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California Biodiesel Alliance News

California's Biodiesel Industry Trade Association  

April 2014     

In This Issue
Renewable Fuels Industry Says It's a Growing Part of California Economy
CARB Resets Clock on Revised ADF Proposal
Regional LCFS Roundtable Explores Greater Group Collaboration
Second Annual Clean, Low Carbon Fuels Summit: What's Next for All of the Above and How to Fund It



We are happy to begin this issue by sharing the Environmental Defense Fund's Green Roads Map. Done in partnership with CALSTARTEnvironmental Entrepreneurs (E2), and the Natural Resources Defense Council, it details over 300 companies in 400 locations that make up the state's clean transportation sector. The document was released this month in their blog post entitled "Fueling the Future: How California Businesses are Advancing Earth Day's Vision"
by Emily Reyna and Larissa Koehler and can be downloaded at: http://www.edf.org/green-roads-map.

Following a "CBA in the news" story are articles and policy updates detailing some of the triumphs, challenges, and complexities facing biodiesel here and nationally, including breaking news that in the last few days 21 states joined the original request for a Supreme Court review of the lower court ruling on LCFS (policy section). 

See details on the biodiesel tax incentive and more -- Federal Issues section below


Alternative Clean Transportation (ACT) Expo 

May 4th - 8th, Long Beach    

  The National Biodiesel Board will participate with a booth and a presentation by NBB CEO, Joe Jobe, who will also speak in the ACT Plenary Session, along with several other biodiesel speakers: http://www.actexpo.com/index.html.  

Sonia Yeh, Ph.D., and Christopher Yang, Ph.D., Institute of Transportation Studies, University of California, Davis: Thursday, May 1, 2014 10:00 am. Details in Policy Section below and at: 




To view back issues of this newsletter and CBA Email Alerts 

click on the "View CBA Email Newsletter Archive" button on our Home page.  

(Southern California Public Radio)  

Renewable Fuels Industry Says  

It's a Growing Part of California Economy


Southern California Public Radio: Brian Watt | April 25th, 2014, 9:57am 


If the oil industry can have a study boasting its economic importance, then the renewable fuels industry can, too.  


On Thursday, the Fuels America Coalition released an analysis of the economic footprint of the sector that includes biodiesel and ethanol. It came just days after the Western States Petroleum Association released a study of its contributions to the California economy. 


The Fuels America study says that in California, the renewable fuels industry:

  •        Generates $12.7 billion in economic output annually
  •        Supports 59,665 jobs and $3.7 billion in wages
  •        Generates $467.6 million per year in state tax revenue 

It's hardly fair to compare these numbers to the oil industry's. It supports more than 100,000 jobs in Los Angeles County alone.


But L.A.-based biodiesel marketer Joe Gershen says the renewable fuels sector is growing. At least 10 factories in California produce biofuels, including plants in Coachella, Bakersfield and San Diego, with more on the way.


"A lot of places where these plants are are in low-income areas with high unemployment," said Gershen, who also serves as vice chairman of the California Biodiesel Alliance.  "So these are creating very good-paying stable jobs in places that they really are needed."


The renewable fuels industry has been pushing to protect federal and state renewable fuel standards, which some parts of the oil industry have fought.


 * * *



CARB Resets Clock on Revised ADF Proposal

Last month CARB's rulemaking to create a standardized process for the commercialization of new Alternative Diesel Fuels (ADF) was officially cancelled. On April 17th, the agency held its first workshop to discuss a revised ADF regulation and reset the clock on the process. Biodiesel is the first ADF to be considered and would come under the regulation as a fuel at Stage 3A: "Commercial sales with significance threshold" having already completed

Stage 1: "Pilot stage" and Stage 2: "Fuel specification development with ASTM."  


The proposal presented the idea of two separate NOx control regimes for biodiesel: One referred to as Safe Harbor for the state's two extreme non-attainment regions -- the South Coast and San Joaquin Air Quality Management Districts -- and one for the rest of the state that uses the same Effective Blend (EB) Calculation put forth in the previous proposal, with some refinements. For details, see the Staff Presentation under the Public Meetings section for April 17, 2014 here: http://arb.ca.gov/fuels/diesel/altdiesel/biodiesel.htm.



