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California Biodiesel Alliance News

California's Biodiesel Industry Trade Association  

  

September 2017    

In This Issue
 

We begin with a bang! EPA's new RFS Notice of Data Availability (NODA) - to potentially decrease RFS volume proposals from their already unacceptably low levels - is being called outrageous and characterized as having Big Oil's fingerprints all over it. We reprint Biodiesel Magazine's updated article on this and ask that you join NBB and CBA in using this link to  Tweet at our Senators on this hugely important issue!
 
Continuing its aggressive record of world leadership on climate solutions and opposition to Trump administration policies, this month the state of California weighed in on the RFS (even before the NODA) with a strong letter of public comment that calls for higher volumes in all categories as necessary to support the state's investments in low carbon fuels. 
 
As CBA crafts its latest public comments on the proposed LCFS rulemaking, which includes a new verification program, we print in full our previous comments on the proposals presented at ARB's August 7th workshop.
 
We are pleased to offer two articles by Silver Sponsor Partners Argus and EcoEngineers and other important state, regional, and national news.
 
Key updates in the policy section include information on the CBA members discount for Argus' California Carbon & LCFS Summit (October 9-11), CBA's efforts as part of the Biofuels Coalition, and more info on key federal 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. 
    
(Biodiesel Magazine) 
EPA Blindsides Biodiesel Industry with 'Outrageous' Proposed Cuts

By  Ron Kotrba | September 26, 2017

The U.S. EPA issued a Notice of Data Availability Sept. 26, to provide public notice and an opportunity to comment on potential reductions in biomass-based diesel and overall advanced biofuel categories in the Renewable Fuel Standard.

The agency's NODA issuance is highly unusual, as its proposal for 2018 conventional, cellulosic and advanced biofuel volumes, along with 2019 biomass-based diesel volumes, was issued this summer, after which the comment period closed Aug. 31. Now EPA is seeking comment on new approaches to reduce biomass-based diesel and advanced biofuel volumes from its already  anemic proposal, which had originally sought to stall biomass-based diesel volumes in 2019 at 2.1 billion gallons - the same volume previously set by the Obama administration for the 2018 compliance year - and to reduce advanced biofuel volumes for 2018 to 4.24 billion ethanol-equivalent gallons, down from 4.28 billion gallons this year.

"EPA's proposal earlier this summer was inadequate, underestimating the power of domestic biodiesel production and ignoring the intent of the law," said Doug Whitehead, chief operating officer of the National Biodiesel Board. "This request for comment is even more disappointing."
Adding to the unusual nature of the NODA is that the agency is seeking comment on potentially reducing the 2018 biomass-based diesel category, which was finalized by the previous administration in 2016. EPA suggests the possibility of lowering the already-established 2018 biomass-based diesel volume of 2.1 billion gallons by up to 315 million gallons through use of the biomass-based diesel and other waiver authorities.

"It was a shocker, but not totally unexpected," said Juan Sacoto, senior vice president for Agribusiness Consulting, an Informa company. "It is unprecedented for sure."

EPA makes repeated mention of the expired biodiesel tax credit and preliminary duty determinations by the U.S. Department of Commerce on Argentine and Indonesian biodiesel as impetuses to potentially decrease the biomass-based diesel and overall advanced biofuel categories in RFS.

"I gave a speech about biodiesel a month and a half ago, and essentially I said this can easily happen," Sacoto told Biodiesel Magazine. "If imports come to zero, then it becomes very hard-in the short term-to meet the previous mandate."

Sacoto said the biodiesel industry must go back to the drawing board and provide detailed documentation to EPA demonstrating domestic productive capacity exists to make up for the shortfall in imports and, perhaps even more importantly, from where the feedstock will come, and what impacts this would have on commodity and RIN markets.

"This is doable," said Sacoto, who added that the cuts, if finalized, would be a short-term setback.

"Our expectation in July was the tariffs would be delayed until November," he said. "By coming this early, in August, there is not much adjustment time. Maybe EPA is acting too quickly. Maybe the agency would rather err on the side of caution." 

In the NODA, EPA repeatedly cites comments from oil lobby groups AFPM and API, legitimizing postulations that the Trump administration and an EPA led by Scott Pruitt back the oil industry in its quest to dismantle the RFS, despite campaign promises to uphold and defend the standard.

"This all gives me a strong suspicion that Big Oil and refineries are prevailing, despite assurances to the contrary," said U.S. Sen. Chuck Grassley, R-Iowa, in a press statement. "This seems like a bait-and-switch from the EPA's prior proposal and from assurances from the president himself and cabinet secretaries in my office prior to confirmation for their strong support of renewable fuels."

"When you look at how Trump campaigned," Whitehead told Biodiesel Magazine, "and how the administration's cabinet nominees testified in their confirmation hearings, our industry had a sense of optimism - we are adding hard-to-find jobs in rural America. Taken on face value, we were very optimistic. But in this hard political culture, we have to turn up the volume so we are heard. I remain optimistic that the promises made in the past by this administration will be kept, and they can understand and value what we do for America."

