|
|
|
|
California Biodiesel Alliance News
California's Biodiesel Industry Trade Association
March 2014
|
|
,
We are happy to welcome Gorge Analytical and SC Fuels as new Bronze business members before sharing some member updates and a good deal of weighty state and national policy news.
But first, it's important to note that this month our industry had a chance to celebrate National Biodiesel Day on March 18th by acknowledging our successes on the occasion of Rudolph Diesel's birthday and St. Patrick's Day by choosing a truly "green" beer from California companies like Sierra Nevada in Chico and Stone Brewing Co. in San Diego County whose sustainability credentials include the use of B20 in company vehicles. Cheers!
To view back issues of this newsletter and CBA Email Alerts
click on the "View CBA Email Newsletter Archive" button on our Home page.
|
|
CARB Takes More Time to Develop ADF Proposal
 |
CAL EPA Building
Home of the California Air Resources Board
|
This month, the California Air Resources Board (CARB) posted an advisory announcing the withdrawal of the proposed Alternative Diesel Fuel (ADF) regulation and its removal from consideration at the March Board hearing agenda. While there was no official explanation for this action, a CARB spokesman said last week that the rulemaking had been suspended "to allow more time to develop the regulatory provisions on biodiesel use" within the proposal, according to an article in the California Energy & Climate Report on March 23rd.
The article also included this statement from CARB: "Since we are now involving more regulated parties (i.e., downstream biodiesel/ARB diesel blenders, fuel distributors and retailers) we needed more time to vet the updated proposals by these newly affected groups."
The biodiesel industry continues its very active engagement with CARB on this issue, with the National Biodiesel Board and CBA working in tandem. As mentioned in this newsletter last month, our positive relationship with CARB has been noted in public statements by agency staff as has their belief that increasing biodiesel volumes are necessary for the success of the state's Low Carbon Fuel Standard.
|
|
|
CARB Presents LCFS Re-Adoption Proposals
at March 11, 2013 Public Meeting
On March 11th, CARB held the first of several public workshops to solicit feedback on a number of proposals to be included in their 2014 re-adoption of the state's Low Carbon Fuel Standard (LCFS). The re-adoption was motivated by the Fifth Circuit Court of Appeals' decision in the POET lawsuit, requiring compliance with the California Environmental Quality Act and the Administrative Procedure Act, as well as CARB's own desire to improve the regulation based on lessons learned and stakeholder feedback. Agency staff plans to go to the board with the revised regulation this year, which will include new concepts as well as amendments that were discussed in public workshops in 2013 but put on hold. Below is a summary of the proposals, including several affecting biodiesel directly. Our industry is working with the agency to clarify details and provide comments on these.
New Concepts Being Considered
1. GHG Emissions Reductions at Refineries
This proposal would allow refineries to generate credits for investments that produce GHG reductions, though the credits would not be applied to the CI of the fuel. The difference between the refinery's baseline transportation fuel CI and the new transportation fuel CI (after project completion) would be determined by CARB and credits applied to the refinery. The credits would be able to be applied against the refinery's Cap and Trade obligations.
2. Modification of Compliance Curves for Gasoline and Diesel Standards
While there is no proposal to change the LCFS's fundamental average carbon intensity target of 10 percent by 2020, this proposal looks at altering the program's Compliance Schedule, which is currently frozen at the 2013 level of 1 percent, and is expected to stay there until the re-adoption is completed in 2015. Staff is considering some post-2015 curve-smoothing, meaning that annual levels might rise gradually from that 1 percent. Also, staff is looking at revising the schedule with post 2020 targets that call for CI reductions greater than 10 percent (which is consistent with the draft Scoping Plan Update) and other potential revisions. Staff is involved in in-depth studies to create low-CI fuel projections through 2030 able to account for the effect of petroleum prices on biofuels with low, medium, and high projections and to determine which fuels are likely to come into the state based on the demand-pull incentive structure (i.e., lowest cost compliance) of LCFS.
