CALIFORNIA'S BIODIESEL INDUSTRY TRADE ASSOCIATION

SAVE THE DATE!

CBA'S SIXTH ANNUAL CA BIODIESEL CONFERENCE


February 22, 2017, Capitol Ballroom, Sacramento



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of Meetings CBA Covers on Our
Regulatory Matters Page



State Biodiesel Fuel Businesses 
Must Register under Motor Vehicle Fuel Distributor Program (MVDP) 
 
Cal/EPa Building
ARB Headquarters in Sacramento

During ARB's Alternative Diesel Fuel Regulation (ADF) workshop on May 23rd, CBA learned of a requirement that affects our industry by requiring registration for many biodiesel fuel businesses under the Air Resources Board's (ARB) Motor Vehicle Fuel Distributor program (MVDP). 
 
The regulation defines a "motor vehicle fuels distributor" as: "any person who (1) refines, blends, or otherwise produces motor vehicle fuel, or (2) with an ownership interest in the fuel, transports or causes the transport of motor vehicle fuel at any point between a production or import facility and a retail outlet, or sells, offers for sale, or supplies motor vehicle fuel to motor vehicle fuel retailers." This requirement includes providing the physical location of all records pertaining to the production, purchase and delivery of motor vehicle fuel. 

The registration form is available at http://www.arb.ca.gov/enf/edforms/distcertform.pdf

ARB staff has clarified that biofuel producers should register as a refiner and a distributor under the program.

To expedite the process, ARB is requesting that the registration form be emailed to Amanda Ciccarelli (lciccare@arb.ca.gov). They also are asking that the registration form sent to the following address rather than the P.O. box address printed at the bottom of the form:
 
California Air Resources Board
Attn: Amanda Ciccarelli
8340 Ferguson Ave
Sacramento, CA 95828

Please contact Amanda Ciccarelli with any questions at (916) 229-0523.



California's Biodiesel Industry

 
California currently has 8 biodiesel production plants, with 2 plants under construction, and major expansion underway at several of the state's largest plants. In 2015, instate production reached 32 million gallons, and we hope to see significantly increased volumes in 2016.


AB 1032 Goes Into Effect Jan 1st 2016
Tax Refunds Now Available for Dyed Blended Biodiesel

 
CBA was the proud sponsor of AB 1032, which passed the state legislature and was signed into law by Governor Brown this year and will be Implemented January 1st 2016. This very important new law corrects a long-standing tax problem affecting our industry, and we look forward to increased biodiesel sales now that this obstacle has been removed.

"Our industry estimates that the problem has been effectively preventing biodiesel from being blended into 15-30% of the diesel volume depending on how much dyed diesel that terminal is handling," said Harry Simpson, President of Crimson Renewable Energy and CBA board member. "The problem has affected every terminal and refinery rack in the state that is blending, or contemplating blending, biodiesel," he added.

Below is the text of a Special Notice, dated November 2015, from the California State Board of Equalization:

"Refund of Diesel Fuel Tax Paid Available to Suppliers of Dyed Blended Biodiesel Removed from the Rack"

"Effective January 1, 2016, licensed diesel fuel suppliers may claim a refund or credit for the excise tax they paid on the biodiesel portion of dyed blended biodiesel fuel removed from a terminal rack by the same supplier. Suppliers must be able to show that they paid the excise tax on the biodiesel fuel portion of the blended biodiesel. For more information on the legislation creating the change to allow a refund of the diesel fuel tax, download Assembly Bill 1032 (Stats. 2015, Ch. 481) at www.leginfo.ca.gov/bilinfo.html.

What Changed?

Current Diesel Fuel Tax Law does not provide for reimbursement of the excise tax-paid portion of the biodiesel fuel removed from the rack as dyed blended biodiesel. Therefore, suppliers who blend tax-paid biodiesel fuel with ex-tax diesel fuel that is removed as a dyed blended biodiesel, are unable to recover the excise tax from the customer and unable to seek reimbursement for the tax from the Board of Equalization.

Effective January 1, 2016, Revenue and Taxation Code section 60501(b) will allow a supplier to claim a refund or credit for the excise tax that was paid on the biodiesel portion of dyed blended biodiesel fuel. Suppliers may file a claim for refund using BOE-101, Claim for Refund or Credit.

