Bay Area Plans to Refine Biofuels Could Derail Climate Goals, Warn Environmentalists

by Aaron Cantú (Capital and Main) Oil companies may end up relying on environmentally questionable crop-based fuels. --The California Air Resources Board is considering limits on crop-based diesel fuel as part of an overhaul to reduce California’s emissions by 2030.

Gov. Gavin Newsom’s call for regulators to “accelerate refinery transitions away from petroleum to the production of clean fuels” was part of a larger effort to reduce climate pollution from California’s transportation sector, the largest source of emissions in the state.

Since 2020, two oil companies in Contra Costa County have assembled plans to convert their petroleum refineries to processing biomass instead. But residents and environmental groups are raising concerns that the plans could actually increase emissions and exacerbate the climate crisis, the opposite of what the state is setting out to do.

Phillips 66’s Rodeo Renewed refinery and Marathon’s facility in Martinez plan to produce renewable diesel from waste-based “feedstocks” such as tallow and grease, as well as fresher oils extracted from soybeans, corn and canola. Phillips 66 also has plans to make jet fuel from animal fats and vegetable oils.

In public statements, the industry and regulators have emphasized that the refineries would mostly use waste oils.

In a letter submitted to the state regarding California’s roadmap to zeroing out emissions by 2045, a 13-year former CARB regulator who oversaw the low carbon fuels program implored his former colleagues to “restrict and ultimately phase out the use of crop-based biofuels in California.”

“The use of crops such as corn and soy as feedstock to produce liquid biofuels is not a sustainable means of reducing [greenhouse gas] emissions and may actually increase emissions as compared to fossil fuels,” wrote James Duffy. “Promoting the use of these fuels is not in line with California’s role as a global leader in environmental policy.”

Those concerns are shared by Jeremy Martin, the director of fuels policy and senior scientist at the Union of Concerned Scientists. He and others authored a report, for the International Council on Clean Transportation, that predicts domestic biofuel demand will upend commodity supply chains, particularly U.S. exports of soybeans to China.

In a letter to regulators, Marathon said that “capping crop-based feed stocks sends the wrong signal and will slow innovation in the agricultural sector.”

Chevron, while not overtly opposing a cap, wrote to regulators that current rules for analyzing the “carbon intensity” of crop fuels were sufficient.

Another company, World Energy, which is expanding its facility in southeast Los Angeles to scale up production of biomass jet fuel, downplayed concerns in a letter to regulators, questioning “cause and effect” relationships between biofuels and global emissions and food markets.

In appeals filed with Contra Costa County opposing the Bay Area biofuels refineries, community and environmental groups alleged that the county hadn’t adequately addressed potential climate harms from processing crop oils. They also noted a potential increase in local pollution because of processing changes requiring the refineries to periodically release gases to avoid pressure build up.

The county’s analysis, meanwhile, found that emissions and pollution would be lower than if the refineries were still processing petroleum.

CARB bolstered the order by approving the Advanced Clean Cars II rule in August.

At a hearing before county supervisors on May 3, Corey (Richard Corey, then CARB’s executive director) described the refineries as part of a necessary interim stage before California can reach fuller electrification of vehicles.

“We’re going to be needing liquid fuels in some of these applications for quite some time,” he said. “The question is, for the legacy fleet, as well as those sectors that are particularly challenging to electrify, we still need to reduce [greenhouse gas] emissions.”

Corey also assured county supervisors that the state’s LCFS program does not incentivize palm oil — a particularly destructive feedstock — and that most renewable diesel is made from used cooking oil, tallow, corn oil and “relatively small” amounts of soybean and fish oil.

A Phillips 66 spokesperson told Capital & Main that the Rodeo refinery will rely on “waste oils, fats, greases and vegetable oils.” But CARB records show that the company has applied for LCFS credits thus far based only on making diesel from soy, canola and corn oils.

Before voting to allow the refineries to go forward, the Contra Costa County supervisors voted to prohibit palm oil feedstocks, encourage refinery owners to use landfill waste as feedstocks when possible, and cap overall fuel production at the refineries.

Within a month, groups filed lawsuits against Phillips 66, Marathon and the county over the approvals. Both projects are active; Phillips 66 appears to have already started processing biofuels at its refinery. A Marathon representative said the Martinez refinery will be fully operational by the end of 2023. READ MORE