers of Argentinian and Indonesian biodiesel must pay on biodiesel imported from those countries. The cash deposit rates range from 71.45 to 72.28 percent for biodiesel from Argentina, and 34.45 to 64.73 percent for biodiesel from Indonesia, depending on the particular foreign producer/exporter involved.
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.
To be successful in securing relief, a party must file not only with the Commerce Department, but also with the International Trade Commission (ITC). The Commerce Department determines whether the imports are subsidized and/or dumped, while the ITC determines whether the domestic industry has been injured by reason of such unfairly traded imports. The Commerce Department also determines the margin of duties to impose on imports based on the degree of dumping and subsidies found.
Today, November 9, the ITC is holding a public hearing in Washington, DC, beginning at 9:40AM ET, at which coalition members will testify before the ITC commissioners. The ITC is scheduled to hold its final injury vote on subsidies on December 5th. If the ITC's final injury vote in December is affirmative, the Commerce Department will publish final countervailing duty orders on the question of subsidies.
The coalition filed both antidumping and countervailing duty petitions with the Commerce Department. Antidumping petitions address concerns whether imports coming into the United States are priced below fair value. Countervailing duty petitions address subsidies provided by foreign governments benefiting imported product. Today's decision is on the subsidies question.
The antidumping investigations are following a different schedule: Commerce is scheduled to issue final antidumping determinations in early January, which would be followed by another ITC injury vote as it relates to dumped imports.
On Thursday, November 9th, members of the NBB Fair Trade Coalition testified for the first time before the U.S. International Trade Commission (ITC) as part of the ITC's final phase injury investigation, making well-prepared arguments and rebutting those by the respondents in the case.
Senators Heidi Heitkamp and Claire McCaskill gave strong testimony in support of the U.S. biodiesel industry. The ITC is scheduled to hold its final injury vote on December 5th.
As Promised, EPA Rejects RFS Point of Obligation Switch
Posted November 22, 2017 by Spencer Chase
The Environmental Protection Agency has formally decided against a technical change to the governance of the Renewable Fuel Standard, following through on a pledge its leader made to lawmakers in October.
The move makes official EPA's decision to reject a petition that would have changed the point of obligation under the RFS. EPA Administrator Scott Pruitt said in a
to seven farm state senators in October that he would direct his staff to finalize the decision within 30 days.
signed Wednesday by Pruitt, the EPA argued changing the point of obligation would not have improved the effectiveness of the RFS, nor would it have met the intent of Congress when administering the legislation.
"At the same time, EPA believes that a change in the point of obligation would unnecessarily increase the complexity of the program and undermine the success of the RFS program, especially in the short term, as a result of increasing instability and uncertainty in programmatic obligations," EPA said in a Federal Register filing.
Oil companies and refiners requested the change during the Obama administration, but decided against that request last November. However, the
on EPA's decision did not close until the early days of the Trump administration. The change would have ultimately changed the obligated party responsible for the generation and purchase of Renewable Identification Numbers from refiners and importers to blenders of transportation fuel.
Renewable fuels supporters were not in favor of the switch as demonstrated by statements released Wednesday afternoon. Growth Energy CEO Emily Skor said refiners had for a year been using "every trick in the book" to try and change the provision and thanked EPA for ultimately ruling against a modification.
"This one-sided handout would have added regulatory red tape, created havoc in the marketplace, and denied consumers access to more affordable fuels with higher blends of biofuels like E15," she said.
Sen. Deb Fischer, R-Neb., also applauded the move, saying the news is "a big victory for rural America.
"It will provide certainty, not only for hardworking producers in Nebraska and across the Heartland, but also for innovators who have invested in the future of renewable fuels," Fischer, one of the senators who met with Pruitt earlier this year, said in a statement.
Another senator in the room for the meeting with Pruitt, Iowa Republican Chuck Grassley, said the decision was "the right policy conclusion."
"This decision puts the issue to bed, and certainty is so important," Grassley said. "It's a decision from the EPA that sides with the integrity of the RFS."
