Is a Feedstock Crackdown Coming to California’s LCFS?
by Ron Kotrba (Biobased Diesel Daily) … But in the last rulemaking in 2018, CARB made a number of amendments to focus and strengthen the regulation, implementation and certainty of the carbon credit market, said Floyd Vergara, director of state governmental affairs for the National Biodiesel Board. Vergara spent three decades at CARB before joining NBB.
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One area on which changes focus is feedstock verification. “Before then, fuel pathways were approved by engineers and scientists looking at life cycle analyses and using their best engineering judgement to prove CI scores,” Vergara said.
Until recently, efforts to verify what was actually happening on the ground have been described by some as less than exhaustive. “Particularly on critical points that move the needle on carbon intensity,” Vergara said, “such as energy and mass balances, product mixing, and allocations of multiple feedstocks.”
The lower a fuel’s CI, the more value it can provide via the LCFS carbon-credit system. Simply put, high-CI fuels cost money while low-CI fuels generate it.
“The verification process looks at where the feedstock is grown or, in the case of animal fats and UCO, where it’s collected, and then follows it through the chain—who’s
collecting it, where it goes, how it’s processed, what are the inputs, and then blending into the final product,” Vergara said. “It looks complicated, but it’s really just being able to trace the origin to confirm the CI is what [the applicant] claims it is.
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Although the annual verification process is just that—yearly—Vergara said there is nothing stopping CARB from pursuing verification beyond once a year at any point, especially if it receives information or reports about a producer or feedstock supplier “doing something under the table.”
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The idea behind this is that a biofuel producer or feedstock supplier—wittingly or otherwise—can claim what they process or provide is, for instance, UCO when it in fact may be a little bit of UCO blended with a lot of other, higher-CI feedstock such as palm oil.
One way a UCO vendor can protect itself is by using a digital verification system. One such system is Reiter Software’s Cooking Oil Service Tier, or COST.
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“COST provides traceability through the supply chain, generating a figurative paper trail that tracks data points—GPS, date, time, volume changes—and stores it in a secure database,” (COST owner Kristof) Reiter said. “And it does all that while actually saving you two to four times more than what it costs you in fuel, labor, and vehicle wear and tear.”
In its new auditing efforts, CARB is “unlikely to test product onsite,” Vergara said. “Verification will mostly be a paperwork exercise—looking at electronic data and paper documents, and analysis of documentation. I don’t think CARB has the resources to sample product.”
He qualified this by saying there are procedures in the regulations to test for biogenic content in coprocessed renewable diesel.
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Violations can start with $1,000 fines and misdemeanor charges with up to a year in jail and, depending on intentionality, go as high as a-quarter million dollars and imprisonment, if the circumstances warrant it.
“Since the program started in 2011, there have only been one, maybe two, enforcement actions involving the LCFS—a very small number vs. the number of transactions that have taken place,” Vergara said. “That should give you a sense of how well the program is going. The same thing is expected for the verification part of it.” READ MORE