3. Refinery-specific Crude Oil Incremental Deficit Accounting
This proposal would offer low-complexity/low-energy-use refineries a one-time, irreversible opportunity to opt out of the California Average Crude Provision of LCFS and to use refinery-specific accounting to determine their crude oil incremental deficit.
4. Fuel Pathways and Producer Facility Registration
CARB proposed to restructure fuel pathway certification and registration by creating a two-tiered pathway process. The producers of Tier 1 fuels -- defined as conventionally produced starch- and sugar-based ethanol, biodiesel, renewable diesel, natural gas, and electricity -- would be registered into one of a series of mutually exclusive CI bins into which its CI falls. Tier 1 fuels in a given bin would have the same CI -- the midpoint of that bin's CI range. The bins would probably categorize fuels within CI scores of between 5-10 grams, according to Wes Ingram of CARB.
Tier 2 fuels, or next-generation fuels -- including cellulosic alcohols, Biomethane, Hydrogen, drop-in fuels, and possibly fuels not yet known -- would use an application process that is an enhanced version of the existing Method 2 process, and likely would require more and better quality data. Any fuel (first or next generation) produced using a qualifying innovative method -- low-CI process energy (e.g., biogas); waste or residual feedstock; dedicated renewable electricity source; carbon capture and sequestration -- would fall into the second tier.
Also the California-specific GREET modeling would be replaced with the GREET model maintained by Argonne National Laboratory and existing CI scores recalculated using this model. For more details, see Appendix A of the Low Carbon Fuel Standard Re-Adoption Concept Paper.
LCFS Amendments from 2013
Amendment 1: Cost Containment Provision
Two options were presented. The Credit Window Option would allow regulated parties who are unable to obtain sufficient credits on the open market for that year's compliance to purchase compliance-only credits directly from CARB at a pre-determined price with the funds going toward related program goals. Spending these proceeds would require going through the legislative process. CARB staff prefers the Credit Clearance option, which would allow regulated parties to carry deficits over to the next compliance period if they buy their pro-rata share of credits during a "credit clearance" period (these would occur at the end of a compliance year in which some regulated parties are unable to obtain the credits on the open market that they need for compliance). Staff will consider price caps for LCFS credits and a price floor for LCFS credits.
Amendment 2: Revised iLUC Values
In 2009/2010, the CARB board approved iLUC values for corn ethanol, sugarcane ethanol, and soy biodiesel. Later the board instructed staff to establish an Expert Working Group to study advances in science and to hire experts to improve iLUC analysis, which has resulted in some important changes. Two significant ones are the development of new separate carbon emissions factor modeling to better estimate carbon released upon land conversion and the updating of the GTAP2 model, which now includes the data needed to estimate iLUC for canola biodiesel and sorghum ethanol.
CARB has not yet released all the data on this, but preliminary results indicate reductions in iLUC values for soy biodiesel, sugarcane ethanol, and corn ethanol similar to those defined by the U.S. Environmental Protection Agency. The current model showed no change for Dried Distiller's Grains with Solubles (DDGS). Below is CARB data from slide 61 of the iLUC Workshop Presentation:
|
iLUC: Preliminary Results
(1440 scenario runs for current results)
|
|
|
| |
Biofuel
|
2009
(g/MJ)
|
2014
Ave. (g/MJ)
|
Range
(g/MJ)
| |
Corn Ethanol
|
30.0
|
23.2
|
13.1 - 40.0
| |
Sugarcane Ethanol
|
46.0
|
26.5
|
13.5 - 44.1
| |
Soy Biodiesel
|
62.0
|
30.2
|
17.6 - 52.1
| |
Canola Biodiesel
|
n/a
|
41.6
|
24.8 - 70.2
| |
Sorghum Ethanol
|
n/a
|
17.5*
|
10.9 - 28.4*
| * Only around 1200 runs completed
|
|
|
|
This subject was considered in great detail in the afternoon session of the meeting. For more info, see Appendix B of the Low Carbon Fuel Standard Re-Adoption Concept Paper and the iLUC Workshop Presentation and Handouts and look for announcements of upcoming workshops on this issue.
