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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.
Bill to Stop Grease Theft
Assemblymember Chris Holden's bill AB 1566, a measure to increase penalties for grease theft and give law enforcement new tools in this effort, passed the state legislature with overwhelming support this month. The bill is expected to be signed by Governor Brown. California's rendering industry, which has championed this cause, is pleased and would like to thank Assemblyman Holden for a well-written bill and for his and his staff's support.
Passes with Overwhelming Support
This legislation comes not a moment too soon for our industry, which suffers millions of dollars a year in losses due to stolen grease. In January, at CBA's 2014 Biodiesel and Renewable Diesel conference, a panel on grease theft began with two videos of grease thieves caught in the act by Imperial Western Products. David Isen, the company's Asset Protection Manager, said in his presentation that in a high market, losses from theft are as high as up to 40 to 50 percent.
"Restaurants are finding that their used kitchen grease is a hot commodity that has sparked grease wars in a battle over who can cash in on the 'liquid gold' that is then converted into biodiesel fuel," explained Assemblymember Holden in a press release on May 23rd of this year. "This bill closes a loophole in enforcement code that will make it easier to stop the bad players."
Here's what the bill will do, according to an analysis posted on the California legislative information website: "Specifically, to incentivize program compliance, fines are increased for IKG transporters for IKGP violations, law enforcement will be allowed to impound a transporting vehicle involved in IKG theft to ensure the vehicle is safely taken off the streets and the IKG is appropriately transported by a licensed transporter, and licensed transporters and renderers will be required to provide specific identification on their transport vehicles and maintain detailed records in order for law enforcement to better identify illegal IKG transporters."
ALTERNATIVE DIESEL FUEL RULEMAKING
According to CARB's website, California's "diesel fuel regulations are geared toward controlling criteria pollutant emissions from hydrocarbon-based fuels and are not intended to provide a market pathway for alternative diesel fuels (ADF), such as biodiesel. With the advent of the policies that incent or require ADFs, such as the federal Renewable Fuel Standard and the California Low Carbon Fuel Standard, there is a clear need to provide a pathway for emerging ADFs to enter the California market." Biodiesel will be the first ADF under the new regulation.
As part of its ongoing work to establish the ADF regulation, CARB staff presented their most recent biodiesel testing data for NOx emissions on B5 and B10 in a July 1st webinar. Staff presented data they believe demonstrates a 1% NOx increase for B5 biodiesel blends. Calling their own conclusions "preliminary," they called for participants to do their own analysis. Our industry is skeptical about the results presented due to some inconsistencies and anomalies. We are involved in high-level discussions with CARB staff and have requested further details -- including specifications of the fuels used, engine performance to the protocols, and the determination of statistical significance -- as part of an extremely concerted effort to insure a full review and analysis of the data.
Per the NBB's request, the workshop date of July 31st has been delayed to provide more time for expert analysis by statisticians at the National Renewable Energy Laboratory.
Details of the next public meeting on this issue will be posted here: http://arb.ca.gov/fuels/diesel/altdiesel/biodiesel.htm.
CALIFORNIA AIR RESOURCES BOARD: LOW CARBON FUEL STANDARD (LCFS)
With CBA board members, Eric Bowen and Russ Teall, serving on the 2014 LCFS Advisory Panel and NBB staff involved at various levels, our industry continues its active engagement on the range of important issues affecting biodiesel in the LCFS re-adoption process. The next and final Advisory Panel meeting is scheduled for October 27th. A list of other meetings with related documents can be found here: http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm.
In an August 22nd workshop on CARB's proposed CA-GREET 2.0 update for fuel pathways lifecycle evaluation, agency staff presented preliminary findings showing expected increases in carbon intensity (CI) scores for many LCFS fuel pathways including natural gas, sugar cane ethanol and biodiesel. The CI for petroleum diesel is also increasing, which adds to the CI of all fuels. However, CBA is concerned about CARB's proposed CI increases for biodiesel made from soybean oil, tallow, used cooking oil (UCO), canola, and corn oil ("wet DGS-associated").
At the workshop it was learned that CARB proposes that companies seeking CI scores for biodiesel where no cooking has taken place will be required to document that fact. Agency staff also said that because there are commercial markets for UCO and tallow, they will no longer be considered waste products, adding that the analysis involved in determining what displaces these feedstocks in the market when they go into fuel production is complicated and may not be completed in time for LCFS readoption.
Our industry is working to get additional information from CARB to complete our own analysis and will submit comments.
CALIFORNIA ENERGY COMMISSION (CEC): AB 118 FUNDING
Crimson Renewable Energy, LP and Community Fuels have been chosen to receive funding from CEC's Alternative and Renewable Fuel and Vehicle Technology Program under AB 118. In May, the CEC released a Notice of Proposed Award (NOPA) announcing its Round 1 Award for their Pilot-Scale and Commercial-Scale Advanced Biofuels Production Facilities program (Solicitation PON-13-609). Crimson Renewable was selected to receive $5 million for plant expansion at its Bakersfield biodiesel production facility.
On July 18th, the agency announced its Round 2 Awards. American Biodiesel, Inc. (dba Community Fuels) was chosen to receive $4,183,421 to increase efficiency for processing low carbon intensity biodiesel feedstocks at its biodiesel production facility in Stockton.
For more information on this NOPA
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).
CALIFORNIA LEGISLATIVE ISSUES
Two bills of importance to our industry have passed in the state legislature and are now on Governor Brown's desk: AB 1566, which would strengthen penalties for stealing used cooking oil and add other requirements affecting grease haulers; and AB 2756 to provide for a diesel tax refund to a supplier for that portion of biodiesel fuel removed from the terminal rack as a dyed biodiesel fuel.