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California's Biodiesel Industry

 
In 2016, in-state biodiesel production rose to over almost 39 million gallons. California currently has 9 biodiesel production plants, with several plants under construction or undergoing expansion. The nine plants are operated by: Agron, Biodico, Buster Biofuels, New Leaf Biofuel, Community Fuels, Crimson Renewable Energy, IWP, GeoGreen, and Simple Fuels.

The total gallons of biodiesel reported sold in California under the LCFS program in 2016 was 163,000 up from 126,450,435 in 2015.



Federal Issues

 
Renewable Fuels Standard (RFS) Volumes

Final Renewable Fuel Standard volumes are:

The 2017 RVO Program:
  • Conventional Biofuels: 15 billion gallons (ethanol equivalent gallons)
  • Advanced Biofuels: 4.28 billion gallons (ethanol equivalent gallons)
  • Cellulosic Biofuels: 311,000,000 gallons (ethanol equivalent gallons)
  • Total Renewable Fuels: 19.28 billion gallons (ethanol equivalent gallons)

    Included within the Advanced Biofuel Program is the above volume of cellulosic biofuels and a previously announced volume for Biomass-based Diesel of 2.0 billion gallons (which equals approximately 3.1 billion ethanol equivalent gallons of Advanced Biofuels). The volumes for Advanced Biofuels and total Renewable Fuels (including 15 billion ethanol equivalent gallons of Conventional Biofuels) represent increases from EPA’s proposal in June of 2016.

    The 2018 RVO Program:
    The EPA also finalized a 2018 volume for Biomass-based Diesel at 2.1 billion gallons. NBB had advocated for a 2017 Advanced Biofuel Program of at least 4.75 billion gallons (ethanol equivalent gallons); and a 2018 Biomass-based Diesel program of 2.5 billion gallons. The program has grown from 1.0 billion gallons in 2012.

    Biodiesel is an advanced biofuel made from waste or virgin vegetable oils or animal fats. It is a sustainable, cleaner-burning, diesel fuel replacement that meets strict quality specifications. Biodiesel derived from waste can reduce greenhouse gas emissions by 80% or more.




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  • Join Us to Access Key Industry Information
    Now Made Available to Members Only

     
    Opportunities abound, but the word "challenging" is an understatement when it comes to describing the regulatory landscape for biodiesel in California. Those doing or seeking to do business in the state are faced with an array of complex compliance requirements and a dynamic policy environment. Key rulemakings are underway now.

    CBA has worked to solve regulatory challenges and has brought the information about this policy work to the public as articles and updates in our newsletter and on our website since both were first published in 2011. CBA will now provide access to a broader range of detailed information, including compliance requirements not previously presented here -- and not gathered together anywhere else -- on our new webpage for Members Only.

    Please review our Join Us page for rates and other details about becoming a CBA member or a Partner Sponsor if you are a vendor/service provider.

    Court Ruling in POET Case Freezes Diesel Compliance at 2017 Levels
    Keeps LCFS and Alternative Diesel Fuel Regulation in Place

     
    The 5th District Court of Appeals heard oral arguments in the case of POET v. ARB on March 23rd, 2017. The attorneys for POET argued that the California Air Resources Board (ARB) acted in bad faith by not completely addressing the CEQA violations as directed by the Court and sought a suspension of the LCFS to 2013 levels and a complete severance of biodiesel from the regulation.

    The Attorney General's office, representing ARB, argued that ARB did act in good faith by adopting the Alternative Diesel Fuel regulation and disclosing through numerous public hearings the NOx issues related to biodiesel. The Attorney General argued POET's remedy would harm the biodiesel industry and others who are not to blame for the unintended mistakes of the ARB. She also argued POET's remedy would have negative impacts on the environment. The Attorney General requested the Court to request ARB to address the needed corrections in a timely fashion with no changes to the LCFS. In the alternative, the Attorney General argued that ARB could suspend LCFS credits for biodiesel for the remainder of 2017 and leave the other elements of the LCFS intact, giving the ARB enough time to address the remaining CEQA violations.

    National Biodiesel Board CEO Donnell Rehagen had this to say, "The California Air Resources Board has worked hard over the past several years to create a program that is now successfully bringing cleaner fuels into the marketplace. Biodiesel is a clean, American-made fuel that has dramatic emissions benefits. Under the Low Carbon Fuel Standard, credits generated from biodiesel comprise about a quarter of overall program compliance. Unfortunately, this lawsuit appears to be far more about market share for specific companies than clean air for Californians."

    On April 10, 2017, the court, issued its decision.  In that case, POET appealed the lower court’s finding that CARB complied with an earlier order to review and mitigate, as necessary, NOx emissions from biodiesel under the original Low Carbon Fuel Standard (LCFS).  CARB had argued that it properly reviewed and mitigated NOx emissions when it re-adopted the LCFS in 2015 and promulgated the alternative diesel fuel (ADF) rule.

    As indicated in a tentative ruling it issued, the Appellate Court did find fault with CARB’s review of NOx emissions and determined that CARB must take additional corrective action.   However, the Appellate Court did not return the LCFS to 2013 levels (as requested by POET) nor did it invalidate the re-adopted LCFS.  It also did not sever biodiesel only from the LCFS program, despite requesting additional briefing on such a remedy.  Rather, the Court found the LCFS should remain operative, except that the standards for diesel fuel and its substitutes (e.g. biodiesel) would remain at the requirements for 2017 until CARB takes corrective action and such action is approved by the lower court. The Alternative Diesel Fuel (ADF) rule also remains in place.  CARB still has an opportunity to seek an appeal of the Appellate Court’s finding of a violation to the State Supreme Court.

    It is CBA's understanding that the court's ruling freezes the compliance requirement for diesel at 2017 levels but that biodiesel can be used for compliance on the same basis as other LCFS fuels.

    Alternative Diesel Fuel Regulation (ADF) Affects All Who Handle Biodiesel in CA

     
    NOTE: ARB will hold a workshop in the next few months to discuss new ADF reporting requirements for 2018, TBD.

    The ADF regulation, which became effective January 1, 2016, affects all those who handle biodiesel in the state. It prohibited blends above B20 for sale or use in engines as of that date and required new reporting and recordkeeping as well. Biodiesel producers, importers and blenders are required to submit quarterly reports, the first of which were due June 30, 2016. 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 new FAQ and Reporting Forms at: http://www.arb.ca.gov/fuels/adf/adfdocs.htm.

    The presentation for the May 23rd meeting, which has helpful diagrams, is here: http://www.arb.ca.gov/fuels/diesel/altdiesel/meetings/meetings.htm.

    CBA members have access to an ADF Summary document, which provides an overview of the regulation with background and Q and As.


    Industry Comments on Proposed LCFS Verification and Monitoring Plan
    Call for Exact Mirroring of EPA's RFS QAP

     
    CBA and the National Biodiesel Board (NBB) have submitted several joint comment letters arguing for a "QAP+LCFS" compliance approach, which would dramatically reduce costs for the industry and California fuel consumers, and responding to ARB requests for input on specific issues.

    CBA members receive updates on the progress of this rulemaking in the monthly newsletter and on the Members Only webpage. Public comment letters are posted here: http://www.arb.ca.gov/fuels/lcfs/workshops/feedback.htm#06022016.

    ARB's LCFS meetings page has details and updated presentations: http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm#06022016.