Amendment 3. Electricity Provisions
This proposal to make electricity used in fixed guideway systems and electric forklifts eligible to opt in to LCFS and generate credits is consistent with the goal of bringing a broader spectrum of low carbon fuel technologies into the program and would provide greater compliance flexibility. Details of the staff proposal, including a modification of a requirement to provide metered electricity data for residential charging, are presented in Appendix C of the Low Carbon Fuel Standard Re-Adoption Concept Paper.
Amendment 4: Low-Energy-Use Refinery Provisions
To address concerns from refineries that use simple processes to refine transportation fuels, CARB staff is proposing to recognize the CI difference in transportation fuel carbon intensities between low-complexity/low-energy-use refineries and the complex refineries within the LCFS Reporting Tool. Toward that end, they have investigated the total energy use and complexity of each California refinery using the Nelson Complexity Score. This proposal would require that a refinery have both a modified Nelson Complexity score of five or less and an annual energy usage of five million MMBtu or less in order to be considered low-complexity/low-energy. Details of the staff proposal are detailed in Appendix D of the LCFS Re-Adoption Concept Paper.
Amend 5. Innovative Technologies for Crude Oil Production
CARB is considering amendments to allow crude producers to opt-in as a regulated party and earn credits based on the use of innovative methods -- solar, wind, biomass-based power generation, and biomass-based steam generation -- for fuel supplied to California refineries. A white paper will be released soon that looks at the potential benefits of widespread adoption of solar steam and solar or wind-based electricity at California oil production facilities.
Amendment 6. OPGEE Revisions and Crude Lookup Table Revisions
There were minor revisions to OPGEE v1.1 since last year (see details on the workshop webpage and in Appendix E of documentation). Draft CI values for the Crude Lookup Table (Table 8) will be posted for feedback this spring, including over 100 internationally and nationally marketed crudes and almost 200 California oil fields, with a limited number of default CIs for crude not listed in the table. CARB expects slight increases to most draft CI values presented in March 2013 and proposes moving to a three-year cycle for OPGEE and Table 8 revisions to provide market certainty.
Amendment 7. Enhancements to Reporting and Record Keeping Requirements
To improve the traceability of fuels to the source, staff is proposing a new provision that requires reporting of all Transaction Types identified in the regulation, including: transactions without obligation transfer; to come up with a modified registration process allowing them to do a more thorough pre-registration check of each company; to require pending credit transfers to be completed before submission of annual reports; and to streamline the Opt-in/Opt-out process. They also propose adding fuel production facility registration information to the Product Transfer Document (PTD), including a statement on the PTD that clearly identifies that the fuel has been reported under LCFS so that it can't be re-imported and reported again to receive more credits.
Amendment 8. Enhancements to LCFS Credit Provisions
Staff proposes to formalize the use of the Credit Bank & Transfer System (CBTS) and will add or clarify details on: the automated credit transfer process; the voluntary posting of credits for sale; requirements for credit brokers; a default credit retirement hierarchy; the idea of a limited expansion of the retroactivity of credits; that all LCFS credits being calculated in the LRT-CBTS; procedures to address situations where more than one regulated party is claiming LCFS credits for the same volume of fuel; "Credits on Hold "pending physical pathway demonstration; and language allowing ARB Executive Officer authority to retire credits found to be invalid.
Amendment 9. Enforcement Provisions
Changes being considered include: regulated parties must meet their Annual Compliance Obligation and retire credits equal to that obligation; allowing deficits to be carried to next compliance year under certain conditions; stiff fines for strict liability, negligence, and willful and intentional violations with the Executive Officer having the authority to suspend an account, revoke credits, and limit or prohibit transfers of credits; and a downstream CI obligation for diesel.
