CALIFORNIA'S BIODIESEL INDUSTRY TRADE ASSOCIATION

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FOR THE 4TH ANNUAL




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February 4th 2015

Capitol Plaza Ballroom

Sacramento

Understanding the Unique Benefits and
Regulatory Landscape of Biodiesel
-- California's Advanced Biofuel


Discount for CBA Members - Join Us!

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 page.

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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Bill to Stop Grease Theft
Signed by Governor



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 and was signed into law by Governor Brown in September. 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.

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
At ARB's ADF meeting on November 21st in Sacramento, staff presented draft language for the proposed regulation and promised to post new draft language in one week (Nov 28th) reflecting some of the input from our industry during the meeting. Our industry will provide input on a range of key issues by the December 5th deadline.

Related documents are posted here: http://arb.ca.gov/fuels/diesel/altdiesel/biodiesel.htm.


CALIFORNIA AIR RESOURCES BOARD: LOW CARBON FUEL STANDARD (LCFS)
LCFS RE-ADOPTION: 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: http://www.arb.ca.gov/fuels/lcfs/regamend14/2014lcfsletters.htm.

LCFS READOPTION: Compliance Curves and Cost Containment

This month, 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.

LCFS Meetings, Activities, and Workshops information and presentations are posted here: http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm.


CALIFORNIA ENERGY COMMISSION (CEC): AB 118 FUNDING
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: http://www.energy.ca.gov/2014-ALT-01/documents/.


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
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:

***IMPORTANT NOTICE***

OWNERS/OPERATORS OF SINGLE-WALLED USTS

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:
http://www.waterboards.ca.gov/water_issues/programs/ustcf/rust.shtml. Information on eligibility requirements for reimbursement for corrective action by the UST Cleanup Fund can be found at:
http://www.waterboards.ca.gov/water_issues/programs/ustcf/.


FEDERAL ISSUES
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
Senate Majority Leader Harry Reid's vehement pledge to bring the tax extenders package, which includes the biodiesel tax credit, up for a vote this year was widely reported in the industry press. Senate Finance Committee Chairman Ron Wyden (D-Ore.) and ranking member Orrin Hatch (R-Utah) also support tax extenders, something that came up at that committee's recent hearing called "Reforming America's Outdated Energy Tax Code. NBB provided comments to the committee calling for the immediate reinstatement of the biodiesel tax incentive; for it to be revised as a production incentive instead of a blenders incentive; and for incentives that support stability and the long-term growth of renewable fuels.

RENEWABLE FUEL STANDARD (RFS)
Continuing our industry's relentless pursuit of higher biodiesel volumes under the RFS, the NBB met with the White House Office of Management and Budget (OMB) and other Administration officials in September. More than a dozen NBB members -- along with several economists and other experts -- sharing the best stories, data, and arguments supporting our case that the proposed volume of 1.28 billion gallons would constitute a severe cut and strike a devastating blow to our industry. According to the NBB, Chairman Steven J. Levy said,"We showed the true strength and diversity of U.S. biodiesel and made clear to the Administration that this is pivotal for our industry and for our shared national goals of boosting U.S. energy security, creating jobs and reducing harmful emissions with clean, alternative fuels.


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%.