Because biodiesel testing sponsored by CARB has shown small NOx increases relative to CARB diesel beginning at a 10 percent blend, the ADF proposal would allow any blend of biodiesel to be sold and then would monitor NOx levels in aggregate, and require mitigation only when a significance threshold is met. This threshold is an effective blend (EB) level of 10 percent determined by a formula that accounts for increasing amounts of NOx-neutral or NOx-lowering elements coming into the market -- specifically B5, renewable diesel (RD), low-NOx diesel, animal fat biodiesel, and voluntary mitigation. To avoid the NOx increase expected at B10, CARB proposes to set the mitigation trigger at B9.5.



The new proposal for regulating the sale of biodiesel in these two areas does not include the use of the EB calculation, but would allow producers/importers to sell a B100 Safe Harbor blendstock anywhere in the state with language on the Product Transfer Document (PTD) stating that the fuel must be blended to B9.5 or below in these areas. The PTD would also have to state that amounts above that level must be mitigated on a per gallon basis in these areas.


Mitigation options include: blending with renewable diesel or low-NOx diesel; the use of NOx reducing additives; and contracts to provide contemporaneous use of RD (with the NOx-lowering properties of animal relative to other feedstocks taken into account). Blenders would be responsible for blending Safe Harbor fuel to B9.5 or below. Distributors would deliver legal fuels to downstream facilities. Retailers could also mitigate blends using concurrent (meaning within the same calendar month) sales of RD or low-NOx diesel under contracts (which would set an upper limit on how much biodiesel can be sold).



All parties involved in mitigating biodiesel would be required to submit monthly reports to CARB, including all producers and blenders and retailers who mitigate. These parties must keep records of all biodiesel transactions, including information on mitigation status and blend level. See CARB's presentation for details of the proposed reporting and recordkeeping requirements.



The proposal includes exemptions for fleets composed of ≥95 percent light-duty vehicles (LDV), medium-duty vehicles (MDV), or new technology diesel engines (NTDE); retailers supplying ≥95 percent LDV, MDV, or NTDE: and fleets operating under a DMS variance. Management of these fleet and retailer exemptions would involve an application requiring fleet information, biodiesel volumes and blend levels; demonstration that 95% of fleet is light/medium duty (survey information) or has NTDEs; and fuel testing. An executive order would be issued to approve those retailer exemptions.



The results of CARB's ongoing NOx study are expected within the month and will be incorporated into the proposed regulation. The study is on animal fat and soy B5 and B10; is using 1991 DDC series 60 and 2006 Cummins ISM engines; and UDDS, FTP, and SET test cycles. CARB will also evaluate the effect on fuel oxidation stability for additives and how to handle contracts.



Speaking for the biodiesel industry, Shelby Neal, Director of State Governmental Affairs for the National Biodiesel Board, commented at the meeting that while we support CARB's work and are happy to comply, we continue to believe that the regulation is not needed. Three studies have shown that widespread use of B20 does not increase ozone or negative health impacts as a result of biodiesel's overall emissions profile which, by substantially reducing every other type of emission, essentially mitigates the small NOx emission increases. He added that because there is no ASTM specification for biodiesel blends above B20, and the state's DMS is helping lead that effort nationally, we support keeping the DMS variance intact. CBA and NBB will submit joint comments.



Comments are due May 8th. A CARB board hearing could happen as early as this summer. Legally, the agency has a year after the board hearing notice to finalize the regulation, which would become effective six months later.



Regional LCFS Roundtable  

Explores Greater Group Collaboration



On April 15th in Vancouver, British Columbia (BC), Environmental Entrepreneurs (E2), Climate Solutions, and the Western Canada Biodiesel Association convened an LCFS roundtable interested in expanding state-level low carbon fuel standards into a regional effort. This roundtable complemented the Pacific Coast Action Plan on Climate and Energy, which was signed in October 2013. While California and now BC have implemented their respective LCFS programs, Washington and Oregon are aggressively trying to overcome regulatory and political hurdles to similar program implementation.


