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California Biodiesel Alliance News

California's Biodiesel Industry Trade Association  

July 2014     

In This Issue
EPA Rules Finalize New RFS QAP Program and Approve New Cellulosic Pathways
Supreme Court Denies Appeal of California's Landmark Low Carbon Fuel Standard
LCFS Credit Prices Recovered in June, CARB Reports
AB 69 Would Let Big Oil Maximize Profits on the Backs of Consumers
Crimson Renewable Energy and Community Fuels Chosen to Receive CEC Funding
LA Moving Company Converts Fleet to Biodiesel



This issue begins with good news on an important federal rule before moving to California matters. The latest update on CARB's Alternative Diesel Fuel regulation, which will have a tremendous impact on the future of our state's industry, is in the Regulatory and Policy Issues section.  


But first, the biggest issue affecting our nation's biodiesel industry, is the US EPA's proposed weak Renewable Fuel Standard (RFS) volume requirement for the amount of biodiesel that petroleum companies will be required to blend into their fuel in 2014, coupled with the agency's continued delay in making that final decision. Please talk to your local media about the damaging effect this situation is having on the green jobs, the energy security, and the environmental benefits our industry offers to our country. And because Congress is on recess in August, our national leaders, who've worked tirelessly on this issue, are asking that you  . . . . .  



Click here for congressional contact info and our latest arguments from NBB's DC staff
 Click here to learn why CEC and CARB heads believe EPA's proposed volumes will hurt LCFS  

To view back issues of this newsletter and CBA Email Alerts 

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


US EPA Rules Finalize New RFS QAP Program   

and Approve New Cellulosic Pathways


On July 2nd, long-awaited US EPA rules establishing a voluntary Renewable Identification Number (RIN) Quality Assurance Program (QAP) was signed along with RFS Pathways II and Technical Amendments to the RFS Standards and E15 Misfueling Mitigation Requirements. The official versions of these rules will be published in the Federal Register with an effective date 60 days after publication. The final rules and factsheets can be found here: http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm.


The final QAP rule was developed with significant input from National Biodiesel Board (NBB) staff and its RIN Integrity Task Force to complement the private-sector programs put in place by the Task Force's intensive and much-lauded efforts over the last few years to address the issue of RIN fraud in the US biodiesel market. The biodiesel industry was gratified to see the inclusion of many of the elements it advocated for. Some of the main achievements are: a simpler, two-tiered system; an affirmative defense for civil penalties only; that ultimate responsibility for RIN replacement remain on the obligated party; and that QAP providers be truly independent.


According to the EPA's factsheet on the QAP, "In today's action we are finalizing a voluntary quality assurance program for verifying the validity of Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS) program. For RINs that have been verified according to an approved quality assurance plan (QAP), the program will provide an affirmative defense against liability for civil violations under certain conditions for the transfer or use of invalidly generated RINs, and specifies both the conditions under which invalid RINs must be replaced with valid RINs, and by whom. The program includes elements to allow verification of RINs beginning January 1, 2013. We are also finalizing modifications to the exporter provisions of the RFS program to ensure that an appropriate number and type of RINs are retired whenever renewable fuel is exported. Finally, we are finalizing a number of changes to other RFS regulations governing the transfer and use of RINs that become invalid downstream of the producer."


The RFS Pathways II and Technical Amendments to the RFS and E15 Misfueling Mitigation Requirements (Pathways II) rule qualified the following as cellulosic and advanced fuel pathways when production comes from biogas from landfills, municipal wastewater treatment facility digesters, agricultural digesters, and separated MSW digesters: compressed natural gas, liquefied natural gas, and electricity used to power electric vehicles. It also provides guidance on crop residues, putting corn kernel fiber in that category, and rules that renewable diesel can generate a D5, advanced RIN when it is made from the non-cellulosic portions of separated food waste and non-cellulosic components of annual cover crops.


The EPA said, "These pathways have the potential to provide notable volumes of cellulosic biofuel for use in complying with the RFS program, since significant volumes of advanced biofuels are already being generated for fuel made from biogas, and in many cases this same fuel will qualify for cellulosic RINs when this rule becomes effective."


Please read the factsheets and the rules for further details on these and other issues.   