The NODA gives much weight to oil industry comments while discounting submitted comments and historical evidence that the U.S. biodiesel industry has outperformed every RFS increase to date, creates American manufacturing jobs, provides increased energy security and independence, adds much-needed value to rural economies, and is beneficial to the environment.

"What's most frustrating is it appears EPA has not bothered to look at the facts we've put forth to them in our comments-facts that support higher volumes in RFS," Donnell Rehagen, CEO of the NBB, told Biodiesel Magazine. It appears they have not considered all the comments and are instead worried about conjecture-the expired tax credit, imports. It's very disappointing to me since we've answered these questions positively. This is not the first year the biodiesel industry has been without the tax credit, or the first year there's been uncertainty in the biodiesel industry."

Grassley called the NODA proposal outrageous and said it would undermine domestic renewable fuel production. "That's contrary to the goal of America first, employing U.S. workers, and improving the U.S. economy," he said. "It's contrary to the goal of meeting the country's fuel needs, which is critical to economic growth. I plan to press the administration to drop this terrible plan."

Whitehead said, "NBB will be working with EPA to demonstrate the industry's proven success record, continued growth and impacts to American workers who were promised that this administration had their back."

The comment period will be open for only 15 days once the NODA is published in the federal register. Click  here to view the NODA. 

###

See the full article with links and graphics  here
State of California Comments on EPA's Proposed RFS Volumes
Call for Increases to Support a Growing Renewable Fuel Market
 
The State of California has followed up its 2014 letter to the U.S. EPA on RFS volumes with a powerful new call "to reconsider the proposed volumetric requirements and increase all four fuel category volumes to support a growing renewable fuel market." The California Energy Commission (Energy Commission), California Air Resources Board (CARB), and California Department of Resources Recycling and Recovery (CalRecycle) submitted joint comments on behalf of the state on the Proposed Volume Standards for 2018 and the Biomass-Based Diesel Volumes for 2019. 

Here are excerpts from the letter: 
 
"Biomass-based Diesel
 
We recommend EPA increase the 2018 and 2019 requirements for Biomass-based Diesel (D4) by a more significant amount.
 
The proposed nationwide volumetric obligation increase of 66 million GGE for the biomass- based diesel (D4) category is low given that California consumption of biodiesel and renewable diesel increased from 291 million gasoline gallon equivalents (GGE) in 2015 to 410 million GGE in 2016. The demand for more biodiesel and renewable diesel product exists, and is expected to continue to grow. Expansions of in-state biodiesel and renewable diesel plants and imports from out-of-state and international sources means that California will likely absorb the proposed 100 million gallon 2017 to 2018 increase just through our consumption alone. Based on recent trends, the nation as a whole could surely achieve more significant increases in the biomass-based diesel volume in 2018.
 
Advanced Biofuel
 
We recommend the EPA increase the advanced biofuel category. The Energy Commission, CARB, and CalRecycle are concerned about the potential adverse impact to the financial integrity of California's advanced biofuel industry from this Proposed Rule.
 
CARB manages the LCFS, a greenhouse gas performance-based regulation; it establishes market incentives for the production of lower-carbon fuels, regardless of fuel type or production technology, that are essential to the attainment of the program's carbon intensity reduction goals. The overall reductions EPA has proposed to the advanced biofuel, as well as the other three fuel categories, will be detrimental to continued investment in lowcarbon fuels and in achieving greenhouse gas emissions reductions and transportation fuel diversification.
 
The Energy Commission manages a $100 million dollar annual investment program for alternative fuel production and vehicle technologies (the Alternative and Renewable Fuel and Vehicle Technology Program, or ARFVTP) as part of California's climate and energy independence policies. The Energy Commission has invested nearly $750 million to date in low carbon, advanced technology fuel and vehicle technologies, including nearly $190 million for advanced biofuel production and fueling infrastructure, making it one of the largest public investment funds for alternative fuel and vehicle technologies in the United States outside of U.S. Department of Energy funding. These projects have leveraged over $375 million in additional private investments, and are estimated to help create over 1,500 new jobs. California is one of the nation's vanguard states for the development and adoption of advanced biofuels and vehicle technologies."
 
The letter also states that, " the ARFVTP portfolio of 59 biofuel production projects emphasizes very low carbon intensity biofuels that use waste-based feedstocks. The 45 biodiesel, renewable diesel and biomethane production projects feature carbon intensity values ranging from 80 percent to 245 percent below the current California petroleum baselines. These projects were financed with the expectation of strong RIN prices, and will need the support of sustained robust RIN markets to continue attracting private investment for future expansion. EPA's proposal to reduce the required levels of advanced biofuel use increases market uncertainty and sends the wrong message to the financial community. "
 
The letter is signed by Robert P. Oglesby, Executive Director, California Energy Commission; Richard W. Corey, Executive Officer, California Air Resources Board; and Scott Smithline Director, California Department of Resources Recycling and Recovery, and says they would welcome the opportunity to work in partnership with the EPA to address these challenges.

