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Krause & Nagy Environmental Solutions, LLP




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February 4, 2015, Capitol Plaza Ballroom, Sacramento

California's Biodiesel Industry

California currently has 7 biodiesel production plants, with 3 plants under construction, and major expansion underway at several of the state's largest plants. In 2014, instate production reached 25.96 million gallons, and we hope to see significantly increased volumes in 2015.

Biofuels Initiative Launched
to Secure Funding from Cap & Trade Proceeds

The California Biofuel Initiative, a proposal to allocate $210 million from Cap and Trade auction proceeds to low carbon biofuels, has built an impressive list of supporters since it was launched a few months ago. The supporting coalition, which includes biofuels producers, industry associations, and other stakeholders, has come together to make the case that low carbon fuels are available now and must be aggressively scaled up if Governor Brown's goal of reducing petroleum use in the state by 50 percent by 2030 is to be met.

An important element of the proposal includes not just concern about reaching the climate change goals of AB 32, but also that biofuel production and infrastructure should be encouraged in disadvantaged communities as put forth in SB 535. That law calls for stimulating employment and economic improvement in those communities as defined by CalEnviroScreen.

The funds would be split equally among three biofuel types (diesel alternatives, gasoline alternatives, and biogas/syngas) based upon stimulating (1) California-based biofuel production; (2) the low carbon intensity of biofuels, and (3) the benefits to disadvantaged California communities. Each category would tailor spending on production and infrastructure based on the needs of their biofuel type.

CBA has hired Sacramento lobbyist and biodiesel specialist, Louie Brown of Kahn, Soares, and Conway, LLP, who is leading weekly meetings with the Biofuels Coalition partners to develop the legislative strategy required to secure funding through the Cap and Trade program.

View the proposal and the current list of supporters here. An informational video is also being put together to show the breadth and depth of California's biofuel and renewable transportation industry. Any signatories are welcome to submit video clips for inclusion. The draft "CA Biofuels Montage" can be seen at

For further details and to add your organization's name as a signatory to the Biofuels Initiative, call Russ Teall at 805-689-9008 or email him at

CBA Takes It to the Next Level:

Restructures Membership Dues To Raise Funds for State Legislative Strategy

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.

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.

Supreme Court Denies Appeal of California's Landmark Low Carbon Fuel Standard

Lower Court Decision Upholding Groundbreaking Clean Fuel Protections Will Stand

By Environmental Defense Fund | June 30, 2014

(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.

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CBA Ramps Up Legislative Activity
Heads to Sacramento for Lobby Day in May

Fulfilling its promise to pursue an aggressive new legislative agenda supported by an increase in member dues, CBA is involved in an unprecedented level of activity in the 2015 California legislative session. CBA's lobbyist Louie Brown, of Kahn Soares, and Conway, is leading our industry's efforts, which include letters of support, engagement with committee chairs and staff, public testimony, and a lobby day event to be held in May.

CBA is supporting Senator Fran Pavley's bill SB 706, which would authorize the use of moneys from the greenhouse gas reduction fund to encourage in-state production of low carbon alternative fuels. the bill supports the work of a major effort initiated by cba, the biofuel initiative, which is seeking funding from Cap and Trade auction proceeds for biofuel production and infrastructure. the initiative is being led by a steering committee that includes representatives of the renewable alternatives for diesel, gasoline, and natural gas and continues to meet weekly and conduct legislative, administrative, and executive meetings.

CBAis also engaged on behalf of:

AB 1032: Diesel Fuel Tax Law: reimbursements: To solve a problem for our industry that may be effectively preventing biodiesel from being blended into 15-30% of the diesel volume, this bill would allow a claim for refund for amounts of tax paid on the biodiesel fuel portion of dyed blended biodiesel fuel removed from an approved terminal at the terminal rack, as provided, to the extent a supplier can show that the tax on that biodiesel fuel has been paid by the same supplier.

AB 692: Low-carbon transportation fuels: This bill would require the Department of Transportation, the Department of General Services, and other state agency to buy an annually increasing percentage of their fuel from very low carbon transportation fuel sources. In California, where the majority of biodiesel is made from second-use feedstocks, including used cooking oil and animal fats, biodiesel has some of the lowest carbon intensity scores under LCFS and is recognized by state agencies as an important component of the success of the program. We agree with the author that the state needs to do even more to reach its GHG reduction goals and believe that this bill is a reasonable and necessary step and that it will further enhance California's leadership in the movement to address the dire realities of climate change.

AB 33: California Global Warming Solutions Act of 2006: Climate Change Advisory Council: CBA supports Assemblymember Quirk's effort to establish a Climate Change Advisory Council and the broad range of strategies that the bill includes toward the goal of fulfilling California's greenhouse gas (GHG) emissions goals, including those aimed at the energy grid; commercial and residential buildings; and the use of biodiesel and other biofuels to lower emissions from heavy-duty vehicles. Also, we value the bill's focus on increasing the market for low-carbon and very low-carbon fuels and improving the vehicle infrastructure required to do so.