How to Claim a Credit on Your Supplier Return

Instead of filing a refund claim, licensed diesel fuel suppliers may claim a credit on BOE-501-DD, Supplier of Diesel Fuel Tax Return, for tax-paid biodiesel blended with diesel fuel and removed as dyed blended biodiesel fuel. Suppliers may claim a credit only to the extent of the excise tax-paid biodiesel portion of the dyed blended biodiesel removed. For further information, see BOE-810-FTE, Instructions for Preparing Motor Fuels Schedules, or our Diesel Fuel Tax program webpage FAQs.

If you have any questions regarding dyed biodiesel fuel blends, you may contact the BOE through our website at www.boe.ca.gov/info/email.html. You can also call our Customer Service Center at 1-800-400-7115 (TTY:711). Customer service representatives are available to assist you weekdays from 8:00 a.m. to 5:00 p.m., (Pacific time), except state holidays."










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CBA Restructures Membership
Launches Vendor/Service Provider Partner Sponsor Program


Members Only Newsletter and Webpage Coming Soon

 
At CBA's Board of Directors retreat in May, the directors discussed the need to restructure CBA membership to differentiate between direct biodiesel industry participants and those who fall into other categories such as vendor/service providers, non-profits, and educational institutions.

Based on those discussions, changes have been made to the membership structure that better align with these differentiations. Key changes include the implementation of corporate membership dues that reflect the level of participation in the California market and the establishment of a Vendor/Service Provider Partner Sponsor program that offers a range of sponsorship opportunities for companies who wish to showcase their support for this booming industry while benefitting from the combined buying power of our industry's members.

The revamped structure, rates, and benefits become effective July 1, 2016 for new members and sponsors and January 1, 2017 for current members. Beginning with the July 2016 issue, the complete CBA newsletter and key website content will be available to members and sponsors only.

CBA's Board of Directors will continue to be Corporate members with additional voting privileges and the ability to participate in establishing CBA's agenda and positions on various issues impacting the California biodiesel industry. Annual dues for the new category of Direct Industry Corporate Members will be tied to annual volumes of biodiesel or feedstock (in gallons) sold within California. Direct Industry Corporate Members may apply to join the Board of Directors (application available on our Join Us page).

CBA is excited to reach out to a broad community of industry participants about our new Vendor/Service Provider Partner Sponsor program. Beginning July 1, 2016, this program will offer three levels of sponsorship to biodiesel industry service providers and vendors, including parts and equipment manufacturers and distributors, trucking companies, chemicals and additives suppliers, and accounting, legal, RFS auditing, and other service providers.

New Vendor/Service Provider Partner Sponsors will have the option to either pay a prorated rate for promotional benefits beginning September 1st through December of 2016 or sign up for 2017 sponsorship and receive complimentary promotional benefits for September through December 2016. This new program replaces the option of CBA membership for this category of industry participants.

Revisions have been made for Non-Profit Organizations, Educational Institutions, and Individuals levels as well. See our Join Us page for details.

State Biofuels Funding Remains in a Positive Position
Despite Not Being Included in June Budget


 
The state budget that passed on June 15th did not include any funding for an in-state biofuels production incentive because no Green House Gas Reduction Fund (GGRF) moneys were included. The GGRF is the program through which Cap and Trade auction proceeds are allocated. It will be the source of funding for in-state biofuels as requested by the California Biofuels Cap & Trade Initiative, the coalition effort, which was started by CBA and is led by CBA's lobbyist Louie Brown.

The GGRF item is being moved to August. Because it is linked to SB 32, which was recently amended to give the California Air Resources Board (ARB) blanket authority to reduce 1990 GHG levels by 40% by 2030, it remains open to discussion between leadership in the legislature and the Governor's office.

"Funding for biofuels is in a positive position because this line item is not controversial," said CBA lobbyist, Louie Brown. Our line item is in all three plans -- the Governor's plan at $65 million, the Senate's at $60 million, and the Assembly's at $65 million," he added.

As background, legislative leadership and the Governor are divided on how to proceed with the Cap and Trade Revenues. Legislative leadership would like to repurpose some of the sixty percent of GGRF moneys dedicated to continuously appropriated projects and to consider a two-year spending plan for other projects. These discussions are expected to occur throughout the summer recess.

The legislature officially adjourns on August 30th for the year. CBA continues its efforts in Sacramento in support of its immediate goals of securing maximum funding for biofuels as part of the passage of GGRF funding this year.

