Clean Fuels Conference to Spotlight Industry Growth 
The clean fuels industry has witnessed significant growth in recent years, driven by a global push toward reducing carbon emissions and promoting environmental sustainability. This growth is being propelled by increasing investments, technological advancements, policy and a growing awareness of the need for low-carbon alternatives. The exponential growth of renewable diesel and sustainable aviation fuel (SAF) is only just the beginning, and biodiesel, despite being a mature industry now, has the opportunity to unlock substantial new markets in the near future.

A rich lineup of top-notch experts will delve into the issues shaping the clean fuels landscape during the Clean Fuels Conference in Fort Worth, Texas,  Feb. 5-8. Attendees can expect to gain strategic insights into navigating the evolving clean fuels market and capitalize on emerging opportunities.

Clean Fuels Conference featured speakers include:

• PepsiCo VP & Chief Sustainability Officer, David Allen

• American Airlines VP Sustainability, Jill Blickstein

• Optimus Technologies CEO, Colin Huwyler

• BNSF Railway VP Agricultural Products, Angela Caddell

• Darling Ingredients CEO, Randall C. Stuewe  

• United Soybean Board VP Marketing, John Jansen

Distinguished speakers will discuss topics including the exploration of new markets, the impact of federal and state policies on clean fuel adoption, corporate commitments to sustainability, and advancements in greenhouse gas accounting. Attendees include clean fuels producers and marketers, distributors, feedstock providers, fleet managers, original equipment manufacturers (OEMs), environmental, social and governance officers and members of the media.

We have much to discuss as our fuels gain the recognition they deserve as the single, best way to decarbonize the liquid transportation industry with today’s technology. With a focus on collaboration and knowledge-sharing, the Clean Fuels Conference is poised to be a landmark event in the journey to net zero.

Donnell Rehagen  
CEO, Clean Fuels Alliance America 
CleanFuels.org 

Breaking the Barrier: Advancements in Biodiesel Pave the Way for Higher Blend Approval  
In the ever-evolving landscape of renewable energy, biodiesel continues to play a crucial role in the transition toward net-zero carbon emissions. Recent technical updates in the biodiesel industry have introduced specifications aimed at enhancing performance, addressing cold weather challenges and expanding the scope of biodiesel blends. These advancements reinforce the growing acceptance of biodiesel as a promising solution to reach carbon reduction goals from OEMs with higher blend use on the horizon.

A common challenge for all diesel fuels this time of year is their susceptibility to cold weather conditions. To address this concern, the industry is continuously studying cold flow operability to help biodiesel users properly maintain their equipment year-round. With support from Clean Fuels Alliance America, the National Renewable Energy Laboratory recently released its most current set of guidelines for biodiesel in the sixth edition of the Biodiesel Handling and Use Guide. The guide outlines key low-temperature performance metrics such as cloud point, cold filter plugging point and pour point, and highlights solutions to ensure a smooth transition for biodiesel use in the winter months. While seasonal blending and proper storage and handling can help improve startup, the introduction of sophisticated additives can alter the properties of diesel fuel, including biodiesel, to prevent gelling and wax crystallization at low temperatures. Clariant, the leading provider of cold flow additives for middle-distillate fuels, is in the final development stages of an additive that will provide the same operability you can expect from winterized diesel fuel, even for blends up to B50 (50% biodiesel).

In addition to recent developments for cold flow operability, revisions to ASTM D6751, the Standard Specification for Biodiesel Fuel Blendstock (B100) for Middle Distillate Fuels, included lowering the allowable metals limit to support the use of higher blends in today’s after-treatment systems. These adjustments led to optimal results in the sixth annual Assessment of BQ-9000 Biodiesel Properties quality report, proving that today’s biodiesel meets these tighter limits, and indicating that the overall quality of biodiesel well exceeds the minimum ASTM requirements. These changes have also led to discussions regarding blend specifications and limits for blends above 20%, including B100 (or 100% biodiesel) for use as a finished fuel.

OEMs play a crucial role in influencing the widespread adoption of biodiesel blends, including engine manufacturers for railroad and marine applications. These developments have led to several OEMs granting approvals for higher biodiesel blends, signaling a shift toward greater acceptance of renewable fuels. Higher blend approvals not only expand the market for biodiesel, but also underscore the industry's commitment to meeting stringent emissions standards and reducing the environmental impact of conventional diesel fuels. As these advancements continue to shape the biodiesel landscape, the industry is poised for further growth and innovation.

Carbon Policies Amplify Market Growth for Clean Fuels 
With a continual shift toward energy diversity and sustainability, the focus on decarbonizing the transportation sector has intensified. Lawmakers at the state and federal level are repeatedly turning their attention toward renewable fuels made from agricultural feedstocks including soybean oil, animal fats and used cooking oil as a means to meet carbon reduction goals. Renewable fuel programs now cover nearly every corner of the U.S., playing a crucial role in shaping the landscape for low-carbon liquid fuels and amplifying demand in an already growing market for biodiesel, renewable diesel and sustainable aviation fuel (SAF).

Across the Midwest, biodiesel initiatives continue to drive investments in feedstock availability and clean fuel production. Nebraska gave final approval on new incentives for the sale of biodiesel, while earlier-than-expected adoption of Iowa’s B30 incentive is signaling increasing demand for higher blends. Michigan and Indiana have also made significant progress on new programs that will promote the production and use of biodiesel and renewable diesel for emerging markets such as rail and marine.