The point of obligation switch took on a life of its own earlier this year, when Carl Icahn, then a special advisor to President Donald Trump, struck a deal with Renewable Fuels Association President and CEO Bob Dinneen to trade an executive order changing the point of obligation in exchange for action that would allow E15 to be sold during the summer months through a Reid Vapor Pressure waiver. Others in the renewable fuels industry
spoke out against the deal
, and the executive order never materialized.
Icahn ultimately resigned from his role as special advisor. In a statement, Dinneen reiterated that RFA's longstanding position is "the current point of obligation."
"We believe the quickest path to the lower RIN prices sought by obligated parties is regulatory or legislative action to establish RVP parity for E15," Dinneen said.
Rejecting the point of obligation switch was one of four promises made to senators in Pruitt's letter: He also pledged to look into the RVP waiver, not pursue action that would allow RINS to be associated with exported biofuels, and to release 2018 blending levels under the RFS "equal to or greater than the proposed amounts." By law, that announcement must happen by the end of November.
Biodiesel Industry Disappointed by the Renewable Fuel Standard Volumes
NBB: EPA Missed an Opportunity to Grow American-Made Energy and Jobs
November 30, 2017
WASHINGTON, D.C. - Today, the U.S. Environmental Protection Agency (EPA) released the required volume obligations (RVOs) under the Renewable Fuel Standard (RFS) and failed to grow the biomass-based diesel volumes. Since the July proposal was released, NBB has relentlessly called for growth in the volumes of advanced biofuels and biomass-based diesel.
"EPA Administrator Pruitt has disappointed the biodiesel industry for failing to respond to our repeated calls for growth. These flat volumes will harm Americans across several job-creating sectors-be they farmers, grease collectors, crushers, biodiesel producers or truckers-as well as consumers. Nevertheless, we can't thank our members and our biodiesel champions at the state and federal levels enough for their tireless advocacy and education efforts. We'll continue to work with the administration to right this wrong for future volumes," said Doug Whitehead, chief operating officer of the National Biodiesel Board.
EPA announced requirements of 4.29 billion gallons of advanced biofuels for 2018 and 2.1 billion gallons of biomass-based diesel again for 2019. The July proposal recommended only 4.24 billion gallons of advanced biofuels and 2.1 billion gallons of biomass-based diesel-a reduction and a flatline, respectively, from last year's standards. The biodiesel industry has consistently exceeded EPA's standards-despite the agency underestimating the volumes each year. These volumes are important for setting a baseline-and our industry will again surpass these low expectations-but the failure to increase volumes will inhibit continued growth and investments.
Since the July proposal and the September Notice of Data Availability, the biodiesel industry has engaged in aggressive advocacy for growth in the volumes. In addition to an extensive series of meetings with administration officials, NBB issued robust data sets, a campaign-style video, a full-page advertisement in the Washington Post, a letter to President Trump from NBB's leadership, and NBB joined a broad coalition letter with other biofuels advocates. The association led several letter-writing and social media campaigns, as well as assisted with governors', senators' and NBB members' efforts to raise the volumes. This week, nearly 100 NBB members were in Washington, D.C., to meet with their elected officials on Capitol Hill.
(Special Op Ed by John Diener and Rey León)
Why Zero Net Energy Farms
Can Be the Next Salvo in California's Climate Change Fight
By John Diener and Rey León
Recent extreme weather events-drought, fires, storms, and mudslides-are a stark reminder of the effects climate change already has on California. They beckon us to respond with smart solutions. For those of us living and working in the Valley, fully adopting renewable energy will not only decrease greenhouse gas emissions but also drastically improve the air we breathe. California's agricultural industry, a bedrock of our economy, is uniquely poised to slash emissions by using renewable energy to power farms.
As a Valley farmer and the mayor of Huron, respectively, we have a vested interest in the economic prosperity and health of the rural communities we serve. Renewable energy meets those goals by cutting production costs, eliminating fossil fuel pollution, and creating quality, long-term jobs. We've partnered to bring these renewable energy benefits to our community.