CBA and NBB Submit Joint Comments on LCFS V and M Plan
Call for Exact Mirroring of EPA's RFS QAP


 
On June 2nd, California Air Resources Board (ARB) staff presented its draft LCFS verification and enforcement regulation at a public workshop in Sacramento. CBA worked with the the National Biodiesel Board (NBB) to submit joint comments. Our industry argued for a program "identical to the QAP program in terms of structure, but perhaps with several added measures that staff believe would prove beneficial. This type of "QAP+LCFS" compliance approach would dramatically reduce costs for the industry and California fuel consumers."

The comments called for a simpler approach that could be handled by an existing Quality Assurance Plan service and pointed out that QAP providers can provide LCFS verification services without triggering conflict of interest concerns.

A number of concerns were raised regarding foreign entities. Arguing that ARB should reconsider its decision not to include a bonding provision, which our industry believes is the most effective option, the letter suggested an alternative approach -- to require that third-party verifiers of foreign entities maintain a level of liability insurance higher than the $4 million, which had been suggested during the workshop.

Based on concerns about fraudulent feedstock reporting, the comments strongly supported unannounced field audits and the physical verification of feedstocks for high risk contributors.

The comments also pointed out that the regulatory and financial burdens associated with this regulation with be simultaneous with those of the Alternative Diesel Fuel (ADF) regulation, which will be fully implemented on January 1, 2018, and stated a preference that the LCFS V and M regulation begin January 1, 2019 or later.

Public comment letters are posted here: http://www.arb.ca.gov/fuels/lcfs/workshops/feedback.htm#06022016.

The next workshop is tentatively scheduled for July 14th. please check the ARB's LCFS meetings page to confirm: http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/lcfs_meetings.htm#06022016.

CALIFORNIA AIR RESOURCES BOARD (ARB)
ALTERNATIVE DIESEL FUEL REGULATION (ADF)


 
The ADF regulation, which became effective January 1, 2016, includes reporting and recordkeeping requirements applicable to entities in the biodiesel industry. Biodiesel producers, importers and blenders must submit their first quarter reports by June 30, 2016.

Biodiesel producers, importers and blenders are required to report and keep records concerning biodiesel production, sales, and blending. Biodiesel distributors and retailers are only required to keep records.

Find the new FAQ and Reporting Forms at: http://www.arb.ca.gov/fuels/adf/adfdocs.htm.

The presentation for the May 23rd meeting, which has helpful diagrams, is here: http://www.arb.ca.gov/fuels/diesel/altdiesel/meetings/meetings.htm.

Note: Most in-state biodiesel fuel businesses are required to register under the Air Resources Board's Motor Vehicle Fuel Distributor program (MVDP). See article on the left.

CALIFORNIA AIR RESOURCES BOARD (ARB)
LOW CARBON FUEL STANDARD (LCFS)


 
Readoption:

ARB staff is on target to certify all biodiesel and renewable diesel (BD/RD) pathways before June 30th, having released the new having carbon intensity (CI) scores to applicants with seven days to approve. The new scores may be used for credit reporting purposes starting with 2016 second quarter reports.

Monitoring and Verification Rulemaking:

See article above.

CALIFORNIA LEGISLATION

 
SB 1402 (Pavley): SB 1402, which would have outlined the process for spending in-state biofuels incentive funding, was held by the Senate Appropriations Committee last month. The Biofuels Initiative Coalition has been working with ARB to get the concepts of SB 1402 incorporated into the guidelines it is developing for the allocation of the GGRF funds.

AB 2323 (Ridley-Thomas): AB 2323 would have required investor-owned electric utilities to provide a discount rate program to the state's producers of biofuels, hydrogen, and natural gas similar to that offered for electric vehicles. The bill was held by the Assembly Appropriations Committee.

AB 1103 (Dodd): CBA is satisfied that recent amendments have removed the problematic issues in this bill. We had been concerned about previous language that would have prohibited anyone but waste haulers "duly authorized" by the local jurisdiction from collecting, removing or transporting solid waste.

SB 20 ( Pavley): The senator has amended SB 20 to establish a Low Carbon Fuels Council. The five-member council would be the coordinating body for state agencies' work related to the acceleration and development of the instate production of low carbon fuels.

SB 32 ( Pavley): See article above on state biofuels funding.



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%.