Of the approximately fifty invited participants, there was equal representation from state regulators, NGO advocates, and industry. Regulators from BC, Oregon, Washington and California, including Richard Corey, Executive Officer of CARB, and staff from Governor Brown's office, provided status updates on their respective programs. NGOs, including E2, Natural Resources Defense Council (NRDC), Environmental Defense Fund (EDF), Union of Concerned Scientists (UCS) and Climate Solutions, as well as biodiesel representation, including Ryan Lamberg from the California Biodiesel Initiative and at least half a dozen biodiesel Northwest producers, were present.


The conversation explored challenges and opportunities for such regional collaboration and how to raise the visibility of the LCFS. This was the first conversation for supporters of the LCFS held with the goal of meeting peers from other jurisdictions and exploring how to share resources, information, and best practices. While the conversation centered on LCFS, the greater framework of collaboration on and ties to carbon pricing programs was noted throughout. Of the key takeaways, many expressed a desire for good data, at both the state and regional level, and for coordinated communication efforts that would re-brand the "value" of alternative fuels rather then let the oil interests frame the LCFS in terms of "compliance costs." Topics such as the harmonization of programs, momentum building, and coordination of verification protocols were also discussed.


Ryan Lamberg said in summary, "What appears to be a broad and diverse set of stakeholders could potentially agree on shared goals and, when appropriate, coordinate efforts to attract and leverage new and diverse groups, educate the general public, and support jurisdiction-appropriate political engagement."


CBA will stay in touch with progress on this topic and provide updates in this newsletter. 


Second Annual Clean, Low Carbon Fuels Summit

What's Next for All of the Above and How to Fund It



CALSTART logo   

On April 2nd, the Clean, Low Carbon Fuels Summit brought together a diverse range of participants from the state's various alternative fuel sectors, along with state agency staff and state legislators, for a second annual conversation hosted by CALSTART in coordination with Environmental Entrepreneurs (E2), the California Electric Transportation Coalition (CalETC), and the California Natural Gas Vehicle Coalition (CNGVC).  


The afternoon event provided a broad overview of the considerable successes and remaining challenges of low carbon fuels and the policies that support them, with a view toward the future. There was widespread agreement on the importance of the continued success of California's Cap and Trade and Low Carbon Fuel Standard (LCFS) programs and on the excellence and unparalleled leadership of our state's staff at the helm. Chief among the many who made that point was AB 32 author, Senator Fran Pavley, who praised the "unbelievably good experts," between the Air Resources Board (CARB), the Energy Commission (CEC), and even the Public Utilities Commission (PUC), that implement these and related policies.  



The financially incentivizing effect of LCFS and the value of the CEC's Alternative and Renewable Fuel and Vehicle Technology funding program under AB 118, which provides $100 million per year for low carbon transportation, were other areas of broad agreement.  And importantly, there were some new developments since last year's Summit on possible ways to meet the significant financial challenges associated with scaling up to the volumes required going forward. AB 2390, which would establish a Green Credit Reserve "to purchase credits generated pursuant to the Low Carbon Fuel Standard (LCFS) regulation and the federal Renewable Fuel Standard (RFS) from developers of renewable fuel production facilities in California for the purpose of supporting the financing and construction of these facilities" was discussed. Also discussed was AB 1992, which would authorize "the Air Resources Board (ARB) to require fuel suppliers subject to the Low Carbon Fuel Standard (LCFS) to include specified minimum percentages of very low carbon fuel, as defined."


Assemblywoman Nancy Skinner, Chair of the Committee on Budget, told the group she is looking to the transportation sector, as the highest GHG emitter, for suggestions as her committee vets proposals in the Governor's budget for the $850 million of Cap and Trade proceeds to be spent on low carbon projects ($200 for clean fuels and clean transportation). She also said "I love being in this space and facing this challenge, and I hope we do get it right."



Presenting the big picture for the state's key principals, Richard Corey, Executive Officer, CARB, in his opening keynote cited significant reductions in diesel particulate emissions; exposure to ozone; and GHGs through AB 32 and a range of strategies. He said that California is on target to meet its 2020 goals. Peppering his talk with "we need to do better," he said that, because the case for climate change is stronger than ever, it's time to think about a mid-term plan involving a range of strategies that reduce consumption, provide cleaner traditional fuels, cleaner technologies, and strong incentives. Corey called for information, advice, and expertise from attendees to aid the agency's re-adoption of LCFS over this year and its efforts to "push beyond 10% and push beyond 2020."