###

Download the complete letter here.
CBA's Comments on 2018 LCFS Amendments 
Proposed at August 7th Workshop
 
    CBA Logo
The California Biodiesel Alliance (CBA) appreciates the opportunity to comment on the 2018 Amendments to the Low Carbon Fuel Standard and Concept Paper presented at the August 7th workshop.  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.  Our comments here will focus primarily on the proposed Third Party Verification Program which is sure to have significant impact on our members and the industry at large, so we appreciate careful consideration of our feedback.
 
Validation & Ongoing Verification
 
CBA supports the concept that the initial validation of fuel pathways should use two prior years of data ("Validation").  As the next GREET update is expected January 2019, producers should be able to use the simplified model using calendar years 2017 and 2018. 
 
CBA supports Ongoing Third-Party Verification of Carbon Intensity Scores ("Verification") on an annual basis.  However, we have serious concerns that the proposed methodology may lead to inaccurate CI scores and an overly burdensome program. As you know, CI scores are not static, but are variable depending on numerous factors including feedstock, energy efficiency, production process, transport distance, etc. During the last application process, ARB recommended that applicants use the "worst case scenario" in order to avoid understating the CI score. We recommend the following improvement:
  • After Validation, the producer is free to use the applicable CI for up to one year.
  • The next year, the producer would be required to update the GREET model along with Third Party Verification. If the CI is lower, no action would be taken except that the producer would use the lower CI score for the following year. If the CI has been exceeded by 5% or less, the producer would be assessed a deficit equal to the over-generation.  No further penalty would be assessed against the producer.  This would encourage participants to lower their CI every year, allowing the program to generate the maximum possible number of valid credits.  We feel this is far more advantageous than encouraging the "worst case scenario" where the biggest loser is the program itself when valid credits go un-generated.
  • CBA requests further clarification on the definition of "material misstatement" to understand whether we support revocation of pathways and/or invalidation of credits for variances over 5%.  While we support that there should be harsh penalties for those nefariously using the LRT to commit fraud, CBA must ensure that small variances due to the fluid nature of the inputs to the CI model will not cause invalidation of the credits generated by legitimate producers.  We must all be cognizant of the potential market chilling that could occur if obligated parties fear invalidation of credits (similar to RIN fraud debacle in 2012).
  • CBA sees no risk in allowing limited deficits to be assessed against renewable fuel producers under this program, similar to the deficits assessed against refiners.
Monitoring Plan
 
CBA supports the requirement that each plant develop and maintain its own monitoring plan.  Our industry is concerned with the costs associated with tracking the transport distance of each shipment in and out of the plants.  We suggest limiting verification of this detail and instead, rely on attestation from the producer similar to the EPA's Separated Food Waste Plan.
 
Accreditation and Oversight
 
A primary concern for our industry is the potential misrepresentation of CI scores for fuels by foreign producers who may be out of reach for practical enforcement by ARB. 
  • CBA supports the requirement of in-person site visits.  However, we feel strongly that the third party verifiers shall be companies that are based in the United States to ensure enforcement by ARB. 
  • All producers, including foreign entities, should be subject to random, unannounced audits from ARB.  ARB should not approve a foreign pathway if it does not have the resources to conduct such audits. We understand that domestic participants should also be subject to scrutiny, but we are extremely concerned that if the burden falls more heavily on the domestic producers, the program will not do anything to curb potential abuse from abroad. 
  • CBA is firmly opposed to any feedstock verification patterned after ISCC, as such a program would be too burdensome and would result in feedstock suppliers sending their product out of state to avoid the cost.
"High Risk" Feedstock
 
CBA is very concerned with ARB's characterization of Used Cooking Oil ("UCO") as a feedstock with higher risk for mischaracterization that requires chain of custody evidence to the point of origin.  While it is true that feedstocks with lower CIs are more attractive for financial reasons, we believe there are multiple ways to ensure compliance with the program that do not place an undue burden on producers or renderers.  CBA offers the following suggestions:
  • ARB should require producers submit a copy of the Separated Food Waste Plan that is required for the RFS Program (rather than requiring duplicative information).  This plan requires producers to list the names and addresses of its feedstock suppliers and the estimated travel distance for the feedstock. Producers should be allowed to rely on statements from suppliers on this plan when submitting pathway applications. In other words, harsh penalties should be limited to cases of fraudulent or other nefarious conduct, and those participating in the market in good faith should be given ample latitude to cure any defects in their supplier information though assessment of deficits. 
  • Third party verifiers should conduct a mass balance of the chemical inputs and outputs at the plant.  In order to convert used cooking oil to biodiesel, the plant must utilize chemicals like methanol, catalyst and sulfuric acid.  A plant utilizing a virgin feedstock would use less methanol and catalyst for the conversion and would NOT use sulfuric acid.  A baseline should be established at validation and be verified by the Third Party Verifier.  In addition, a plant that is utilizing used cooking oil would generate a lower quality glycerin co-product.  While it is not in our interest to request further scrutiny as far as verification, we believe a mass balance of chemicals may be less burdensome than chain of custody with restaurant grease.
  • At the site visit and at ARB audits, representative samples should be taken from feedstock tank(s) and sent to a laboratory to check for certain markers that would identify the type of oil.  
Beware of Unintended Consequences
 
