RFA Urges California to Adopt E15, Drop Unneeded LCFS Feedstock Tracking Requirements --- Hearing Scheduled for November 8, 2024

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August 28, 2024

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(Renewable Fuels Association) The Renewable Fuels Association late yesterday called on California to allow the lower-cost, lower-carbon E15 fuel blend, containing 15 percent ethanol, as part of its efforts to enhance the state’s Low Carbon Fuel Standard.

“E15 is a critical near-term strategy for decarbonizing liquid fuels, which will continue to dominate transportation in California for years, if not decades, to come,” wrote RFA Chief Economist Scott Richman in comments to the California Air Resources Board (CARB). “From a consumer perspective, E15 offers a unique opportunity to lower the cost of gasoline while cutting emissions of greenhouse gases and criteria pollutants.”

Richman cited a recent study indicating that E15 could shave 20 cents off the cost of a gallon of gasoline in California, which has the nation’s highest average fuel prices. This would equate to total statewide annual savings of $2.7 billion.

In the comments, submitted in response to modifications CARB proposed to California’s LCFS on August 12, RFA also pushed back on expanded feedstock tracking requirements as both unnecessary and overly burdensome.

These requirements were initially proposed primarily in response to the potential for rapid expansion of biomass-based diesel (BBD). However, Richman noted, in the changes to the proposed LCFS amendments issued on August 12, CARB “capped the generation of credits for BBD from ‘virgin soybean oil and canola oil’ at 20% of annual BBD volumes on a company-wide basis. Yet, CARB did not remove the sustainability requirements, even though they were intended to accomplish the same objective. Instead, CARB doubled down by making the requirements more onerous.”

RFA detailed the burdensome nature of these requirements, such as the need to maintain boundary coordinates of farms from which feedstocks are sourced, sign attestations about the specific land on which the feedstock was produced, and meet comprehensive chain-of-custody obligations. Instead, Richman wrote, “if California moves ahead with any feedstock certification program, there should be a provision to designate all U.S.-produced ethanol as already in compliance, so long as aggregate cropland area does not expand beyond a 2007 baseline. This would be consistent with the EPA’s approach under the federal Renewable Fuel Standard.” READ MORE

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Clean Fuels: CARB Proposal Will Raise Fuel Prices, Thwart Decarbonization Progress (Clean Fuels Alliance America)
CARB proposal would strengthen near-term LCFS targets, cap the use of soy and canola feedstock (Biodiesel Magazine)
Iowa groups concerned by proposed changes to California LCFS (Iowa Biodiesel Board/Biodiesel Magazine)
CARB’s Biofuel Changes Raise Concern (Transport Topics)
SABR Submits Comments on Proposed LCFS Cap for Soy, Canola Biofuels (Sustainable Advanced Biofuel Refiners (SABR) Coalition/EIN News)
Growth Energy: California LCFS Updates Stack the Deck against American Biofuels (Growth Energy/Biofuels Central)
U.S. firms fight biofuel cap (Reuters/Western Producer)
Four takeaways from Day 2 Petroleum and Gasoline Supply Committee’s Second Hearing (Politico California Climate)

Excerpt from Clean Fuels Alliance America: A proposed cap on soy- and canola-based biodiesel and renewable diesel could raise prices of fuel and goods for California consumers and set back decarbonization efforts by years, said Clean Fuels Alliance America and the California Advanced Biofuels Alliance (CABA) in comments submitted to the California Air Resources Board (CARB).

The recently proposed amendments to the Low Carbon Fuel Standard (LCFS) would put a 20% cap on credits for vegetable-oil-based fuel, without sufficient scientific evidence to support such limitations.

In the comments, Clean Fuels Director of State Regulatory Affairs Cory-Ann Wind stated, “Substantially constraining the lowest cost feedstocks for these petroleum diesel replacements can raise the price of diesel fuel, increasing consumer prices of both the fuel and goods transported by trucking.”