Pointing to transportation's critical role, he mentioned the Update to the Scoping Plan and the Sustainable Freight Strategy documents, which detail technology, fuel, and logistic opportunities for further reductions and collaborations with other agencies toward goals well beyond today's standards. (See the Policy section below for information on CARB's May 1st Research Seminar on how California can meet the 2050 targets for greenhouse gas (GHG) emissions -- 80% below 1990 levels).



Michael Waugh, Chief, Transportation Fuels Branch, CARB, stressed the success of LCFS as a performance-based program that has prevailed in lawsuits because "the courts realized the value of the LCFS and the investments that have been made." Referring to the many fuel providers who are constantly seeking low carbon pathways, he compared clean low carbon fuels under LCFS to a box of chocolates (because you never know what you are going to get). Agreeing that it should remain a box of assorted chocolates, the panelists almost all chimed in in favor of an all-of-the-above strategy for low carbon transportation in the state even when asked specifically to make the case for why their fuel is best.  



In public statements, Richard Corey is strong on the defense of his agency's programs. Just as CARB knew that lawsuits would be a part of the landscape of their low carbon programs and prepared to fight and win them, at the Summit he said that fuels coming under the cap was an element that was laid out "from the ebeginning." He added that he thinks that petroleum companies may be purchasing advance allowances on the expectation of meeting their obligations under that program, which will begin in 2015 when they join utilities and industry as regulate parties. Speaking at the Navigating the American Carbon World conference this March in San Francisco, Corey cited his more than ten years of experience working with petroleum companies and said that they will comply. He added that that they have too much to lose not to comply and stressed that, as always, CARB will implement and enforce the program.


Addressing a bottom-line issue, Senator Fran Pavley stressed the need for success stories to counter common misconceptions, stating that the rising fuel costs of low carbon programs threatened by the petroleum industry will not compare to the real price we will pay for not cleaning our air and tackling climate change "if we don't step up and do our job."



French fries Beautiful oil  French fries



See lead article above.


Research Seminar: "Modeling Optimal Transition Pathways to a Low Carbon Economy in California" with Sonia Yeh, Ph.D., and Christopher Yang, Ph.D., Institute of Transportation Studies, University of California, Davis.

Thursday, May 1, 2014 10:00 am, PDT (WEBCAST) Sierra Hearing Room, 2nd
Floor, Cal/EPA Building - 1001 I Street, Sacramento, California

Details at:

"An optimization model of the California Energy System (CA-TIMES) is used to understand how California can meet the 2050 targets for greenhouse gas (GHG) emissions (80% below 1990 levels). This model represents energy supply (energy resources electricity generation, and fuel production and infrastructure) and energy demand (commercial, residential, transportation, industrial and agriculture) sectors in California and simulates the technology and resource requirements needed to meet projected energy service demands."

LCFS RE-ADOPTION: On March 11th, CARB held its first workshop presenting a number of new ideas and amendments being considered in their comprehensive re-adoption process. Several follow-up meetings have been held, including one on April 4th, in which pathway and cost containment proposals were discussed. As part of our industry's engagement on these issues, CBA and NBB are attending all relevant workshops and will supplement initial comments with detailed follow-ups as needed. For more information: http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm.

LEGAL ISSUES: Last month, the Renewable Fuels Association and Growth Energy asked the U.S. Supreme Court to determine if the LCFS violates the commerce clause of the Constitution, a matter largely settled by the U.S. Court of Appeals for the Ninth Circuit in the case Rocky Mountain Farmers Union v. Corey in September of 2013.  On April 21st, the attorney generals of 21 states filed a joint brief in support of this request to review the lower court decision.

MONTHLY REPORTS: CARB's new monthly reports can be found here: http://www.arb.ca.gov/fuels/lcfs/lrtmonthlycreditreports.htm.

There is no policy update this month. Details on this issue can be found at: http://www.energy.ca.gov/2014_energypolicy.  