Support for LCFS
CBA is committed to the LCFS and was gratified to hear strong comments during the meeting from environmental leaders -- including those representing the Natural Resources Defense Council, the Environmental Defense Fund and the American Lung Association -- who pointed to the success of LCFS and offered feedback on some of the proposals presented, all aimed at preserving the integrity of this groundbreaking program.
|
Bill to Stop Grease Thieves from Cashing In on New Gold
Passes First Legislative Test
ALTADENA PATCH: Posted by Michelle Mowad (Editor), March 24, 2014 at 03:52 PM
"Kitchen grease theft has become big business. Thieves strike in the night, siphon off used grease from the backs of restaurants and sell it on the black market to renderers who turn it into liquid gold - biodiesel fuel," explained Assemblymember Chris Holden (D-Pasadena). 'This bill will help law enforcement sort out the legitimate companies from the thieves."
Assemblymember Holden's bill (AB 1566) to combat the growing incidences of kitchen grease theft was overwhelmingly approved today in Assembly Transportation Committee.
AB 1566 gives law enforcement the tools they need to stop modern-day oil rustlers by beefing up requirements for licensed haulers, increasing the penalties for stealing grease and allowing law enforcement to impound vehicles for up to 15 days.
"Currently, law enforcement's hands are tied when it comes to enforcement because grease theft is not included in the vehicle code." said Holden. "This bill closes that loophole. Now that oil prices have skyrocketed, so have grease thefts. Obviously they're stealing the grease because it's worth a lot."
According to the California Department of Food and Agriculture, a typical fast-food restaurant produces 150-250 pounds of grease a week and a fully loaded pumper truck could bring in as much as $900 at a recycling center.
AB 1566 now goes to Assembly Agriculture for consideration.
|
|
(Biodiesel Magazine)
Springboard Biodiesel diversifies with launch of local fuel sales
Chico, Calif.-based small-scale biodiesel equipment provider broadens business with up to 350,000 gallons of biodiesel production, sales
 Known for its small-scale biodiesel processing systems (the BioPro), sales of which approach 1,000 units over the past six years, Chico, Calif.-based Springboard Biodiesel announced its launch of a local biodiesel buyers club for individuals and companies in the Butte County area. Springboard recently received a grant from the California Energy Commission that gave the company the opportunity to design and build a new, larger biodiesel production facility in Chico.
"With the help of the CEC and countless organizations in and around Butte County, Springboard is ready to produce ASTM-grade biodiesel in its new, state-of-the-art facility and enable businesses and individuals to enjoy the many benefits of burning biodiesel," said Springboard CEO Mark Roberts. "While our target market will remain primarily local, corporate and municipal consumers of diesel, who want to incorporate biodiesel into their fleets, we wanted to compliment that with a local buyers club."
Springboard won't follow the filling station model of pump-and-go, though; rather, club members can buy prepared volumes of 10, 55 and 275 gallons.
"We believe that producing locally and consuming locally is a sustainable and profitable energy model that will benefit the local communities where our systems are located," Roberts said. "Ultimately, we plan to build a broad network of these 'micro facilities,' all of which are designed to provide competitively priced, cleaner burning biodiesel to local communities that have a natural and more easily accessible feedstock."
Working with Smart Alternative Fuels, a Redding, Calif.-based used cooking oil collector, Springboard will be processing up to 350,000 of biodiesel annually in its first facility in Chico.
"It's exciting to bring this alternative to Butte County," Roberts said. "We have a relatively large diesel fleet, and by replacing some of that diesel, we can create a viable new market with new green collar jobs, as well as contribute to the reduction of the area's carbon footprint."
|
|
REGULATORY AND POLICY ISSUE UPDATES
  
CALIFORNIA AIR RESOURCES BOARD: ADF RULEMAKING PROCESS See lead article above.