Biodiesel and renewable diesel have displaced nearly 75% of all diesel sold in the state and are responsible for 45% of California’s progress under the LCFS so far. Capping the use of vegetable oils to power trucks and other heavy-duty vehicles will slow down California’s effort to decarbonize them.

Clean Fuels, CABA and other stakeholders are urging CARB to reconsider the proposed caps on vegetable oils in the LCFS in part because it will delay decarbonization and increase the cost to comply with California’s lofty greenhouse gas reduction goals. For every 5 years of delay, 13 times more emissions reductions will be required to have the same climate impact.

“Instead of penalizing fuels, CARB should be focusing on improving the robustness of the models and encouraging sustainable practices through targeted incentives that might provide a more effective balance between environmental protection, food security, and the promotion of renewable energy,” Wind said.

ABOUT CLEAN FUELS ALLIANCE AMERICA

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil, and animal fats, the clean fuels industry is a proven, integral part of America’s clean energy future. Clean Fuels Alliance America is the U.S. trade association representing the entire biodiesel, renewable diesel and sustainable aviation fuel supply chain, including producers, feedstock suppliers and fuel distributors. Clean Fuels receives funding from a broad mix of private companies and associations, including the United Soybean Board and state checkoff organizations. READ MORE

Excerpt from Iowa Biodiesel Board/Biodiesel Magazine: The Iowa Biodiesel Board and Iowa Soybean Association expressed disappointment and concern over the California Air Resources Board’s recently proposed amendments to its groundbreaking Low Carbon Fuel Standard. If adopted, these changes would impose caps on credits for soy- and canola-based biodiesel and renewable diesel.

Grant Kimberley, who serves as the senior director of market development for the Iowa Soybean Association and the executive director of the Iowa Biodiesel Board, issued the following statement:

“The proposed amendments introduced by CARB to significantly limit vegetable oil feedstocks and set onerous requirements for soybean oil are short-sighted and counterproductive to CARB’s goal of decarbonizing the fuel supply. Rather than further embracing biodiesel – a solution that is here today and already contributing greatly to cleaning up the California fuel supply – CARB chooses to inexplicably penalize biodiesel while waiting for future technology to take hold.

"Without scientific justification, these proposed vegetable oil caps and additional sustainability requirements threaten to reverse the progress California has made in emissions reductions and destabilize the economics of renewable fuels nationwide. This is not only a bad precedent for California, but bad for other states following California’s lead, and harmful to Iowa and other states with strong biodiesel production and a thriving farm economy. Unlike petroleum, this proposal would penalize the many producers and farmers who have dedicated their livelihoods to a cleaner, more sustainable energy supply. We urge CARB to reconsider.” READ MORE

Excerpt from Transport Topics: Echoing concerns from farm belt senators about dubious Chinese used cooking oil ingredients in biofuels, American agriculture groups are decrying California’s planned 20% cap on U.S.-made canola- and soy-based biodiesel and renewable diesel that could tip the market toward foreign sources.

The California Air Resources Board on Aug. 13 announced proposed changes to biofuel feedstock requirements in its Low Carbon Fuel Standard. Seeking to cut fuel use by 94% within 21 years, CARB is considering limits for soy- and canola-based biodiesel and renewable diesel credits in favor of technologies such as electric vehicles.

The notice stated, “California expects that overall diesel demand will decline in the state over the coming decades due to the state’s portfolio of ZEV [electric vehicles] and clean fuel policies. The proposed addition also avoids sending a long-term signal for virgin soy or canola oil to serve California demand.”

CARB’s biofuel provision would take effect Jan. 1, 2028, to give feedstock providers time to adjust supply contracts.

“By capping canola- and soy-based biodiesel/renewable diesel, they [California officials] will need to electrify more of the diesel pool or use more imported feedstocks, such as used cooking oil (UCO) from China. There has already been a significant increase in UCO imports from China in the past year for renewable diesel production/demand in California,” Tom Hance, executive director of the U.S. Canola Association, told Transport Topics.