There is a vast, untapped source of energy and fuel that many farmers don't utilize. For example, green waste, which is abundant and otherwise goes unused, can be repurposed to create biodiesel and thermal energy. At Red Rock Ranch, we've harnessed green waste and other local sources of renewable energy to power our farm and do our part to end dependence on expensive fossil fuels. In partnership with Biodico, we produce our own biodiesel to power our tractors. We also have installed LED lighting, solar panels, and thermal energy technology that, together with our biodiesel operation, have earned Red Rock Ranch the distinct title of the world's first and only zero net energy farm. That means the total amount of energy the farm uses annually equals the amount of renewable energy it creates on-site.
What attracted us the most to renewable energy was the opportunity for significant cost savings. The benefits of investing in long-term renewable energy produced locally outweigh the alternative: purchasing imported fuel and energy. Government agencies like the California Energy Commission also provide grants to help farmers and businesses upgrade to renewable energy. None of this cutting-edge technology would have been possible without policies California has adopted that make us a global clean energy innovator, most notably the state's Low Carbon Fuel Standard. Thanks to the Low Carbon Fuel Standard, which incentivizes production of low-carbon fuel like the biodiesel made at Red Rock Ranch, we save even more.
Revamping a farm to leverage available resources is now just a mouse-click away. Using Red Rock Ranch as a model, Biodico has launched an online program to help farmers identify ways to save energy, through irrigation practices, and generate renewable energy on-site such as with biomass or solar power. Farmers all across the country-and in other countries too-can replicate our success using the easy-to-deploy app. California produces two-thirds of the country's fruits and nuts, and around one-quarter of our state's agricultural production is exported abroad-our blueprint could transform agriculture nationwide and globally. In California alone, our model could be replicated 20,000 times on similar lands.
Rural communities also benefit from clean energy as it generates stable, well-paying jobs. Choosing renewable energy allows farmers to invest in communities by hiring and training local workers to produce biodiesel. Clean energy jobs, like the Biodico jobs at Red Rock Ranch, overall pay higher average wages and provide workers with benefits other industries don't. These jobs allow for small towns to flourish by providing working class communities like Huron with jobs, putting families on the path to financial stability. Red Rock Ranch is providing 300 direct and indirect local jobs with an even broader ripple effect.
The Valley is overburdened by some of the country's worst air pollution. Harnessing abundant renewable energy is an accessible and cost-effective solution to ensure economic growth and protect the health of the air and our communities. In California and worldwide, farmers, business leaders, and elected officials can create partnerships like ours to step up their role in fighting air pollution and climate change.
John Diener is the president and CEO of Red Rock Ranch in Five Points and Rey León is the mayor of Huron.
Western Iowa Energy Acquires 15 MMgy California Biodiesel Plant
Posted November 15, 2017
Agron Bioenergy LLC closed the sale of its biodiesel plant located in Watsonville, California, to Western Iowa Energy LLC. Ocean Park acted as exclusive advisor to the seller.
"Western Iowa Energy is happy to be joining with Agron Bioenergy to provide high-quality biodiesel for California consumers," said Bill Horan, Western Iowa Energy's chairman.
Western Iowa Energy President and General Manager Brad Wilson added, "We are excited to begin biodiesel production in California. We have been very successful in Iowa and plan to increase the value of our members' investment with this acquisition."
Financial terms of the transaction were not disclosed. The assets include a biodiesel refinery designed to produce 15 MMgy and patents encompassing Agron's centrifuge system and distillation steps to eliminate water washing in the production of biodiesel.
"This sale marks the 24th successful biofuels transaction for Ocean Park, which further solidifies our position as a leading advisor in the renewable fuels and chemicals industries," said Mark Fisler, an Ocean Park managing director.
"Western Iowa Energy has been successful as an independent biodiesel producer for over a decade," said John Campbell, another Ocean Park managing director. "Their footprint expansion into the California market shows confidence not only in their long-term business model but the future of a low carbon economy."
Agron Bioenergy was founded in 2012. The plant uses continual process patented technology to dispense with water washing and produces clean distilled B100 biodiesel that meets or exceeds ASTM D-6751 specifications.
Western Iowa Energy is a BQ-9000-accredited biodiesel producer whose Wall Lake, Iowa, plant can produce 45 MMgy.