CALIFORNIA AIR RESOURCES BOARD: LOW CARBON FUEL STANDARD (LCFS) PUBLIC WORKSHOPS ON LCFS CHANGES: See article above. LEGAL ISSUES: This 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. It is not yet known if the court will decide to rule in the case. MONTHLY REPORTS: In addition to its more detailed quarterly reports, CARB is now issuing monthly reports, which in one page chart the total number of number of transfers, the total volume (credits-MTs) and the average price ($ per Credit) for that month as well as for the previous months, quarters, and years. Other information includes the price range for the month; a breakdown of entities participation in transfers through that month (selling and buying); the total credits transferred through that month; and the amount by which credits exceed deficits to date as accurately as possible, which is 2,038,000 MT through the end of Q3. The reports can be found here: http://www.arb.ca.gov/fuels/lcfs/lrtmonthlycreditreports.htm.
CALIFORNIA ENERGY COMMISSION (CEC): IEPR
CBA attended the March 27th workshop that began the 2014 Integrated Energy Policy Report Update process focusing on reducing pollution from the transportation sector and how the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) can contribute. CBA will also participate in an IEPR Workshop on Transportation Technology over the Next Ten Years to be held at 9:00 a.m. at the CEC building on April 10th. To receive further notification of documents concerning this proceeding, sign up for the Energy Policy list here: http://www.energy.ca.gov/2014_energypolicy/. Presentations and audio from the meeting will be broadcast via WebEx, details at: http://www.energy.ca.gov/2014_energypolicy/documents/#04102014.
CALIFORNIA ENERGY COMMISSION (CEC): AB 118 FUNDING
PROGRAM OPPORTUNITY NOTICE (PON): On January 15th, the California Energy Commission (CEC) announced $24 million in grants for pilot and commercial-scale advanced biofuels production facilities for new, low-carbon biofuel production facilities, projects at existing biofuel production facilities that expand or modify facilities to increase production capacity or projects that lower the carbon intensity of fuels produced at existing biorefineries.
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) in April or May. Interested parties are encouraged to stay informed by signing up for the listserve here: http://www.energy.ca.gov/contracts/#current.
STATE WATER RESOURCES CONTROL BOARD: UST REGULATIONS
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).
CALIFORNIA LEGISLATIVE ISSUES
See article above.
FEDERAL ISSUES
RENEWABLE FUEL STANDARD (RFS)
The NBB continues its rigorous leadership on this very important issue, including getting our message of support for higher 2014 RVO volumes to Clean Cities coordinators from around the country. A group called Americans United for Change has been active in the RFS debate with two TV ad campaigns and a third digital ad campaign previous to their most recent expenditure of almost $100,000 on ads on the Sunday news talk shows in the DC media market, according to OPIS.
The final decision will be made in June, and it's not too late to make your voice heard. Op ed pieces and letters to the editor in your local paper are especially encouraged. Here's a great example:
A recent article about CBA member company Imperial Western Products (IWP) in the Palm Springs publication The Desert Sun cited the importance of this issue and included statements from division manager (and CBA chairman), Curtis Wright, and quotes from the NBB's CEO, Joe Jobe, about our industry's efforts to persuade the EPA to raise its 2014 biodiesel targets to at least 1.7 billion gallons.
TAX INCENTIVE
Last month we reported that Senators Maria Cantwell, D-Wash., and Charles Grassley, R-Iowa, introduced S. 2021 to extend the expired biodiesel tax incentive for three years, retroactive to Jan. 1, 2014 and to change it from a blenders to a producers credit. And that Sen. Ron Wyden, D-Ore., the new chairman of the Senate Finance Committee, is enthusiastic about tax extenders legislation, the larger package of tax incentives that would most likely be the vehicle for ultimately passing the biodiesel incentive.
