Biofuel groups, fuel retailers fight California’s proposed restrictions

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The California Air Resources Board’s proposed restrictions on biofuel feedstocks, including a limit on soybean oil usage and new sustainability certification requirements, ultimately will backfire on the state’s consumers, according to industry groups.

CARB proposes a 20% cap on the amount of renewable diesel made from soybean or canola oil that can qualify for the state’s low carbon fuel standard (LCFS). Agricultural feedstocks including corn and soybeans also would have to be certified as meeting sustainability criteria. The board has scheduled a hearing for Nov. 8 on the proposed LCFS amendments.

In comments to CARB echoed by agriculture and biofuel groups, a major refiner, Phillips 66, told the board that “restricting feedstocks will increase the cost and availability of low carbon fuels, which will hurt California residents.” Phillips 66 recently converted a large petroleum refinery at Rodeo, California, to produce renewable diesel.

NATSO and SIGMA, groups that represent truck stops and other fuel retailers, also told the board there was no environmental justification for the 20% limit on vegetable oils, arguing that it would encourage more use of conventional petroleum-based diesel.

“By restricting credit generation for these low-carbon alternatives, CARB risks undermining the growth of the clean diesel market; limiting biodiesel and renewable diesel in favor of technologies that will not be fully scalable for many years threatens both environmental progress and innovation,” the groups say.

Clean Fuels Alliance America, which represents renewable diesel and biodiesel producers, argued that the cap on soybean and canola oil could increase fuel prices in California.

“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,”

The National Oilseed Processors Association also raised the fuel cost concern. “Because vegetable oil is currently one of the most efficient fungible, and cost-effective feedstocks, limiting their use will constrain the supply of renewable diesel in California," the group told CARB.

Groups representing ethanol producers as well as agricultural feedstocks similarly said the cap and sustainability certification requirement are unfounded.

The Renewable Fuels Association, which represents ethanol producers, said that the board proposed the cap for soybean and canola oils after earlier rejecting that concept in favor of sustainability certification.

And then, despite proposing the vegetable cap, “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 said.

RFA and other biofuel groups also argued that sustainability requirements for U.S. ag feedstocks are unnecessary.

RFA said “fuel ethanol production has receded since 2018, and the market for ethanol in U.S. road transportation is mature. Moreover, total U.S. cropland has been declining for decades, and the entire increase in U.S. corn production since 2007 has come from rising yields (and switching acreage from other crops), not expanding crop area.”

RFA also said that CARB’s executive officer would be empowered under the board’s plan to reject new pathways for crop-based fuels solely to ensure the state meets targets for zero-emission vehicles. Such authority, combined with the 20% cap on soybean and canola oil, would set “a dangerous precedent” and violate the “LCFS’ commitment to technology neutrality.”

Growth Energy, another ethanol industry group, told the board that adding the sustainability certification requirement to an existing score for the effect of biofuels on land usage “amounts to an unfair and unnecessary double penalty for corn starch bioethanol.”

The American Coalition for Ethanol said the proposed sustainability certification requirement “amounts to an unfair and unnecessary double penalty for corn starch bioethanol,” given that there already is a carbon-intensity score for land-use impacts.

Clean Fuels Alliance America also raised concerns about changes to CARB’s assessment of indirect land-use change (ILUC), arguing that it raised the ILUC score overall without consideration of the differences between the United States and other regions, such as Brazil.

U.S. soybean production has grown to meet biofuel demand “without compromising the supply of soybean oil for other uses or instigating land use change,” the group said.

Some environmentalists have a different view. The Union of Concerned Scientists said the cap on credits for soybean or canola-derived renewable diesel is a good idea but told CARB that more restrictions are needed to avoid creating shortages in biofuels outside of California.

UCS noted that the United States has already increased the import of animal fats and vegetable oils to feedstocks for biofuels.

“Even with limits on the share of vegetable oil used for bio-based diesel, California will continue to draw vastly more than its share from global lipid markets, importing used cooking oil and animal fat from around the world. The consequence is that California’s LCFS policy can’t be replicated by other states or countries.

“There simply isn’t enough used cooking oil to go around, and capping one set of feedstocks with no limit on others can lead to counterproductive feedstock and fuel shuffling and carbon leakage,” UCS said.

For more news, go to Agri-Pulse.com.

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