We especially appreciate the inclusion of a metrics requirement that would accurately quantify ghg emissions reductions; the environmental, health, safety, and quality of life benefits to state workers and residents; and the cost-effectiveness of the strategies developed by the new council. cba has consistently supported the development and use of metrics to guide investment decisions as a member of the advisory committee of the california energy commission's ab 118 program.

SB 350: Clean Energy and Pollution Reduction Act of 2015: Our organization is happy to join with the low carbon fuels sector and other businesses in support of Senator De Leon's bill to create enforceable, state standards for clean energy and greenhouse gas reductions, including increasing the state's successful renewable portfolio standard from 33% by 2020 to 50% by 2030 and the 50% reduction in petroleum use in buildings by 2030 as well. CBA especially values the requirement to reduce today's petroleum use in cars and trucks by up to 50 percent. Our industry is already bringing biodiesel's many benefits to the state's goals, and we look forward to increasing opportunities to be part of these critically important solutions.

Biodiesel Industry Gets Last Word at ARB Board Hearing on
LCFS Readoption and ADF Regulation Adoption

On February 19th, the California Air Resources Board (ARB) held the first of two much-awaited board hearings on the readoption of the Low Carbon Fuel Standard (LCFS) and the adoption of the Alternative Diesel Fuel (ADF) regulation.

The biodiesel industry, represented by Shelby Neal, Director of State Governmental Affairs for the National Biodiesel Board (NBB), Celia DuBose, Executive Director of the California Biodiesel Aliiance (CBA), and the state's major producers gave testimony, along with environmental NGOs and members of the alternative low carbon fuels sector, in support of both.


LCFS readoption proponents sited the program's many successes in lowering carbon emissions, displacing petroleum, creating jobs, diversifying the fuel pool, and providing a model that is already being exported to other states and countries.

Board Chair Mary Nichols talked about how well the regulation has been working and said she was disappointed in the comments from oil industry representatives who seemed to be even more opposed to the program than in the past.

An article in the Sacramento Bee the next morning, which focused on the petroleum industry's perspective, gave the biodiesel industry the last word. It ended with the statements from Shelby Neal: "Ten years ago, you were buying biodiesel by the jar. Now the industry is creating 1.4 billion gallons a year of the low-carbon fuel. We're here today, and we're affordable."


During the afternoon session, about a dozen proponents, and no opponents, gave public comment on the value of biodiesel to the state and thanked the agency for their approach to the proposed ADF regulation. In urging adoption of the regulation, under which biodiesel would be the first fuel to be regulated, our industry expressed appreciation to ARB staff for working with us over the years to come up with a framework that allows biodiesel to move forward while upholding state law for regulating the one criteria pollutant of concern in higher blends. The proposed rule allows a blend of B10 to be sold year round if it has a cetane level of 56 or greater, but only up to B5 in the high ozone summer season if it has a cetane of 56 or less (cetane levels correspond to NOx emissions).

The proposed regulation provides exemptions for light and medium duty fleets and for those with 90% New Diesel Technology Engines (NTDE) up to B20. It has an expected sunset date of 2023, when the use of NTDEs is expected to reach 90% and a review process that will provide for data on actual vehicle miles traveled as fleets turnover to NTDEs. CBA looks forward to continued discussions with ARB staff about their stated interest in pursuing flexibility for higher blends, as expressed at the hearing, and to the adoption of the best possible final ADF regulation.

We appreciated ARB staff's recognition, and that of the NGOs and members of the low carbon fuels sector, of the importance of maximizing biodiesel's health benefits, especially its reductions in toxic diesel particulate matter. Our industry comments repeatedly emphasized our desire to continue to bring that and other of biodiesel's many benefits to California, especially to communities that are economically disadvantaged and suffer disproportionately from diesel emissions-related diseases by creating jobs in those areas where many of our plants are located.

At the end of the day, ARB board member Sandra Berg expressed her appreciation for the cooperative process between ARB and the biodiesel industry that resulted in no comments opposing the proposed regulation.

The ARB board will hold a second hearing this summer for a final vote on the two regulations. A 15-day rule will be issued before then, which will allow for public comment. The links for all related documents for both issues areas are in the Policy section below.

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.

The Lead Commissioner Report version of the 2015-2016 Investment Plan Update for the Alternative and Renewable Fuel and Vehicle Technology Program was adopted at an Energy Commission Business Meeting on April 8th. The new plan allocates $20 million for all biofuels production with no infrastructure investment funding offered. For more information:

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:

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.

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:

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 up to 86%.