The expectation is that the Senate Finance Committee will hold a mark-up on tax extenders legislation as early as the first week of April. NBB recenlty joined with several other biofuel trade organizations in sending a letter to Chairman Wyden and Ranking Member Orrin Hatch (R-Utah) urging an extension of advanced biofuel tax incentives. Please contact your members of Congress and ask them to push for an extension of the biodiesel tax incentive. To find contact info for your Senator or Representative, go to www.senate.gov or www.house.gov.
Get background and talking points at: http://www.biodiesel.org/policy/fueling-action-center
EPA QAP RULE
The NBB, through the work of its RIN integrity task force, has been involved in making recommendations to the EPA -- including on auditing requirements and RIN separation and import regulations -- to improve what they believe is a reasonable quality assurance proposal to prevent fraud and strengthen RINs markets. On March 24, NBB staff met with the White House Office of Management and Budget (OMB) to discuss the pending rule.
Argentinian Imports Issue
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 could result in large volumes of Argentinian biodiesel coming into the US and harming local producers. The time frame for a decision is not known, but the NBB has been expressing their concern about this proposal by meeting with the Administration, the EPA, USDA and other agencies. The NBB has asked the EPA to provide an opportunity for public comment. For more information on this issue and how you can take action, call the Washington DC office of the NBB at 202-737-8801.
|
|
|
|
|
CBA WELCOMES NEW MEMBERS
Gorge Analytical is a BQ-9000 accredited, state of the art biofuel testing facility committed to quality and customer service.
Serving more than 35,000 customers, SC Fuels is a fuel distribution and service company that delivers gasoline, diesel fuel, alternative fuels and other petroleum products in over 15 states in the United States at the most competitive prices.
______ JOIN CBA AS AN INDIVIDUAL, A NONPROFIT, OR A BUSINESS _____
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).
_______ SIGN UP FOR EMAIL ALERTS _____ 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. _______ VIEW PAST NEWSLETTERS AND EMAIL ALERTS _____ Just click on the "View CBA Email Newsletter Archive" button on our Home page. |
|
Join Industry Leaders and Policymakers at the
Second Annual Clean, Low-Carbon Fuel
sSummit
Wednesday -- April 2nd -- 11:30 am
Sacramento
CALSTART's Second Annual Clean, Low-Carbon Fuels Summit is a unique gathering of industry leaders and policymakers focused on assessing the status of our state's low-carbon transportation fuels markets and policies and looking toward the future.
Changes are in the works as the state moves forward with the re-adoption of the Low Carbon Fuel Standard and the transportation fuels sector prepares for compliance under AB 32's Cap and Trade Program in 2015. State officials are also considering hundreds of millions of dollars of potential public investments in low carbon transportation. To discuss these issues and more, the Summit will include panels on:
* Clean, Low-Carbon Fuels Market and Technology Progress Report
* The Role of Policy: Supporting California Leadership in the Transition to Cleaner Fuels
* Perspectives on Cleaner Transportation: Needs, Challenges, and Opportunities
* Incentives, Innovation, and Scale: What Is the Best Role for the Public Sector?
The Summit is hosted by CALSTART in coordination with Environmental Entrepreneurs (E2), the California Electric Transportation Coalition (CalETC) and the California Natural Gas Vehicle Coalition (CNGVC).
Sponsors include the Advanced Biofuels Association, the Bay Area Air Quality Management District, Southern California Edison, the Southern California Gas Company, Sempra Energy, Biodico, the California Biodiesel Alliance, Clean Energy, Clean World, the Environmental Defense Fund, the Grant Farm, Pacific Ethanol, SMUD, and Waste Management.
This event is by invitation only and space is limited, so please contact Celia DuBose if you are interested: [email protected]. See the agenda here:
|
|
Thank you for your time and efforts on behalf of biodiesel. I look forward to working with you.
Sincerely,
Celia DuBose
Executive Director
California Biodiesel Alliance
|
|
|
|
|
|