The nonprofit association’s members include canola farmers, processors, food manufacturers, exporters and seed companies. U.S. canola farmers already are investing to increase winter canola production, but CARB’s potential adoption of unfavorable biofuel regulations could derail this sector of the U.S. green fuel industry.

“It is harder to guarantee or be certain of the origin of UCO or other imported feedstocks, compared to biofuels produced in the U.S. For example, there is some speculation/concern that some of the flood of UCO imports in the past year could include palm oil (from Southeast Asia), which is not eligible for the California LCFS due to the environmental profile of its production and the concerns over deforestation,” Hance explained. “There is no deforestation in North America from canola and soybean production, and any ‘indirect’ impacts are already accounted for in the life-cycle analysis and carbon intensity scores developed for canola and soy biofuels.”

In late June, six U.S. senators sent a letter to four federal government leaders voicing alarm about potential harm to American biofuel producers from soaring imports of UCO with questionable biofuel ingredients by “foreign actors” possibly exploiting tax incentives.

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California’s LCFS program requires transportation fuel producers and importers to lower through 2030 the carbon intensity of transportation fuels supplied or sold in California. Under the LCFS, producers and importers of regulated fuels (biomass-based diesel, natural gas, electricity and hydrogen) generate, acquire, transfer, bank, borrow and trade credits, according to the U.S. Department of Energy.

California’s proposed amendments “impose significant restrictions on vegetable oil feedstocks, hindering the ability of clean fuels to effectively decarbonize the heavy-duty transportation sector. Moreover, they introduce stricter standards for these fuels than those applied to others, including petroleum,” said Jeff Earl, state governmental affairs director at Clean Fuels Alliance America.

Grant Kimberley, Iowa Soybean Association market development senior director and Iowa Biodiesel Board executive director, said CARB’s move to impose biofuel caps without scientific justification could destabilize the economics of renewable fuels nationwide.

“This is not only a bad precedent for California, but bad for other states following California’s lead, and harmful to Iowa and other states with strong biodiesel production and a thriving farm economy,” Kimberley said. “Unlike petroleum, this proposal would penalize the many producers and farmers who have dedicated their livelihoods to a cleaner, more sustainable energy supply.”

Hance said the canola industry is “skeptical that the trucking industry and heavy-duty engines can be effectively electrified. Biodiesel and renewable diesel made from canola grown by U.S. farmers can meet the fuel needs of truckers and significantly reduce emissions. It is the best and most economical way to reduce fuel emissions.”

Higher fuel prices are another expected outcome of CARB’s proposed changes, noted an Aug. 27 letter to CARB officials from Natso and SIGMA. Together, the groups said they represent more than 80% of U.S. retail motor fuel sales.

In their letter, the groups stated that CARB’s carbon intensity reduction targets threaten to raise consumer prices for consumers. “Ambitious targets will inevitably increase the associated costs of compliance for fuel producers and distributors, and will ultimately be passed down to and borne by consumers in the form of higher fuel prices,” the groups said. READ MORE

Excerpt from Sustainable Advanced Biofuel Refiners Coalition: The Sustainable Advanced Biofuel Refiners Coalition demonstrates to CARB how the proposal is unjustified and not supported by scientific evidence.

U.S. soybean oil is one of the most abundant and sustainable feedstocks for biodiesel, which helps support tens of thousands of good-paying, green jobs in rural communities throughout our nation.” — Mike Reed, CEO of RBF and SABR vice chairman of the board

JEFFERSON CITY, MISSOURI, USA, August 29, 2024 /EINPresswire.com/ -- The Sustainable Advanced Biofuel Refiners Coalition, a national biodiesel trade association made up of nearly 60 organizational members, submitted comments Aug. 27 to the California Air Resources Board on proposed changes to the state’s Low Carbon Fuel Standard published by CARB Aug. 12.

SABR’s top concern is the proposed 20% companywide cap on soy- and canola-based biomass-based diesel.