California is the largest low carbon fuel market in the world, but it is important to remember that it is not the only low carbon fuel market. These other markets, which are expected to grow in number, will be competing with California for low carbon fuels and low carbon feedstocks. Although CBA understands the importance of a strong verification program in order to guarantee the integrity of the California LCFS and supports this effort, the organization is concerned that if ARB were to create a verification program that is too onerous, it could create unintended consequences that could damage the program. Given the size of the California market, it affects prices on the global level. For example, it is now standard for low carbon markets as varied as British Columbia and Switzerland to use the price of carbon credits in California when determining the value of renewable fuels. Even the municipal fleet of New York City is willing to pay "California prices" for low carbon fuel. This is the case because these markets must be willing to match the California market in order to secure product. Likewise, the California market affects low carbon feedstock markets. There are only two net exporters of animal fat and waste oils in the world: Australia and the US. For other markets to import animal fat or UCO from the US, they will have to match the bid level of US biomass-based producers, and all US biomass-based producers will have to match the bid of their domestic competitors that serve the California market. So if ARB were to impose a verification program that is overly burdensome, CBA expects renewable fuel producers to move product to these different markets at the expense of California. Likewise, feedstock suppliers might refuse to participate in the system and instead sell their product to end users that are not supplying biofuels to California. One could see the perverse effect of UCO leaving California to be used as a feedstock for another low carbon market, and this very process being accelerated by high carbon credit prices in California.      
 
Conflict of Interest
 
CBA disagrees with the six-year limitation on 3rd party verifiers.  Program participants should be free to use any verifier that is in good standing with ARB.  The burden should be on the 3rd party verification company to demonstrate to the State of California that it is acting appropriately, and not burden the renewable fuel producers to alternate its vendors unnecessarily.  
 
In closing, CBA would like to thank you for your continued thoughtful deliberation on this challenging issue.  We all share the common goal of wanting this program to maintain its integrity, discourage bad actors and encourage the use of the lowest carbon feedstocks possible.  The most important points in this letter, including addressing the fluidity of CI and the mitigation of risk of low carbon feedstocks, deserve more attention and deliberation.  In that regard, CBA would like to request an in person meeting before the next workshop to go over some of these points in more detail.

###

Comment letters can be found under the listing for  the date of each workshop as  " Stakeholder
Feedback" here
http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm.
 

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(DC DISPATCH NEWS)
Western Governors Take the Lead on Climate Change
New alliance highlights states' progress despite President Donald Trump's rollbacks.


 
The governors of California and Washington traveled to New York City last week to send a strong, simple message to world leaders gathered for the United Nation's annual General Assembly. When it comes to acting on climate change, "you can count us in," Washington Governor Jay Inslee said.

During its meetings with world leaders last week, the Trump administration  reiterated  the president's plans to withdraw from the 2015 Paris Climate Agreement unless it can be renegotiated. Inslee and California Gov. Jerry Brown joined New York Gov. Andrew Cuomo in New York to counter President Donald Trump's message and his aggressive efforts in recent months to  rescind  national policies designed to reduce greenhouse gas emissions.

The three governors are co-chairs of the  U.S. Climate Alliance , a group of 14 states plus Puerto Rico  formed  in June to coordinate and showcase state-level action. Oregon and Colorado are the other Western states in the group. "This is about controlling our own destiny," Inslee said during a  press conference  Wednesday with the other governors. "There is nothing that Donald Trump can do to stop us in our states from advancing these policies."

The three governors, all Democrats, also participated in a roundtable with environment ministers from around the world at the United Nations two days earlier. They hope that by highlighting individual states' determination to keep acting on climate change, other countries will be less likely to follow Trump in rejecting the Paris Agreement. Because California has long been a leader in policies to address climate change and Brown has frequently attended international climate change meetings, world leaders are aware that it and other states have forged ahead with - and without - federal leadership.

"We are a political and economic force; and we will drive the change that will get us to the climate goals that we have to reach," Brown said at the press conference. For instance, states have the authority to set policies to reduce emissions for power plants and other industrial facilities in their states and can coordinate with other states to reduce emissions. They can set incentives and  requirements  to increase the use of renewable fuels like solar and wind and phase out dirty fuels like coal. They also can cut pollution from cars through  low-carbon fuel programs that require refineries to reduce emissions from gasoline and diesel and zero-emissions vehicle programs that require automakers to sell electric cars. But  fuel economy standards  - the strongest policy tool for limiting greenhouse gas emissions from cars - are set by the federal government. And, unlike the federal government, states can't require other states to cut emissions.

In the future, states can also drive key advances in climate policy, such as developing a sophisticated electric grid to accommodate more renewable power and multi-state networks of recharging stations for electric vehicles.

To emphasize that their combined actions are making a difference, the governors released a  report  that shows collective greenhouse gas emissions of the 14 alliance states dropped 15 percent between 2005 and 2015. And with policies already adopted in their states, they are projected to cut emissions 24 to 29 percent below 2005 levels by 2025.

