FOR THE 4TH ANNUAL
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February 4th 2015
Capitol Plaza Ballroom
Understanding the Unique Benefits and
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Regulatory Landscape of Biodiesel
-- California's Advanced Biofuel
As an advanced biofuel, biodiesel is a key element in the success of our nation's efforts to combat climate change under the EPA's Renewable Fuel Standard because it lowers greenhouse gas (GHG) emissions by at least 50 percent. In California, where a greater percentage of biodiesel is made from second-use feedstocks, biodiesel's even lower GHG emissions profile is an important part of the state's success under its bellwether carbon reduction program the Low Carbon Fuel Standard.
And biodiesel's benefits just keep coming . . .
Join us at our 4th annual California Biodiesel Conference for a showcase of biodiesel's profile as a sustainable, cleaner burning alternative fuel bringing health and economic benefits to California, including those communities most in need.
CBA's 2014 California Biodiesel and Renewable Diesel Conference conference presentations are available on our About
California's Biodiesel Industry
California currently has 8 biodiesel production plants. In 2013, instate production reached over 28 million gallons, and 2014 production is expected to reach 35 million gallons. With 2 more plants expected to come online in 2015 and major expansion underway at several of the state's largest plants, we hope to see instate production climb to 75 million gallons in 2015.
Supreme Court Denies Appeal of California's Landmark Low Carbon Fuel Standard
By Environmental Defense Fund | June 30, 2014
Lower Court Decision Upholding Groundbreaking Clean Fuel Protections Will Stand
(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.
CBA Takes It to the Next Level:
Since 2011, CBA has grown from a handful of businesses, working behind the scenes, to include over 50 feedstock suppliers, marketers and stakeholders, including all of the state's biodiesel producers. CBA is the recognized voice of California biodiesel, respected for our years-long efforts in the process of bringing biodiesel to market in the state and leading the charge to fight (or support) regulatory and legislative challenges that threaten (or strengthen) the biodiesel market in California.
Restructures Membership Dues To Raise Funds for State Legislative Strategy
Now, for the first time since 2011, CBA has revised our membership fee structure in order to take the next big step in promoting and growing our industry and to enable CBA to establish a stronger voice in Sacramento on regulatory and legislative issues that impact the California biodiesel market.
The CBA board, on December 9th, voted unanimously to raise membership dues as part of a plan to accomplish new goals through a legislative strategy designed to benefit our industry and educate a new batch of representatives in Sacramento about biodiesel and its importance under LCFS, the world's best transportation fuels carbon reduction model.
CBA wishes to thank all of the industry participants who have joined with us as members of our trade association. With your help we have moved from a biodiesel industry in its infancy to establishing a large commercial market for biodiesel, and are now reaching out to bring all producers and marketers participating in California's biodiesel marketplace under our growing tent. We are excited about this new phase of our work and look forward to achieving greater success in 2015 and beyond with your increased support.
See our Join Us webpage for details of the new membership structure.
NOTE: The contents of this article were sent to CBA membership this month in a special letter signed by CBA Chairman, Curtis Wright, and Executive Director, Celia DuBose.
Biodiesel Tax Incentive Retroactively Reinstated for 2014
On Friday, December 19th, President Obama signed the tax bill that includes the biodiesel tax incentive. While our industry had hoped for a two-year extension, we are grateful that the tax extenders bill made it through the House and Senate in the nick of time with this retroactive reinstatement of the the biodiesel tax incentive for 2014.
CBA sent a team to participate in the NBB's DC Fly In on December 4th. Executive Director Celia DuBose and Jennifer Case, President of New Leaf Biofuel, held meetings with staff for California Senators Boxer and Feinstein as well as with Boxer staff for the Senate Committee on Environment and Public Works, which is in charge of the EPA's RFS program. In addition, Anne Steckel, NBB's Vice President of Federal Affairs, joined Celia in meetings with staff for Washington state senators, Maria Cantwell and Patty Murray that brought greetings from CBA members with operations there. Nancy E. Foster, President and CEO of the National Renderers Association, joined several meetings in order to express her industry's support for the biodiesel tax incentive.
CBA pointed out in the meetings that our state's biodiesel production capacity is equivalent to taking about 140,000 vehicles off the road and over 610 metric tons of carbon out of the air and that we do this by creating good family supporting jobs -- many of them in disadvantaged communities -- and contributing about $300 million to the state's economy. Still, because of the lack of stable government policies, we have seen four producer companies go out business in the last few months.
CBA will continue to work with the national industry on efforts to move beyond these temporary extensions.
ALTERNATIVE DIESEL FUEL RULEMAKING
Our industry continued its rigorous engagement with ARB this month on the technical issues involved in the ADF rulemaking, including arguing in favor of biodiesel's health benefits as a reason for increased opportunities for fleet exemptions and requesting that the provision sunset sooner as NOx neutral New technology Diesel Engines (NTDEs) come online per the state's compliance schedule.
Stating our industry's key and often repeated argument, the National Biodiesel Board's December 5th comment letter began with this: "While recent drafts of the regulation represent considerable -- and sincerely appreciated -- improvement over previous regulatory concepts, we remain convinced that the significance level should be set at B20. This view is based on air shed modeling studies that used data from the South Coast Air Quality Management District (SCAQMD). As discussed previously, the totality of data related to biodiesel emissions -- namely major reductions in particulate matter (PM) and volatile organic compounds (VOCs) -- results in a self-mitigating effect, at least up to a 20% threshold."