The West Coast continues to pace the industry for market opportunities for both biodiesel and renewable diesel, which now comprise nearly 60% of California’s diesel pool, according to the latest data released by the California Air and Resources Board. In 2023, biomass-based diesel in Oregon is forecasted to grow by over 112 million gallons, accounting for about 14.5% of the state’s diesel pool and 42% of the Clean Fuel Program credits. First quarter data from the Washington Clean Fuel Standard follows a similar cadence with biomass-based diesel contributing around 22% of the credits generated by the program. Biodiesel and renewable diesel still remain the single largest source of greenhouse gas reductions for all three West Coast programs.

On the East Coast, the second-largest market for biomass-based diesel, over a half-dozen states are implementing or studying low-carbon fuel programs. New York, in particular New York City, continues to lead these efforts to develop new initiatives for decarbonizing some of the largest fleets in the U.S. The Vermont Legislature passed the Affordable Heat Act, similar to California’s Low Carbon Fuel Standard, which will help in the transition from fossil fuel-based heating oil to Bioheat fuel, a readily available, low-carbon heating oil that can be used in existing applications. Several Northeast states have already adopted Bioheat fuel mandates, providing a seamless transition from traditional liquid fuels.

While state policies play a pivotal role in promoting the production and use of biodiesel, renewable diesel and SAF, challenges persist. Harmonizing regulations and incentives at the federal or regional level could streamline the adoption of these alternative fuels, providing a more consistent framework for stakeholders. Additionally, continued investment in research and development is essential to driving down production costs and enhancing fuel efficiency. States can play a crucial role in supporting innovation through grants, research partnerships and infrastructure development.

Our industry is currently in a unique position, possessing the technology, infrastructure and product availability to meet the growing demand to reduce carbon emissions from hard-to-electrify sectors while helping both the public and private sector meet sustainability goals. Clean fuels are the only viable option that can do this quickly and efficiently.   

Clean Fuels Advocates for Consistent Use of GREET Model 
In the Inflation Reduction Act adopted in October 2022, Congress revamped an existing tax incentive to support sustainable aviation fuel (SAF) blending in 2023 and 2024. As of December 2023, unfortunately, the Internal Revenue Service had not finalized guidance on how to calculate the credit.

The value of the credit is tied to the assessed lifecycle carbon score of the fuel, with the policy designed to provide the highest incentives to the lowest carbon fuels. Still at issue is whether U.S. SAF producers and blenders will be able to use the gold standard model for lifecycle assessment.

The law allows the U.S. Treasury and individual taxpayers to use the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation, or a similar model, to calculate carbon reductions. Some U.S. SAF producers have already certified their fuels under the ICAO system. But most U.S. fuel producers and regulators are experienced with Argonne National Laboratory’s Greenhouse gases, Regulated Emissions and Energy use in Technologies (GREET) model and want to see the IRS specifically allow use of that model.

The GREET model is updated regularly and incorporates real-world production data. It is already used in fuel regulations and is specified for use in calculating other tax incentives established in the 2022 IRA. Clean Fuels has worked with Argonne to provide industry data and consistently advocates use of this U.S. federal model as a basis for domestic policy.

The delay in IRS guidance leaves industry with uncertainty on how to calculate 2023 taxes and plan for 2024 production, feedstocks and blending. 

Clean Fuels has also worked with the Fuels America coalition to advocate a consistent definition of SAF across federal policies. The definition would specify use of the GREET model as the lifecycle reduction yardstick. It would also exclude coprocessing of petroleum with fats, oils and greases as existing tax incentives do.

The IRA established a Defense Department program to develop a  SAF pilot production plant. In the FY 2024 National Defense Authorization Act, both the U.S. House and Senate agreed to adopt the definition of SAF outlined in the tax incentive. In November, Rep. Max Miller (R-Ohio) introduced the Farm to Fly Act, which would ensure that USDA energy programs utilized the same SAF definition. And Clean Fuels worked with members of Congress to ensure the FY 2024 Federal Aviation Administration reauthorization adopts the same definition for all federal aviation policies. As of December 2023, the expiring Farm Bill programs were reauthorized for one year, but many FY 2024 spending authorization bills were extended only through the first months of the year.

RFS Volumes Trigger the RIN Cliff 
This past June, the U.S. EPA finalized long-overdue Renewable Fuel Standard renewable volume obligations (RVOs) for 2023, 2024 and 2025. The agency provided minimal growth for biomass-based diesel over the three years, ignoring the ramp up of renewable diesel capacity already evident in the first six months of 2023.

As analysts predicted, renewable identification number (RIN) values fell in September. The U.S. Energy Information Administration noted that the price drop resulted from RVOs “set significantly lower than production trends, meaning it will be easy for the industry to meet the RVOs.”

In the final months of 2023 and first quarter of 2024, however, there are a series of RVO deadlines that could shore up demand for RINs. In conjunction with the final RFS rule for 2020-'22, EPA denied all small refinery exemptions pending from 2020. Due to the delay in addressing the petitions, EPA established an alternative compliance plan and allowed refiners to use 2023 and 2024 RINs. The final deadline for this RVO—estimated to be 870 million RINs—is February 1.

The volumes for 2020-'22 and for 2023-'25 also include 250 million-RIN supplemental obligations that address the outcome of the Americans for Clean Energy lawsuit decided in 2017. EPA anticipates that biomass-based diesel RINs will be used to meet these supplemental RVOs when they are settled in December 2023 and March 2024.

Clean Fuels has intervened in pending litigation over the RFS RVOs for 2020-'22 and for 2023-'25 to ensure that the biodiesel, renewable diesel and sustainable aviation fuel industry’s interests are represented.