The governors haven't announced new joint initiatives yet, but they plan to do so in Bonn, Germany in November during the next UN climate change conference, according to staffers. Inslee and Brown both plan to attend. Because climate change is a global problem, international and federal action is most important. But by rejecting so many climate change policies, Trump has elevated the significance of state leadership. "Subnational action is now more important than it's ever been," says  Robert Stavins , a professor of energy and economic development at Harvard University. "But saying that (state actions) are important, is not the same thing as saying that they are an adequate substitute for what would happen with federal policy."

While the governors tried to present a unified front, the level of commitment to climate action varies significantly among states in the alliance.
  • California has committed to get 50 percent of its electricity from renewable sources by 2030, and, through its cap-and-trade program, to cut greenhouse gas emissions 40 percent below 1990 levels by 2040.
  • Colorado was the first state to control emissions of methane, a potent greenhouse gas, from oil and gas production. But even as Gov. John Hickenlooper joined the alliance, he signed an executive order that encourages voluntary rather than mandatory actions. For instance, he said at the time: "We are instructing state agencies to work strategically with electric utilities and cooperatives who want to create plans to invest in as much renewable energy as possible."
  • Oregon barred its large investor-owned utilities from providing electricity generated with coal as of 2030. And it requires they supply 50 percent of their electricity from renewables by 2040.
  • Washington state in 2016 capped greenhouse gas emissions for its largest industrial polluters. Inslee used regulation to limit climate pollution after the state legislature repeatedly rebuffed his efforts to pass legislation.
  • Montana has not joined the alliance, but Gov. Steve Bullock reacted strongly to Trump's decision to pull out of the Paris accord: "Ask any Montana farmer, rancher, hunter, angler, or skier - climate change is real and poses a threat to our economy and way of life. To not acknowledge that or deal with it in a responsible way is short-sighted and dangerous," he wrote on Facebook.
  • Nevada also has not joined, but its state legislature in June adopted climate-friendly policies, including a bill intended to revive the state's residential solar industry. The legislature also passed a bill to increase the renewable portfolio standard but Gov. Brian Sandoval, a Republican, vetoed it.
All these state-level actions matter much more since Trump abandoned the U.S. role of leading by example and shepherding other nations' responses to climate change. Sen. John Kerry, who as President Barack Obama's secretary of state helped lead the nations of the world to coalesce around the Paris Agreement, lauded the states' efforts. "Trump forfeited American leadership," Kerry said at the press conference with the governors. "The leadership of governors and the leadership of corporations coming together is what is going to really save us here."

Correspondent Elizabeth Shogren writes  High Country News' DC Dispatches from Washington.

(MINNESOTA AG CONNECTION)  
Franken Offers Blueprint for Energy Section of Farm Bill

Posted September 8, 2017

U.S. Sen. Al Franken (D-Minn.) stood up for farmers, producers, and rural businesses in Minnesota and across the country by introducing a package of legislation that he hopes will serve as the basis for the new energy section of the next Farm Bill.

The measure, which is supported by fellow Midwest Sens. Dick Durbin (D-Ill.) and Tammy Baldwin (D-Wis.), will build on the 2014 Farm Bill by increasing investments in its popular energy programs - like REAP, which you can read about here. This move will help agricultural producers and rural businesses deploy more renewable energy projects and cut energy costs. Among its many other significant provisions, the energy section will also support advanced biofuel production, improve the market for sustainable agriculture feedstocks, and will help keep sugar prices stable, which is critical to farming families in Northwest Minnesota.

"Each and every day, our nation's farmers have our backs," said Sen. Franken, a member of the Senate Energy Committee. "I believe we need to have theirs as well. In Minnesota, one-in-five jobs is tied to agriculture, which means that the economic health of our entire state depends on farming. As we craft the 2018 Farm Bill in Congress, I'm fighting to make sure that Minnesota's ag priorities are being heard--and that's why I introduced this bill. My measure will support rural jobs, play a critical role in cutting energy costs, and help farmers and producers invest in energy efficiency and renewable energy technologies."

The Minnesota Farmers Union (MFU) also weighed in on Sen. Franken's efforts:

"Minnesota Farmers Union supports a strong energy title in the Farm Bill reauthorization," said Gary Wertish, MFU President. "Renewable energy programs included in this bill will provide many economic opportunities for farmers, and MFU appreciates Sen. Franken's leadership in developing this language."

Last year, in anticipation of the Farm Bill reauthorization, Sen. Franken hosted a statewide "Rural Energy for America Program" tour, where he met with farmers and business throughout Minnesota about how to build on the program. Minnesota is one of the biggest recipients of REAP grants and loan guarantees, which helped inform Sen. Franken's decision to push for stronger REAP funding in the legislation he introduced today.

You can read more about the specific provisions in the legislation below:

- Section 9002: Biobased Markets Program. Promotes biobased products through two initiatives: (1) a mandatory purchasing requirement for federal agencies and their contractors and (2) a voluntary labeling initiative for biobased products. Products that meet the minimum biobased content criteria may display the U.S. Department of Agriculture (USDA) Certified Biobased Product label.