“This proposed measure is constructed around misplaced negative biases about modern production agriculture and based on contrived theories of indirect land-use change (ILUC) that have not held up to nearly two decades of actual scientific evidence and data,” SABR stated in its comments. “The LCFS already has embedded layers of punitive measures against crop-based fuels that make the LCFS program more expensive with no added benefit. The proposed cap will make the program even more expensive and incentivize even more imports, most notably from China at the expense of America’s farmers and rural communities.”

Imports of questionable waste-based feedstock such as used cooking oil (UCO) from China have flooded the U.S. market over the past year, driving down soybean oil prices and putting billions of dollars of investments in expanding domestic oilseed processing capacity in jeopardy. If implemented, these proposed changes to the LCFS program would only exacerbate this issue.

Furthermore, theories and assumptions have been modeled for nearly 20 years to forecast future indirect land-use change, SABR noted.

“Those modeled forecasts have been used to assign penalties in real time in the form of carbon scoring to crop-based fuels,” the trade association stated. “We now have the benefit of hindsight to look at two decades of historic data and determine whether the models produced accurate forecasts. They did not.”

The U.S. EPA and CARB have both long held onto misguided, unproven theories and assumptions that biofuels create significant indirect emissions while baseline petroleum creates none. These theories and assumptions did not factor in major technological developments in both the baseline petroleum and biofuel, making both assumptions wrong.

The U.S. continues to grow more crops on fewer acres nearly every year while fracking, for instance, has created significant land-use changes for baseline petroleum that can be seen from Google Earth.

There must be equitable treatment of direct and indirect effects for all energy options being scrutinized, SABR asserted.

“CARB has indicated plans to update all major models for lifecycle emissions calculations except for GTAP-BIO in the upcoming LCFS amendments,” SABR stated. “The soy industry has made vast improvements in sustainability and efficiency over the past two decades, with even greater improvement goals ahead. Yet CARB continues to rely on a 2014 model that uses data from 2004.”

CARB’s current modeling assigns soy biomass-based diesel with an ILUC impact of 29.1g CO2e/MJ whereas updated results from the model used to calculate ILUC scores indicate a value of between 9 and 10 gCO2e/MJ for soybeans.

Even more concerning is the double counting of already flawed indirect emissions at the federal and state levels. A single gallon of soy biodiesel, for instance, can take an ILUC penalty at the federal level and then again in California’s LCFS, as if the gallon were burned twice and the same exact land was converted two times. This double counting is already happening today with sustainable aviation fuel (SAF) under the federal SAF credit (40B) combined with the California LCFS.

This double counting could leave soy biodiesel with an ILUC penalty of 39.1 gCO2e/MJ, nearly four times what the GREET model assigns, despite the fact that there is no determinative scientific evidence biodiesel made from U.S.-grown soy causes any land conversion whatsoever.

“Such a flawed policy is already leading to an alarming spike in questionable UCO imports from China into California,” SABR stated. “These imports are displacing soybean oil, our nation’s most abundant and sustainable agricultural feedstock. This outcome results in bad carbon policy as well as bad agricultural, energy, trade and economic policy.”

At 150 million gallons per year, Houston-based RBF Renewable Biofuels is the largest biodiesel plant in the United States. Mike Reed, CEO of RBF and vice chairman of SABR’s board of directors, said, “Arbitrary and flawed state carbon policy, combined with inconsistent federal policy, is favoring imports over homegrown products by America’s farmers to fuel America’s truckers. U.S. soybean oil is one of the most abundant and sustainable feedstocks for biodiesel, which helps support tens of thousands of good-paying, green jobs in rural communities throughout our nation.”

SABR is urging CARB to reconsider its proposed changes based on 20 years of data-gathering and actual science rather than relying on future forecasts, failed ILUC theories, flawed assumptions and outdated data.

