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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 2015 was 126,450,435 and is expected to rise above 154,000,000 when final numbers are in.



Federal Issues

 
Federal Tax Incentive

The federal budget deal was passed with an extension until April 28th and without some three dozen tax breaks, including the biodiesel tax credit. CBA will continue to work with the National Biodiesel Board (NBB) in 2017 on a vehicle to reform the biodiesel tax incentive as a domestic production credit.

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 LCFS rulemaking is 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 read the article below and 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.

    CBA Restructures Membership
    Launches Vendor/Service Provider Partner Sponsor Program

     
    At CBA's 2016 Board of Directors retreat, the directors discussed the need to restructure CBA membership to differentiate between direct biodiesel industry participants and those who fall into other categories such as vendor/service providers, non-profits, and educational institutions.

    Based on those discussions, changes have been made to the membership structure that better align with these differentiations. Key changes include the implementation of corporate membership dues that reflect the level of participation in the California market and the establishment of a Vendor/Service Provider Partner Sponsor program that offers a range of sponsorship opportunities for companies who wish to showcase their support for this booming industry while benefitting from the combined buying power of our industry's members.

    The revamped structure, rates, and benefits became effective July 1, 2016 for new members and sponsors and January 1, 2017 for current members. CBA's Board of Directors continue to be Corporate members with additional voting privileges and the ability to participate in establishing CBA's agenda and positions on various issues impacting the California biodiesel industry. Annual dues for the new category of Direct Industry Corporate Members are tied to annual volumes of biodiesel or feedstock (in gallons) sold within California. Direct Industry Corporate Members may apply to join the Board of Directors (application available on our Join Us page).

    CBA is excited about our new Vendor/Service Provider Partner Sponsor program, which offers three levels of sponsorship to biodiesel industry service providers and vendors, including parts and equipment manufacturers and distributors, trucking companies, chemicals and additives suppliers, and accounting, legal, RFS auditing, and other service providers. This new program replaces the option of CBA membership for this category of industry participants.

    Revisions have been made for Non-Profit Organizations, Educational Institutions, and Individuals levels as well. See our Join Us page for details.


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

     
    The ADF regulation, which became effective January 1, 2016, affects all those who handle biodiesel in the state. It includes reporting and recordkeeping requirements applicable to entities in the biodiesel industry. 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.


    California Appellate Court Hears Oral arguments on LCFS in POET Case

     
    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 are seeking 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.

    The case is now in the hands of the Court, which should render a decision in the next 90 days.

    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."