- Section 9003: Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program. Seeks to facilitate the development of new and emerging technologies for advanced biofuels, renewable chemical, and biobased product manufacturing by providing loan guarantees for constructing or retrofitting commercial-scale biorefineries.

- Section 9004: Repowering Assistance Program (RAP). Provides payments to those biorefineries in existence as of June 18, 2008, that replace fossil fuel-based heat and power systems with renewable biomass. The Secretary of Agriculture determines the amount of the payment. USDA reports it will provide funding up to 50% of the total eligible project costs.

- Section 9005: Bioenergy Program for Advanced Biofuels. Provides payments to producers to support and expand advanced biofuels (i.e., not derived from corn starch). One payment type is based on "actual" biofuel production, and a second is for production increases. A cap of 5% of available funds per year is imposed on facilities that exceed an annual capacity of 150 million gallons.

- Section 9006: Biodiesel Fuel Education Program. Provides grants to nonprofit organizations and institutions of higher education that educate government and private entities that operate fleet vehicles, the public, and others about the benefits of biodiesel.

- Section 9007: Rural Energy for America Program (REAP). Provides eligible entities (e.g., tribes; state or local governments; land-grant colleges or universities; rural electric cooperatives) with grants to support agricultural producers and rural small businesses for energy audits and renewable energy assistance. Also provides loan guarantees and grants for energy efficiency improvements and renewable energy systems (RESs). RESs include biofuels, and power generation from wind, solar, biomass, geothermal, ocean, and some hydropower sources. RESs exclude retail energy dispensers (e.g., blender pumps).

- Section 9008: Biomass Research and Development Initiative (BRDI). Offers competitive funding through grants, contracts, and financial assistance for research, development, and demonstration of technologies and processes for biofuels and biobased products. BRDI seeks to foster technologies capable of significant commercial production of biofuels competitively priced with fossil fuels; to develop biobased products that enhance the economic vitality of bioenergy; and to supply a diverse, sustainable supply of renewable biomass feedstock for conversion to bioenergy and bioproducts. Eligibility is limited to institutions of higher learning, national laboratories, federal or state research agencies, and private and nonprofit entities.

- Section 9009: Feedstock Flexibility Program (FFP). Designed to help stabilize sugar prices so as to avoid costly forfeitures under the sugar loan program. Under FFP, USDA's Commodity Credit Corporation (CCC) may purchase sugar from processors for resale to ethanol producers for fuel ethanol.

- Section 9010: Biomass Crop Assistance Program (BCAP). Makes payments to owners and operators of agricultural land and nonindustrial private forest land for establishing, producing, and delivering biomass feedstock to eligible processing plants. Payments include (1) within BCAP project areas, establishment payments for perennial crops and annual payments of up to five years for non-woody crops and 15 years for woody biomass crops and (2) matching payments for up to two years for crop collection, harvest, storage and transportation of qualified biomass.
 


INDUSTRY NEWS 
French fries  French fries French fries

(Argus) 
Argus California Carbon & LCFS Summit
October 9-11, 2017
Napa Valley, California

CBA members receive a 15% discount 
t the leading West Coast fuels and carbon event of the year! Join over 250 of your peers in Napa this October to network and gain crucial insight on California's fuels and carbon markets, as well as other North American fuels and emissions programs. CBA Vice President, Joe Gershen, will present on biodiesel. 

Contact Celia DuBose to receive the CBA member discount code: celia.dubose@cabiodieselalliance.org

Visit  http://www.argusmedia.com/California-Carbon to register and find out more. 

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(US DOE)
 Energy Department Announces up to $8.8 Million 
for Innovations in Algae Technology

Sept 8, 2017

Today, the U.S. Department of Energy announced the selection of four additional projects from the  Productivity Enhanced Algae and ToolKits  funding opportunity to receive up to $8.8 million. These projects will deliver high-impact tools and techniques for increasing the productivity of algae organisms in order to reduce the costs of producing algal biofuels and bioproducts. The funding for this initiative now totals over $16 million, and supports the development of a U.S. bioeconomy that can help create jobs, spur innovation, improve quality of life, and achieve national energy security.

The selected projects include the following:

Colorado School of Mines (Golden, Colorado):
The Colorado School of Mines, in partnership with Global Algae Innovations, Pacific Northwest National Laboratory, and Colorado State University, will improve the productivity of robust wild algal strains using advanced directed evolution approaches in combination with high-performance, custom-built, solar simulation bioreactors.

University of California, San Diego (San Diego, California):  The University of California, San Diego, will develop genetic tools, high-throughput screening methods, and breeding strategies for green algae and cyanobacteria, targeting robust production strains. The team will work with three key industrial partners: Triton Health and Nutrition, Algenesis Materials, and Global Algae Innovations.

University of Toledo (Toledo, Ohio):  The University of Toledo, in partnership with Montana State University and the University of North Carolina, will cultivate microalgae in high-salinity and high-alkalinity media to achieve productivities without needing to add concentrated carbon dioxide. The team will also deliver molecular toolkits, including metabolic modeling combined with targeted genome editing.