Supreme Court Denies Appeal of California's Landmark  

Low Carbon Fuel Standard


Lower Court Decision Upholding Groundbreaking Clean Fuel Protections Will Stand



 By Environmental Defense Fund | June 30, 2014   


(Washington, D.C. -- June 30, 2014) The Supreme Court will not review a rigorous decision by the U.S. Court of Appeals for the Ninth Circuit that upheld California's Low Carbon Fuel Standard - common sense standards designed to reduce unhealthy air pollution, protect the environment and strengthen the state's clean energy economy.


The Supreme Court today denied petitions from large oil companies and corn-ethanol producers asking it to review and reverse the Ninth Circuit Court of Appeals' decision.


"The Supreme Court's decision today denying requests by big oil companies to review legal appeals challenging California's landmark low carbon fuel standard is welcome news for the millions of Californians at risk from the clear and present danger of climate change," said Tim O'Connor, Director of California Climate for Environmental Defense Fund, which was a party to the case.


"The Low Carbon Fuel Standard will protect the health of Californians while strengthening our clean energy economy," said O'Connor. "It is unfortunate that big oil companies are investing in litigation and obstructionism rather than investing in the innovation in cleaner low carbon fuels that is essential for our health and our prosperity."


The Low Carbon Fuel Standard is a policy created under California's groundbreaking climate change laws, known as AB32. It will reduce the amount of carbon pollution released from the fuels sold in California by 10 percent between now and 2020.


The measure will improve California's air quality, reducing serious health impacts like heart and lung diseases caused by air pollution, which in turn will save the state billions of dollars each year in health care costs.


The Low Carbon Fuel Standard is also designed to help the economy by stabilizing fuel prices and protecting Californians against future oil price shocks, and by driving innovations in business and technology that will create jobs. A recent report from EDF and the American Lung Association found that California's clean fuels policies will save over $10 billion by 2020.


The Ninth Circuit Court of Appeals upheld the Low Carbon Fuel Standard last September, saying:


"California should be encouraged to continue and to expand its efforts to find a workable solution to lower carbon emissions, or to slow their rise. If no such solution is found, California residents and people worldwide will suffer great harm. We will not at the outset block California from developing this innovative, nondiscriminatory regulation to impede global warming."


The LCFS has been in effect for more almost three years, and -- as intended - it is helping to bring innovative, cleaner fuels to California consumers.  



Tim, O'Connor, 415-293-6132, toconnor@edf.org 
Erica Morehouse, 916-492-4680, 
Sharyn Stein, 202-572-3396, sstein@edf.org 




Environmental Defense Fund (edf.org), a leading national nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships. Connect with us on EDF Voices, Twitter and Facebook.####
LCFS Credit Prices Recovered in June, CARB Reports 

2014-07-15 02:46:56 EDT

The agency handling California's Low Carbon Fuel Standard regulations said the average price of the program's tradable credits jumped more than 27% in June.

LCFS credits averaged a trading price of $42/credit during June, up from the $33 that credits averaged in May, the California Air Resources Board reported during the last week. Trading volume also increased month to month, up almost 44% at 
82,000 metric tons, though the number of transactions at the same time dropped to 16 from the 21 CARB counted in May.

The June price average is the highest reported by CARB since March, when the credits averaged $53, but the agency also noted a very wide price range in June transactions that stretched from $18 up to $85 per credit.

For the whole 2014 second quarter, credit prices averaged $35, down 31.4% from the first-quarter average of $51 and about half what CARB says prices averaged in the 2013 fourth quarter. While the number of trades recorded by CARB dropped from the first quarter, down 8.1% to 57 trades in the second, the total volume of trades climbed 55.2%, to 267,000 metric tons.

Last year, LCFS credit prices averaged $55 with 202 total transfers amounting887,000 metric tons of total volume.

Since the start of the program, CARB says 1.49 million total credits transferred through June.

--Spencer Kelly, skelly@opisnet.com


AB 69 Would Let Big Oil  

Maximize Profits on the Backs of Consumers



California Assembly Member Henry Perea's (D-Fresno) bill AB 69 would delay for 3 years the January 1, 2015 inclusion of transportation fuels in the state's Cap and Trade program. The state's other large industrial polluters, already regulated under the program, have had to reduce greenhouse gas emissions or buy allowances since 2012. Not surprisingly, Sempra Energy, the parent company of San Diego Gas & Electric and Southern California Gas, in a letter to the chairman of the California Air Resources Board, Mary Nichols, on July 11 said that the utility sector "already shoulders the responsibilities and costs of reducing greenhouse gas emissions under the program and that delaying the expansion to vehicle fuels would be unfair," according to The Sacramento Bee.


