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CALIFORNIA POLICY ISSUE UPDATES
EMISSIONS REGULATIONS
On October 4th, the California Air Resources Board (ARB) issued its Biodiesel Regulatory Guidance. The guidance document follows months of discussion between the ARB and biodiesel stakeholders regarding ARB's biodiesel/renewable diesel regulatory process. The document clarifies ARB's existing policy for blends above B5 and establishes guidance that ARB is unlikely to regulate blends up to B5 for the next five years while it continues testing and that ARB will continue to work on blends of B6 and above, which it expects to issue regulations for in late 2012.
CBA recognizes and appreciates this ARB action and will remain actively engaged with ARB as they continue testing and development of the biodiesel regulations. CBA is committed to safeguarding the use of all blends of biodiesel in California and will work to make sure that once new regulations come out in 2012, higher blends are able to make their full and much-needed contribution to California's carbon reduction goals.
CALIFORNIA ENERGY COMMISSION FUNDING
CEC staff has informed CBA that they expect to release a solicitation for $3.14 million for bulk terminal storage and blending facilities from the 2010-2011 funding cycle before year's end. They expect the same time frame for the release of a solicitation for biofuels production and feasibility. That solicitation will include $3.9 million from the 2010-2011 funding cycle along with $8 million from the 2011-2012 funding cycle, to total $11.9 million. The likely deadlines will be 45 days, so interested parties are advised to begin developing any proposal(s) before the solicitations are released based on the description detailed in CEC's 2010-11 Investment Plan.
LOW CARBON FUEL STANDARD (LCFS)
On Friday, December 16th, the California Air Resources Board (ARB) accepted the report of the LCFS Advisory Panel and agreed to amendments to the LCFS designed to strengthen the credit trading system and facilitate the creation of new pathways. In doing so, the ARB Board rejected attempts to water down and delay the LCFS.
The unanimous vote sent a clear message to investors and affected industries that California's LCFS is secure and that the state is on track to meet its carbon emissions reduction goals through this ground-breaking model program. Several unresolved issues include Indirect Land Use Change and the treatment of high carbon intensity crude oil (HCICO).
UST REGULATIONS
On Friday, November 18th, the State Water Resources Control Board issued a notice and rulemaking documents to amend the current underground storage tank regulations applying to the storage of biodiesel in double-walled tanks (containment and components). The proposed regulation would allow UST owner/operators to store biodiesel provided they can show both the UL listing for petroleum diesel (until such time as a UL listing for biodiesel replaces it) and written materials compatibility documentation for biodiesel from the equipment manufacturer for their UST equipment. It would begin in June of 2012 and replace the variance that has been in place for the last 3 years.
The Water Board cited the fact that the Underwriter's Laboratory (UL) testing and approval process can take years and that the delay in UL material compatibility testing and approval is reducing the use of alternative fuels, like biodiesel, that are necessary to lower GHG emissions and comply with AB 32's carbon reduction goals. The Initial Statement of Reasons states that the Water Board "wishes to provide an alternative to UL's material compatibility testing and approval to facilitate the use of alternative fuels in California and reduce GHG emissions, while also minimizing the risk of UST failures and, therefore, harm to water quality."
CBA will remain actively engaged with the Water Board throughout the process to ensure a smooth transition from the current variance process and will publish updates in this newsletter. All relevant rulemaking documents are located on this State Water Board webpage.
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 80%.