Lawrence Livermore National Laboratory (Livermore, California):  Lawrence Livermore National Laboratory will ecologically engineer algae to encourage growth of bacteria that efficiently remineralize dissolved organic matter to improve carbon dioxide uptake and simultaneously remove excess oxygen.

DOE's  Office of Energy Efficiency and Renewable Energy  supports early-stage research and development of energy efficiency and renewable energy technologies that make energy more affordable and strengthen the reliability, resilience, and security of the U.S. electric grid. The  Bioenergy Technologies Office  contributes to EERE's mission by working with industry, academia, and national laboratory partners on a balanced portfolio of research in  algal biofuels  technologies.

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(Targray)

Targray Launches Turnkey Biodiesel Solution for C-Stores and Fuel Retailers
Company will present its biodiesel programs at 2017 NACS Show

Aug 16, 2017

Biofuels Marketer  Targray  has announced the nation-wide launch of its turnkey biodiesel solution for the American convenience and fuel retailing segment. The announcement comes as increasing freight movement in the U.S is spurring diesel demand throughout the country.

Created following a 2-year pilot program and multiple rounds of customer consultations, Targray's innovative 24/7 biodiesel solution for the convenience store segment provides a simplified approach to biofuel procurement that likens itself to purchasing standard diesel. It enables both chains and independently-owned c-stores and fuel retailers to achieve a positive return on investment from their very first Biodiesel order. Typical savings range anywhere from 3c to 10c per gallon of diesel sold, depending on regional market conditions and federal & state program eligibility.

Biodiesel Programs at the 2017 NACS Show

Targray trader & analyst Zackary Rocha will be in Chicago, Illinois from October 17-20 to attend the 2017 NACS Show. A long-time participant in the North American Biodiesel Trade, Rocha will be on hand to introduce Targray's regional Biodiesel programs to NACS members and to meet with existing customers. To book a meeting ahead of the event,  contact the Biofuels Division .

About Targray

Targray is a multinational commodities company that develops commercial solutions for 4 major industries: Energy Storage, Photovoltaics, Biofuels, and Optical Media. Established in 2012, the company's Biofuels Division has grown to become one of North America's leading suppliers of biodiesel. It operates one of the industry's largest dedicated rail fleets and over 40 supply terminal tanks from coast to coast.

Targray is a sitting member of the National Biodiesel Board and a proud supporter of over a dozen other industry associations, including NACS. Learn more at  Targray.com/biofuels.


STATE AND FEDERAL
REGULATORY AND POLICY ISSUE UPDATES  
 
  
CALIFORNIA AIR RESOURCES BOARD (ARB)
AB 32 SCOPING PLAN 
 
CBA has been coordinating with NBB to monitor and address issues of concern to our industry in the plan. P ost-2020 program planning is underway with Board consideration in early 2018. The main Scoping Plan page: https://arb.ca.gov/cc/scopingplan/scopingplan.htm. 
  
 
    
CALIFORNIA AIR RESOURCES BOARD (ARB)
 CAP & TRADE PROCEEDS ALLOCATED THROUGH THE STATE'S GGRF BUDGET
   
This month, the state legislature passed, and the Governor signed, a $1.4 billion expenditure plan with no specific money to support in-state biofuels. There is money directed to the Carl Moyer Program for diesel engine replacement and upgrades in agriculture for equipment and heavy duty trucks, which could result in New Technology Diesel Engines (NTDEs) being purchased. This is important because the sunset date for the ADF regulation's mitigation requirements is tied to the widespread adoption of NTDEs. Some in the Biofuels Coalition believe that there is flexibility for ARB to invest in biofuels. More will be revealed after ARB staff meets to discuss the specifics of that agency's GGRF Low Carbon Transportation Fuels budget plan next month. 
 
CBA's legislative focus going forward includes a push to address the specific roadblocks to B20 in the state. We are working with Assembly Member Quirk to advance our biodiesel agenda. We continue our work with the Biofuels Coalition, which will begin efforts to devise a new strategy that includes stressing the value of biofuels under the LCFS and updating the Bioenergy Action Plan.

 
CALIFORNIA AIR RESOURCES BOARD (ARB) 
ALTERNATIVE DIESEL FUEL REGULATION (ADF)

ARB is preparing new reporting forms and a FAQ to answer questions that have been submitted regarding the new 2018 requirements, including ones from CBA. 

Last month, a webinar was held to discuss the new ARB-approved NOx mitigation additive, VESTAâ„¢ 1000, which will enable the use of biodiesel blends up to 20 percent under the ADF's January 1, 2018 requirements. For information, visit: http://www.californiafueling.com.

The ADF regulation, which became effective January 1, 2016, currently includes reporting and recordkeeping requirements applicable to entities in the biodiesel industry. Biodiesel producers, importers and blenders must submit quarterly reports.  Biodiesel producers, importers and blenders are required to report and keep records concerning biodiesel production, sales, and blending. Biodiesel distributors and retailers are only required to keep records. 
 
Find the current FAQ and reporting forms at: http://www.arb.ca.gov/fuels/adf/adfdocs.htm. 

