CBA Welcomes New Members This Year
CBA's 2014 Conference
CBA's successful third annual California Biodiesel and Renewable Diesel Conference was held on January 20th, 2014 at the SanDiego Convention Center and was co-located with the National Biodiesel Conference & Expo.
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Regional LCFS Roundtable
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.
Explores Greater Group Collaboration
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."
Joint CBA/NBB Comment Letter
Presents Substantive Suggestions on Alternative Diesel Fuel Rulemaking
On April 17th, the California Air Resources Board held its first workshop to discuss a revised Alternative Diesel Fuel (ADF) regulation, a complex proposal explained in last month's newsletter article CARB Resets Clock on Revised ADF Proposal. It details 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. All related public documents are available here: http://arb.ca.gov/fuels/diesel/altdiesel/biodiesel.htm.
In response, CBA and the National Biodiesel Board (NBB) submitted a joint letter of public comment thanking CARB staff for their diligence and professionalism in designing a process that has been inclusive and consensus-based and for a regulatory framework that is transparent and provides certainty for producers. While supporting the direction of the regulation, the letter reiterated some key points of our industry's arguments during this multi-year process and offered substantive suggestions.
Importantly, the letter led with ".... we do not believe biodiesel's inclusion in this regulation is necessary from a scientific standpoint. This view is based largely on air shed modeling studies of the South Coast Air Quality Management District, which show no negative health impacts from widespread use of biodiesel. The studies were conducted by Environ, originally for the National Renewable Energy Laboratory (NREL) and later for the National Biodiesel Board (NBB).
The Environ studies show that even with small NOx increases, the 50 percent or greater decreases in all other pollutants needed for ozone formation (namely PM and hydrocarbons) creates a self-mitigating effect for biodiesel. At a minimum, since the studies find an absence of negative impacts from widespread use of B20, we feel ARB would be justified in establishing a biodiesel significance level at 20 percent of the total diesel market rather than B10."
Without opposing the concept, our industry expressed the opinion that the data and literature don't support the need for two separate NOx control regimes, saying that it appears that in the extreme non-attainment districts "layers of protection are being stacked on top of layers of protection without objective and convincing justification. The result of this approach will be an artificially reduced level of biodiesel use in these areas, which by extension increases the presence of key pollutants in the atmosphere such as PM, Carbon Monoxide, and Hydrocarbons."
SUGGESTIONS FOR ADDITIONS TO THE EB CALCULATION
The EB calculation as proposed is 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. Citing compelling data on the NOx-neutrality of the New Technology Diesel Engines (NTDEs) in 2010 and later heavy-duty engines, and the state's fleet turnover requirements compelling the use of those engines according to a schedule, our industry argued that the advantages of NTDEs should be factored into the EB calculation.
Another suggestions is that CARB staff explore providing a credit in the EB calculation for used cooking oil (a high percentage of what's produced instate) and canola oil, which have chemical properties (higher cetane) that reduce NOx emissions "relative to ARB data on average biodiesel."
EXTREME NON-ATTAINMENT AREAS
While supporting the Safe Harbor idea for regulating biodiesel in extreme non-attainment areas as simple and flexible for all participants within the distribution chain and not materially impacting the cost of biodiesel, the letter points out that it would severely limit the amount of biodiesel in the marketplace. The concept would allow biodiesel producers to sell all blends into these areas, but the fuel could only be used in blends at or below B9.5 (per a required note on each bill of lading).
The letter includes suggestions related to summer and winter ozone seasons and the exemption thresholds for fleets and retailers who serve 95 percent or more light and medium duty vehicles or NTDEs. It supports the continued opportunity for fleets operating under a Department of Measurement Standards variance to apply to the Executive Officer for an exemption (data collected under the program is used in ongoing specification standard setting work at ASTM International for biodiesel blends above B20).
Based on the understanding that the term "enhanced reporting" refers to record keeping and reporting of biodiesel volumes and blends by the full chain of custody - the biodiesel producer, the retailer/fleet, and all distributors/blenders in between the producer and retailer - our industry strongly recommends eliminating the enhanced reporting requirement at EB7.5, calling it redundant and "impossible to comply with for many members of the chain of custody."
NOTE: This article includes highlights of the joint CBA NBB comment letter.
Please read it for further details and explanations of the information presented here as well as the remaining list of recommendations related to both the extreme non-attainment and the statewide areas.
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..
CALIFORNIA AIR RESOURCES BOARD: LOW CARBON FUEL STANDARD (LCFS)
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. 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: The Renewable Fuels Association and Growth Energy, along with 21 state attorney generals, have 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..
CALIFORNIA AIR RESOURCES BOARD: AB 32
CAP AND TRADE AUCTION PROCEEDS: At the April 2nd Clean, Low Carbon Fuels Summit, Assemblywoman Nancy Skinner, Chair of the Committee on Budget, told the group she was 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). CBA has submitted a proposal for a biodiesel production incentive and plans to continue to pursue this funding option for biodiesel industry projects going forward.
CALIFORNIA ENERGY COMMISSION (CEC): AB 118 FUNDING
PROGRAM OPPORTUNITY NOTICE (PON): On May 7th, the CEC issued a Notice of Proposed Awards (NOPA) for Round 1 of PON-13-609, Pilot-Scale and Commercial-Scale Advanced Biofuels Production Facilities, which allocates $9 million each for biomass diesel and ethanol and $6 million for biomethane.
According to the CEC: "A second round of scoring will be performed for all applications that were not scored in Round 1. Applications scored, but not funded in Round 1 will compete for funding in Round 2. The notice for Round 2 will include the scores for all applications scored in both Round 1 and Round 2. The Energy Commission anticipates the Round 2 notice of proposed awards will be available in July 2014."
STATE WATER RESOURCES CONTROL BOARD: UST REGULATIONS
The new permanent UST law that took effect in June of 2012 was discussed at CBA's January 20th conference by Laura S. Fisher, Chief, UST Technical Unit, State Water Resources Control Board. She explained 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. Detailing that the new regulation applies only to double-walled components with an existing UL listing for petroleum and that statements may only come from the manufacturer of the component (and that If there are later conflicting statements, UL prevails), she clarified that the Water Board gathers these statements, reviews them, then posts them on their website (CBA did this prior to the new law).
The agency also posts Leak Detection Equipment information for diesel, all of which is approved for B6 through B20 meeting ASTMD7467 and biodiesel B100 meeting ASTM D6751 whether or not these alternative fuels are included on individual data sheet (check their site for the few exceptions). She also let the group know that NBB has proposed to work with the National Leak Detection Workgroup on listing or testing equipment with blends B21 - B99 and to work with UL on testing and/or listing of biodiesel blends above B20.
The new Affirmative Statement of Compatibility by Manufacturer forms can be found at the Water Board 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 come in, but revised forms are not labeled as such. Also, please be advised that your CUPA may require engineering approvals for non-integral secondary containment (sumps and UDCs).