Oil industry lobby groups are making the case loudly and widely, especially in the state Capitol, that fuels coming under the Cap and Trade program could raise retail fuel prices by 15 to 75 cents per gallon. A July 7th article in OPIS reported that Jay McKeeman, CIOMA's Vice President of Government Relations and Communications, said, "I want to thank Assembly Member Henry Perea for listening to the voices of small businesses and consumers throughout the state who are angry that they are just learning about the California Air Resources Board's planned January fuel fee and the hit to their family budgets." Echoing that sentiment, sixteen Assembly Democrats sent a letter to Mary Nichols arguing their concern for vulnerable communities and seeking financial relief for, or for a delay in, the obligation of petroleum companies under Cap and Trade.


The California Biodiesel Alliance (CBA) joined with low carbon industry members and environmental, health, and religious groups -- including the American Lung Association in California, Sierra Club California, Center for Climate Change and Health, Natural Resources Defense Council (NRDC), and the San Francisco Medical Society -- who responded with a letter to these legislators. It stated, "Either action would be worth billions of dollars to the world's most profitable companies at the expense of the health and well being of the people of California. Transportation accounts for 40% of carbon pollution in California. Reducing pollution from this sector is essential to meet California's targets. The top five oil companies made an estimated profit of more than $200,000 a minute over the past two years, or $211 billion dollars.There is nothing in AB 32 mandating that gas prices go up or that oil companies must pass on their cost of compliance to California residents and businesses. By issuing threats, they have signaled that they intend to maximize profits on the backs of consumers."


Addressing the legislators' vulnerable communities argument, the letter stated that, "In the 2014-15 budget that all but one of you voted for, proceeds also are allocated to expand transit and affordable housing in transit oriented design projects that provide people with the option to drive less. The benefits will be delivered to all Californians, with those in low-income and heavily polluted communities receiving significantly more investment, as required by SB 535 (De Le´┐Żn)."


Jorge Madrid, Senior Partnerships Coordinator for the Environmental Defense Funds's California Climate Team, responded strongly to that argument in his article "Does Big Oil Really Care About Vulnerable Communities?" which first appeared in the Huffington Post here.

In his article "What Big Oil Isn't Telling You About California's Clean Energy Law," Simon Mui, Director, California Vehicles and Fuels, Energy & Transportation Program, NRDC, addresses this issue and much more with data about how AB 32, is making vehicles more efficient, lowering fuel prices, and providing more consumer choice.


We will be following this issue closely and will keep you informed.

Crimson Renewable Energy and Community Fuels  

Chosen to Receive CEC Funding  



Crimson Renewable Energy, LP and Community Fuels have been chosen to receive funding from CEC's Alternative and Renewable Fuel and Vehicle Technology Program under AB 118.  In May, the CEC released a Notice of Proposed Award (NOPA) announcing its Round 1 Award for their Pilot-Scale and Commercial-Scale Advanced Biofuels Production Facilities program (Solicitation PON-13-609). Crimson Renewable was selected to receive $5 million for plant expansion at its Bakersfield biodiesel production facility.

Community Fuels


On July 18th, the agency announced its Round 2 Awards. American Biodiesel, Inc. (dba Community Fuels) was chosen to receive $4,183,421 to increase efficiency for processing low carbon intensity biodiesel feedstocks at its biodiesel production facility in Stockton.



As part of the same NOPA, $5 million each was also awarded to two companies for renewable diesel production. For more information on this NOPA, visit: http://www.energy.ca.gov/contracts/#nopa.


LA Moving Company Converts Fleet to Biodiesel 

Posted on July 23, 2014 by John Davis

A Los Angeles-based moving company has converted its entire fleet of trucks to run on biodiesel. 24-7 Van Lines says the conversion helps the environment and helps the company be more energy efficient, which means they can pass along savings for its commercial and residential customers.

According to the U.S. Environmental Protection Agency (EPA), emissions from transportation vehicles amounted to an estimated 28% of all greenhouse gases emitted in the nation in 2011. With newer laws being enacted nationwide designed to curb emissions, and with some being implemented by individual states already, trucks in the moving sector and in other industries will soon have to conform to newer and more stringent standards. With the cost of bio-diesel fuel at a comfortable median to standard diesel, entities that convert their fleets stand to enjoy substantial reductions in cost. For The Commercial Movers, the upgrades make them an officially "green" Los Angeles Cross Country Mover, also enabling them to offer lower rates to their customers as a result of reduced fuel encumbrances.