ARB's May 23rd, 2016 workshop presentation, which has detailed and very helpful diagrams, is posted here: http://www.arb.ca.gov/fuels/diesel/altdiesel/meetings/meetings.htm. 

NOTE: Most in-state biodiesel fuel businesses are required to register under the Air Resources Board's Motor Vehicle Fuel Distributor program (MVDP). See the article on our Members Only page.


CALIFORNIA AIR RESOURCES BOARD ( ARB)
LOW CARBON FUEL STANDARD (LCFS)

See lead article above. CBA is finalizing its next comment letter on the proposed LCFS rulemaking as presented at ARB's September 22nd public workshop. T he final rulemaking is scheduled for a vote of the board in the first quarter of 2018. Comments should be sent to LCFSworkshop@arb.ca.gov by October 6, 2017

CBA's comments will be available here under the listing for September 22nd as " Stakeholder Feedback")http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm.

 
Credit Activity
ARB publishes monthly LCFS credit transfer activity reports on the second Tuesday of every month:  https://www.arb.ca.gov/fuels/lcfs/credit/lrtmonthlycreditreports.htm .

Staff also publishes weekly LCFS credit transfer activity reports on the Tuesday of every week:  https://www.arb.ca.gov/fuels/lcfs/credit/lrtweeklycreditreports.htm .
 

CALIFORNIA ENERGY COMMISSION (CEC)
ALTERNATIVE AND RENEWABLE FUEL AND VEHICLE TECHNOLOGY PROGRAM (ARFVTP) 


There is no update this month. View the details of the ARFVTP funding program here: http://www.energy.ca.gov/contracts/transportation.html.  


STATE WATER RESOURCES CONTROL BOARD (SWRCB)
UNDERGROUND STORAGE TANK (UST) RULEMAKING


NBB's technical team is in discussions with the Water Board to investigate modifying their current proposal to update the UST regulations to be more closely aligned with that put out by EPA in 2015. EPA now treats biodiesel blends up to B20 the same as petroleum based diesel fuel for UST approvals and installations, with additional approvals needed for storing blends over B20. California's original proposal was to place the cut-off line for additional requirements on tanks containing over B5 vs. B20, and NBB will be coordinating with CBA and other stakeholders to work with the California Water Board to encourage treating B20 as conventional diesel similar to the way it is treated by EPA.   
 
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FEDERAL POLICY UPDATES 
 
For questions on federal policy issue, please contact the Washington office of the National Biodiesel Board (NBB) at  202-737-8801 .

NBB Fueling Action Logo
 
 

Extend and Modify the Federal Biodiesel Tax Credit through 2020
Previously, we included an article on S. 944, led by U.S. Senators Chuck Grassley (R-Iowa), Maria Cantwell (D-Wash.) and 14 other sponsors, which would extend and modify the biodiesel tax incentive through 2020. Now,  House bill (H.R. 2383 ) has been introduced. It is led by U.S. Representatives Kristi Noem (R-S.D.) and Bill Pascrell (D-N.J.), with Dave Loebsack (D-Iowa), Brett Guthrie (R-Ky.), Alcee Hastings (D-Fla.) and Sam Graves (R-Mo.) cosponsoring.
 
Please help grow the list of cosponsors  for H.R. 2383!  Click  here   to send a letter to your member of Congress  urging support for the biodiesel producers tax incentive bill.

Renewable Fuel Standard (RFS) - Tweet at our Senators!
Senators Blunt, Heitkamp, Murray, and Grassley are working on a letter to Administrator Pruitt, calling for higher volumes in the final RFS rule. Twitter is an effective tool for reaching out to elected officials. Click here to tweet your message. 

Foreign Imports Update
According to the NBB, on September 20th, the  Federal Register included a schedule of the International Trade Commission's (ITC) final phase investigation into subsidized and dumped biodiesel imports . One key date is a hearing at the ITC that will be held on Thursday, November 9, in Washington, DC. This hearing is a standard part of the process. 

The final phase investigation follows an affirmative preliminary subsidies determination by the U.S. Department of Commerce in August.  A preliminary antidumping decision is expected from the Commerce Department around October 20. A final subsidies determination is expected in November, and a final antidumping determination is expected in March 2018.

The ITC will hold its final vote on the subsidies case on December 5, with an affirmative vote paving the way for countervailing duty orders. A separate vote is expected in the spring following the Commerce Department's final dumping determination, which could pave the way for separate antidumping orders.  

As a reminder, the National Biodiesel Board's (NBB) Fair Trade Coalition filed petitions with the Commerce Department and the ITC regarding biodiesel imports from Argentina and Indonesia. The Commerce Department determines whether the imports are subsidized and/or dumped, whilethe ITC determines whether the domestic industry has been injured by these unfairly traded imports. The Commerce Department determines the amount of duties to impose on imports based on the degree of dumping and subsidies found.

Thank you for your engagement and support of CBA and for your time and effort on behalf of our industry. I look forward to continuing to work with you.
 

Best,
Celia DuBose
Executive Director
California Biodiesel Alliance (CBA)