The ARB Board Hearing Notice & Staff Report is scheduled to be released on January 2, 2015 and the Board Hearing will be held in mid February.
Related documents are posted here: http://arb.ca.gov/fuels/diesel/altdiesel/biodiesel.htm.
CALIFORNIA AIR RESOURCES BOARD: LOW CARBON FUEL STANDARD (LCFS)
CBA supports the comments of the National Biodiesel Board (NBB). NBB has submitted letters on technical issues, including indirect land use change (ILUC). See all comments posted by workshop date on CARB's 2014 LCFS Re-Adoption Letters webpage at:
LCFS READOPTION: Compliance Curves and Cost Containment
CBA submitted comments on ARB's October 27th, CARB workshop supporting the LCFS' original mandate of a 10 percent reduction in the carbon intensity of fuels by 2020; the use of a straight-line approach to that path from 2016 to 2020; and for continued reductions beyond that date. The comments included support for ARB staff's preferred cost containment mechanism, the Credit Clearance option, to avoid the possibility of a "low-probability but high-impact price spike." They also supported the proposed $200 as the price that triggers the mechanism and the 3% interest rate on carryover debt, adding the suggestion that the interest rate be tied to a financial index that factors in inflation. To assure the integrity of the LCFS program, CBA requested the adoption of rules with penalties to address fraudulent credit trades and other invalid activities and supported a mechanism to place liability on producers while protecting good faith purchasers. Also, in support of improvements to provide critical certainty to investors, CBA called for a clear and predictable schedule for the review and updating of pathways and CI scores.
In December, NBB's expert team submitted comments in response to the third ILUC workshop in November. They commended ARB for adopting previously requested changes, repeated some outstanding suggestions, and laid the groundwork for future improvements. Our industry will engage with ARB regarding their potential consideration of the indirect effects of animal fats and UCO after the LCFS re-adoption early next year. CBA supports the comments of the National Biodiesel Board (NBB) on the technical issues related to ARB's updating of the carbon intensities for biofuels.
LCFS Meetings, Activities, and Workshops information and presentations are posted here:
CALIFORNIA ENERGY COMMISSION (CEC): AB 118 FUNDING
In a Revised Round 2 Notice of Proposed Awards issued on December 16th, Viridis Fuels joined Crimson Renewable Energy and Community Fuels as an awardee of California Energy Commission (CEC) funding. The PON-13-609 for the 2014 Pilot-Scale and Commercial-Scale Advanced Biofuels Production Facilities grants under the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) announced that Virdis was chosen to receive $3,393,598 to build a biodiesel plant in Oakland.
On November 12th, Joe Gershen, CBA's representative on the CEC Advisory Committee, detailed the need for additional funding for biodiesel at the public workshop on the 2015-2016 Investment Plan Update for the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP). Gershen's continued call for the use of metrics in CEC funding decision making is increasingly echoed by other with Advisory Committee and met with positive responses from CEC staff.
Our industry was happy to hear Program Manager Jim McKinney say, "We are incredibly pleased with the way biodiesel producers are making their projects work. We are getting fantastic results. Twelve biodiesel projects have received a total of $36.1 million in ARFVTP support so far, and these have led to an additional 78.8 million gal per year of biodiesel production."
Meeting presentations and the link to the Docket Log are available here:
CALIFORNIA LEGISLATIVE ISSUES
AB 1566, a bill making it harder for grease thieves to continue taking their very costly toll on our industry, was signed by Governor Brown.
AB 2756, which included language that would have provided for a diesel tax refund to a supplier for that portion of biodiesel fuel removed from the terminal rack as a dyed biodiesel fuel, was vetoed by the Governor on 09/29/2014. His veto message did not mention anything related to this part of the bill. CBA will pursue this issue in the next legislative session.
STATE WATER RESOURCES CONTROL BOARD: UST REGULATIONS
This fall several bills became law that increase UST maintenance fees effective January 1, 2015. For details:
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 updated monitoring and response plans and engineering approvals for non-integral secondary containment (sumps and UDCs).
The following is excerpted from an 10.27.14 email notice from the Water Board:
The deadline for removal of all singled-walled USTs is December 31, 2025. Loans and grants are available through the RUST program to assist eligible small businesses to remove single-walled USTs and to replace them with double-walled USTs. If you are eligible for RUST funding, you cannot begin work until you have a grant or loan executed by the State Water Board. Upon UST removal, if a release has occurred, owners/operators may need to undertake corrective action (i.e., investigate and clean up the release). Filing a claim application with the UST Cleanup Fund, completing corrective action, and receiving reimbursement for eligible corrective action costs is a lengthy process. The deadline for submittal of a claim application to the UST Cleanup Fund for reimbursement of eligible costs for corrective action is December 31, 2024. The UST Cleanup Fund sunsets on January 1, 2026. Do not delay.
OWNERS/OPERATORS OF SINGLE-WALLED USTS
Information on eligibility requirements for RUST grants and loans can be found at:
Information on eligibility requirements for reimbursement for corrective action by the UST Cleanup Fund can be found at:
Below are updates on some key federal policy issues. Please contact the Washington office of the National Biodiesel Board (NBB) at 202-737-8801 for further details.
BIODIESEL TAX INCENTIVE ISSUES
See article above.
RENEWABLE FUEL STANDARD (RFS)
The EPA issued a notice regarding the Renewable Fuel Standard (RFS) program's RVO in the Federal Register announcing that it will not be finalizing the 2014 applicable percentage standards before end of 2014. Read the details here: