California's November election may impact biodiesel

By Luke Geiver | October 25, 2010
November weather in the Golden State may be sunny and comfortable, but the climate surrounding California's controversial Assembly Bill 32 could be severe. The bill's future, which requires the state to reduce greenhouse gas (GHG) levels back to 1990 levels by 2020, will be determined by November voters. To earn a spot on the ballot, roughly 800,000 signatures were gathered on a petition requiring only 435,000, giving the voters a chance to continue or end another highly debated program. The Low Carbon Fuel Standard, many argue, incorrectly figures indirect land use change modeling into estimations that determine the GHG benefits of biofuels such as soy-based biodiesel and corn ethanol.

"Most people I talk to don't think the proposition will pass," said Shelby Neal, director of state governmental affairs for the NBB, but, "there is nothing [stating] a future governor couldn't issue an executive order reinstating [the] LCFS." Even though Californians generally support climate change legislation, early polling on Prop 23 is close because AB 32 is viewed by some as a "job killer," as opponents have termed it. The petition filed in June calls for a freeze on the law until unemployment levels in the state drop below 5.5 percent for a period of one year. Current unemployment levels in California, however, are closer to 10.5 percent, meaning that the likely effect of the proposition is termination of the AB 32 program. While fears of even greater job losses in California threaten the GHG reduction program, as Neal points out, the policy could continue.

"The key for biodiesel will be the results reported by the LCFS Expert Workgroup," Neal said. "Based on this information, CARB (California Air Resource Board) is going to reevaluate all these greenhouse gas scores on or before Jan. 1, 2012." Because the GHG benefits of biofuels such as soy-based biodiesel are significantly less in the CARB study relative to those reported in the more highly regarded U.S. EPA study, the value certain biodiesel feedstocks bring to the policy varies. But, because biodiesel is currently one of only a few fuels that can meet the requirements of the LCFS, the fuel, regardless of feedstock, should have a role in the California's clean energy future.

Depending on revisions by CARB to alter the GHG benefits of certain pathways, obligated parties in the state will have several decisions to make. For 2011, the overall average carbon intensity of the fuel that the refiners are selling has to be one quarter of a percent less than the baseline of petroleum, Neal explains, but how they get there is totally up to them. If soy biodiesel is 12 percent better than petroleum, then one gallon of B100 of soy biodiesel earns approximately 50 gallons of compliance, Neal said, but one gallon of B100 made from a waste oil feedstock would earn an obligated party roughly 325 gallons or so of compliance. The obligated parties "just have to obtain an overall percentage reduction, so if they used waste cooking oil-based biodiesel, which scores better in CARB's current analysis, they can blend fewer gallons and still achieve compliance."

With only a quarter of 1 percent of reduction required for 2011, California's early year requirements may not do much, but Neal said once you get into the third or fourth year, the reductions start getting real and affect the market share. No matter what, Neal said, "What we know is that if CARB makes decisions based on sound science, especially as it relates to the indirect land use change theory, biodiesel will play a major role in the California LCFS."
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