PROGRAM OPPORTUNITY NOTICE (PON): The deadline for PON-13-609, which allocates $9 million each for biomass diesel and ethanol and $6 million for biomethane, was extended from 3/11 to 3/25.  The CEC is expected to issue a Notice of Proposed Awards (NOPA) very soon. Interested parties are encouraged to stay informed by signing up for the listserve here: http://www.energy.ca.gov/contracts/#current.


There is no policy update this month. CBA urges compliance with the permanent UST law that took effect in June of 2012, which allows that when UL does not include a specific approval for a substance to be stored, the owner or operator may submit an Affirmative Statement of Compatibility from the manufacturer. The State Water Resources Control Board, which oversees USTs, gathers these statements, reviews them, then posts them on their website: http://www.waterboards.ca.gov/water_issues/programs/ust/alt_comp_opt/soc.shtml.


NOTE: The Water Board webpage is constantly being updated as new and revised forms are approved, but revised forms are not labeled as such. Also, please be advised that your local enforcing agency (CUPA) may require engineering approvals for non-integral secondary containment (sumps and UDCs).    


CBA has submitted a letter in support of AB 1992, the Low Carbon Fuel Advance Market Commitment. This program authorizes the California Air Resources Board to develop a program to bring very low carbon fuels, those that reduce life cycle greenhouse gas emissions by at least half compared to their closest comparable petroleum fuel, into the California fuel market at commercial scale. 





According to the NBB, the House Ways and Means Committee held a mark-up the last week of April to consider permanently extending several tax provisions that expired at the end of 2013. The committee will continue to review the remaining 43 tax extenders, including the biodiesel tax incentive, in the coming weeks. In the Senate, Majority Leader Harry Reid is set to schedule a vote on the tax package on the Senate floor in May. The tax package passed by the Senate Finance Committee in early April includes a two-year extension of the $1-per-gallon biodiesel tax incentive. The legislation would reinstate the blender's credit in its current structure retroactively to Jan. 1, 2014 and through Dec. 31, 2015. This is a significant milestone as we work to win full congressional approval. We need to aggressively advocate for the incentive if we want it to remain in the final version!  


The NBB continues its leadership on this critical issue, meeting with EPA and the Administration as they finalize their decision on the 2014 volume obligation, which is expected to be sent to OMB in a few weeks. The final decision will be made in June.  


Last month, we let you know that In 2011 Argentina applied for approval for a streamlined RFS pathway that would allow Argentinian biodiesel to meet the definition of renewable biomass under the RFS and qualify for RIN generation without having to map and track the feedstock as is typically required.  This has prompted concerns that a flood of biodiesel from Argentina into the U.S. market could threaten US companies. Please use the NBB template letter on their Fueling Action webpage (RFS) to quickly send the EPA a letter on this issue then let your members of Congress know that the EPA is considering a proposal that could allow significant volumes of imported fuel to fill the RFS without meeting Congress' stringent requirements. To reach your lawmakers:


Get background and talking points at: http://www.biodiesel.org/policy/fueling-action-center  

NBB Fueling Action Logo



New Members This Year

Gorge Analytical 
 The Jacobsen 
SC Fuels



If you are reading this and are not yet a member, please join us. CBA offers membership levels with the following annual dues: $25 for students and veterans; $100 for individuals and nonprofit organizations; $500 (Bronze business level); and $2000 (Silver business level). Full voting board level memberships are available by application at $3000 (Gold) or $5000 (Platinum). Our Join Us webpage has details and an easy online membership fee payment process.

Membership benefits include:   

  • CBA's Email Newsletter with important industry updates and features about Who's Who in biodiesel in California and Action Alerts when your help can really make a difference.
  • Participation in internal email communications, policy discussions, and legislative and regulatory visits. 
  • Discount on CBA's annual California Biodiesel and Renewable Diesel Conference.
  • Your company's logo and link on our Members webpage ($500 level and up).  
  • Special recognition at events and in publications (Platinum members).    

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Anyone can sign up to get CBA's special Alert emails, which we send out when we need biodiesel stakeholders and enthusiasts to take action on important issues facing our industry. Visit our Home page and add your email address.  




Just click on the "View CBA Email Newsletter Archive" button on ouHome page.

Thank you for your time and efforts on behalf of biodiesel. I look forward to working with you.  



Celia DuBose

Executive Director

California Biodiesel Alliance