Advanced BioFuels USA

by Katie Schroeder (Ethanol Producer Magazine) The California Air Resources Board is working on its latest scoping plan, which could potentially intensify Low Carbon Fuel Standard targets and boost ethanol use in state—especially if E15 gets approved. — California’s Low Carbon Fuel Standard has been a pivotal piece of regulation for the ethanol industry for many years, helping to make the state a top-shelf market for ethanol.

In 2022, the California Air Resources Board was due for a scoping plan, which is done every five years. In doing so, CARB is exploring the option of increasing carbon reduction goals for the LCFS. The proposed goals, as of early August, were an increase from 20% carbon intensity (CI) reduction by 2030 to a 25 or 30% CI reduction in the same timeframe. “The current California Low Carbon Fuel Standard calls for a 20% carbon intensity reduction in transportation fuel by 2030, but today, the fuels being sold in the California marketplace are exceeding the carbon intensity reductions that are established in the law,” says Brian Jennings, CEO of the American Coalition for Ethanol.

Jennings explains what these changes to the LCFS goals could mean for the ethanol industry. “We’re pretty confident that, if they do this, it could be very positive for ethanol,” he says. “It could mean greater demand for ethanol in the nation’s most important fuel market.”

While more aggressive CI targets could lead to more ethanol demand in California, Jennings has some concerns about the “idiosyncrasies” of California’s management of the LCFS in recent years. He explains that CARB has recently favored electric vehicles (EVs) over low-carbon liquid transportation fuels, and recently announced that it will phase in a total ban on the sale of gasoline-powered cars by 2035. However, a University of California Institute of Transportation study funded by the California legislature found that it was impractical to get all internal combustion engines off the road by even 2045, and instead advised that the government replace fossil fuels with biobased fuels alongside EVs.

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The goal of AB 32—to get to 1990 GHG levels by 2020—was met more than three years ahead of schedule. The next tier is to get to 40% below 1990 emissions levels by 2030—set by SB 32—followed by achieving energy carbon neutrality by 2045, set by an executive order by former Gov. Jerry Brown.

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“Whether it’s the advanced clean cars program, the zero EVs program, or all the building electrification programs that we have—efficiency programs—there are literally hundreds of programs, and these all get built into the scoping plan,” Noyes (Graham Noyes, managing attorney at Noyes Law Corp. and executive director of the Low Carbon Fuels Coalition) says. “And so, in regard to biofuels, from the biofuels perspective, what was most significant was CARB identifying again that the LCFS is really the most important program in the fuels sector, and one of the most important programs in the transportation sector.”

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Sustainable Aviation Fuel in California
Alcohol-to-jet has been a major talking point in the ethanol industry, and California could be a key market for sustainable aviation fuel (SAF) in the future. A recent letter from Gov. Gavin Newsom to CARB requested setting a 20% clean fuels target for the aviation sector.

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“Obviously, alcohol-to-jet is a huge new opportunity, and with the blenders tax credit that’s in the Inflation Reduction Act, it will really accelerate SAF commercialization,” Noyes says. “California has a bill going, which we’re working on, that would further accelerate [SAF use].”

E15 Opportunities and EV Challenges
California is one of the largest and most important markets for E85 in the U.S., but E15 isn’t legal in the state. Jennings explains that though E85’s presence is great in terms of its ethanol volume and price at the pump, it has limited consumer reach because most people don’t own flex-fuel vehicles (FFVs). But E15 can be used in over 90% of the light-duty vehicles on the road today, and after years of rigorous testing, Jennings believes its approval in the Golden State is no longer a matter of if, but when.

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E15 has the potential to give obligated parties, such as fuel refineries and importers, a way to meet California’s GHG requirements and give producers more credits per gallon of blended E15 fuel. Noyes explains that if an obligated party blended an ultra-low carbon intensity ethanol enabled with carbon capture and sequestration technology, they may be able to meet their entire LCFS obligation, on a gallon-for-gallon basis, with E15 alone.

“That’s a big slice of the pie … and essentially, that’s going to allow the obligated parties to get a 50% boost in their blending, so I think E15 will very rapidly become the standard fuel in California,” Noyes says.

With California planning to eliminate the use of fossil fuels by 2045, restarting the manufacture of FFVs could be a key step to leveraging the future of E85 in the state. However, Noyes says that efforts to get policy support have struggled to gain traction. He and his team hope to show how E85 can be used to achieve California’s goal of net zero emissions, through blending E85 with renewable naphtha, a byproduct of renewable diesel production that is becoming more widely available.  READ MORE