"We strive to make our services as valuable to our customers as possible, while also being cognizant of the impact that our company has upon the environment," explained company spokesperson, Mark Tanning. "With our completed upgrade to cleaner burning bio-diesel engines, we are able to tackle both objectives with one move. Now we can offer better prices to our clients and reduce our carbon footprint, simultaneously. And that's a tune that we can all hum along to."

More information about the company is available at www.247vanlines.com.


French fries Beautiful oil  French fries



According to CARB's website, California's "diesel fuel regulations are geared toward controlling criteria pollutant emissions from hydrocarbon-based fuels and are not intended to provide a market pathway for alternative diesel fuels (ADF), such as biodiesel.  With the advent of the policies that incent or require ADFs, such as the federal Renewable Fuel Standard and the California Low Carbon Fuel Standard, there is a clear need to provide a pathway for emerging ADFs to enter the California market." Biodiesel will be the first ADF under the new regulation.


As part of its ongoing work to establish the ADF regulation, CARB staff presented their most recent biodiesel testing data for NOx emissions on B5 and B10 in a July 1st webinar.  Staff presented data they believe demonstrates a 1% NOx increase for B5 biodiesel blends. Calling their own conclusions "preliminary," they called for participants to do their own analysis. Our industry is skeptical about the results presented due to some inconsistencies and anomalies. We are involved in high-level discussions with CARB staff and have requested further details -- including specifications of the fuels used, engine performance to the protocols, and the determination of statistical significance -- as part of an extremely concerted effort to insure a full review and analysis of the data.


Per the NBB's request, the workshop date of July 31st has been delayed to provide more time for expert analysis by statisticians at the National Renewable Energy Laboratory. 


Details of the next public meeting on this issue will be posted here: 




LCFS RE-ADOPTION: With CBA board members, Eric Bowen and Russ Teall, serving on the 2014 LCFS Advisory Panel and NBB staff involved at various levels, our industry continues its active engagement on a range of important issues affecting biodiesel in the LCFS re-adoption process -- primarily pathway analysis, the compliance schedule, enforcement, and indirect land use change (ILUC ) issues. The next and final Advisory Panel meeting is tentatively scheduled for October 27th. Information about the meeting and presentations can be found at: http://www.arb.ca.gov/fuels/lcfs/workgroups/advisorypanel/advisorypanel.htm.  


A list of other meetings with related documents can be found here: http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm .


LEGAL ISSUES: See article above.



See article above.  


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).    



See article above on AB 69.


AB 1992, the Low Carbon Fuel Advance Market Commitment, would have authorized 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. It passed the assembly but failed to pass in the Senate Committee on Appropriations in late June.


AB 1566 would strengthen penalties for stealing used cooking oil and add other requirements for grease haulers. It passed the Assembly on May 23rd and is in the Senate Committee on Appropriations.




Below are brief blurbs on some key federal policy issues. Contact the Washington office of the National Biodiesel Board (NBB) at 202-737-8801 for further details.  

According to the NBB, Sen. Chuck Grassley, R- Iowa, has filed an amendment in the Senate that would extend the biodiesel tax incentive for two years, retroactive for 2014 and forward through 2015. The underlying bill that Grassley is seeking to amend is a Democratic jobs bill (S-2569 "Bring Jobs Home Act") sponsored by Sen. John Walsh (D-Mont.). While it appears that the bill will get caught up in partisan gridlock and is unlikely to pass, it is important that Sen. Grassley and other biodiesel supporters in the Senate are maintaining their efforts to extend the incentive. This keeps the issue in front of their colleagues and reminds them that it is important unfinished business. Looking ahead, campaign season is fully underway, and election-year politics are now clouding the legislative outlook in Congress.

The biodiesel tax incentive continues to enjoy bipartisan support and remains in a good position to be reinstated late in the year if Congress can come together and begin moving bipartisan legislation, likely after the November elections. However, it remains to be seen how the election outcome could affect any movement on tax extensions, or if Congress will pass any meaningful legislation.


See Greeting section and lead article above. 


ARGENTINIAN BIODIESEL: The EPA is still considering a proposal that could allow significant volumes of imported fuel to fill the RFS without meeting Congress' stringent requirements. A streamlined package 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.


Fueling Action is NBB's source for information, talking points, sample letters, and contact info for action on RFS and the Biodiesel Tax Incentive.  

NBB Fueling Action Logo





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


Celia DuBose

Executive Director

California Biodiesel Alliance