“There has been 20 years to prove the theory that land-use change would be caused by U.S. crop-based fuels, but there is more evidence to the contrary,” SABR stated. “This proposal is unjustified and not supported by scientific evidence and will significantly diminish the benefits of the LCFS policy. The preponderance of the scientific evidence indicates that crop-based biofuel does not result in land-use changes, and that the baseline petroleum does—yet CARB continues to assume the opposite.”

SABR CEO Joe Jobe said, “Soybean plants are nature’s solar panels. They harvest CO2 and sunshine to make liquid solar energy. We need more of this activity, not less—and America’s farmers are delivering. Thanks to broad adoption of precision agriculture and sustainable farming practices, America’s farmers are producing more crops on less acres with less inputs every year.”

To read SABR’s complete comments, click here.

About the SABR Coalition
Sustainable Advanced Biofuel Refiners (SABR) is a coalition of stakeholders that have invested in building out America’s first advanced biofuel—biodiesel. Biodiesel is the most cost-effective means to reduce greenhouse gas emissions from medium- and heavy-duty vehicles, providing numerous economic, environmental and energy security benefits.

SABR represents every link in the biodiesel value chain from feedstock growers to biodiesel producers, distributors, retailers and consumers, as well as infrastructure and products and services suppliers.

For more information, please visit www.sabrcoalition.org. READ MORE

Excerpt from Politico California Climate: Assemblymembers came with tough questions for the Newsom administration at the Petroleum and Gasoline Supply Committee’s second hearing today — including some of the same ones that Newsom has dismissed as oil industry talking points when neighboring governors and Republicans have brought them up.

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Statewide wholesale prices are set on a “spot” market where only a fraction of California gas — about 3 percent of the 800,000 barrels it uses daily — is actually bought and sold. When supplies run short, refiners go to the spot market to get what they need to fulfill contracts. Those buys send market signals that raise prices, which fan out across the state because contracts between refiners and gas stations usually base prices on the spot market.

“I keep coming back to the fact that one refiner’s misfortune, having to go offline, leads to other refiners’ fortunes,” said Assemblymember Jim Wood. “I keep going back to the spot market being the trigger.”

The CEC is investigating those markets, but Newsom’s proposal doesn’t address them.

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Newsom called the special session to discuss his proposal, but lawmakers could still introduce their own. Republicans have already pitched several, including pausing the state’s gas tax and delaying an update to the low-carbon fuel standard, which the California Air Resources Board at one point estimated could raise gas prices by 47 cents. (The agency now says the program doesn’t directly affect gas prices.)

The most popular alternative idea at today’s hearing was allowing California to use gasoline that has a higher percentage of ethanol. The rest of the country allows a blend called E15, but California only allows E10.

Gunda said allowing E15 could add up to 10 percent to California’s fuel supplies. A CARB rep said the agency has been studying the switch since 2019 and that it still has another six to 12 months to go before the next phase. READ MORE

Excerpt from Reuters/Western Producer: CARB will hold a public hearing on its proposed amendments on Nov. 8, aiming to finalize changes by early next year. READ MORE

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Yields used cooking oil (UCO) Transportation Fuels Policy--State Transportation Fuels Policy Sustainability soybeans Renewable Fuel Standard (RFS and RFS2) Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel Regulations-Federal precision farming/agriculture monitoring/measuring reporting verifiction (MRV) life cycle analysis (LCA) LCFS (Low Carbon Fuel Standard) land use policy land use change land use Jetfuel (Sustainable Aviation Fuel (SAF)) ILUC (Indirect/Induced Land Use Change) GREET Greenhouse Gases Regulated Emissions and Energy Use in Transportation Model Green Jobs fuel prices EPA (Environmental Protection Agency) environmental policy E15 price E15 defossilization climate smart/conservation agriculture China Canola/Rapeseed California Air Resources Board (CARB) California Biofuel Crops biodiesel Aviation Fuel/Sustainable Aviation Fuel (SAF) 40B Sustainable Aviation Fuel Tax Credit

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